Cryptocurrency mining profits have plummeted since last year

We don't really know precisely what impact cryptocurrency mining had on the shortage of graphics cards over the past year, versus memory makers shifting a large chunk of production from DRAM ICs to NAND flash memory chips. What we do know is that cryptocurrency contributed to the bottom line for both AMD and Nvidia. Can we expect another shortage at some point? That remains to be seen, but at least at this very moment, profits from mining are way down from a year ago, or even a few months ago.

In my daily travels on the web, I stumbled upon an article by Nathan Kirsch at Legit Reviews that compares the profits of mining Ethereum today versus a year ago. On June 14, 2017, Kirsch published an article on how to tweak a GeForce GTX 1070 graphics card to mine Ethereum more efficiently. Even then, the mining difficulty of Ethereum had seen a sharp rise, but a properly tuned GeForce GTX 1070 could still rake in a profit of around $6 per day, or $185 and change per month. That was the money left over after paying for electricity.

If things had stayed the same, a GeForce GTX 1070 owner could line their pockets with an extra $2,200 over the course of a full year, running non-stop. Things did change, however, and that same setup today would yield a profit of just $0.56 per day.

That is based on the same 27 MH/s hash rate, with power consumption and costs unchanged as well. An Ethereum miner can still pull in some extra cash, but instead of more than two grand over the course of 12 months, profits are down to a couple hundred bucks. And again, that's if mining 24/7, as opposed to tasking a gaming PC with mining cryptocurrency when not in use.

It's been an interesting year for cryptocurrency, to say the least. Cryptocurrency is as volatile as ever, which means we could see more big swings this year and next. Case in point, prices of Ethereum and Bitcoin spiked yesterday when the US Securities and Exchange Commission (SEC) ruled that Ethereum is not a security.

"Putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions," William Hinman, SEC director of corporate finance, remarked at the Yahoo Finance Market Summit: Crypto.

Hinman's statement drove the price of Ethereum up 10 percent and Bitcoin up 5 percent. As a whole, the cryptocurrency market saw a rebound of sorts, jumping from $271 billion to $291 billion in 24 hours.

Who knows how things will look in another six months or a year from now. At present, however, GPU prices have stabilized for the most part. Here's hoping that continues to be the case when Nvidia launches its next-generation GeForce products this summer.