I have been investing in cryptocurrencies (Bitcoin, Ether) since mid-2015 then in December of 2016 I decided to start a new hobby - crypto mining. I plan to mine Ether until Serenity : Casper and then do a privacy alt coin (Zcash, Monero, DASH, PIVX). I am a true believer that one coin will not rule them all. Considering that Metropolis needs to be rolled out before Serenity : Casper I believe I will be able to mine Ether for the rest of the year and maybe even part of 2018.
If you have been thinking about getting into mining I hope my experience will shed some light on your decision.
Rig
I purchased a top of the line mining rig (7 x AMD RX 480 4GB) from the MiningCave that set me back $2,813 and provides me with a hash rate of approximately 170 MH/s as advertised. I could have saved a couple of hundred buy making it myself but wanted something simple for my first rig. $2,813 remember this number.
Pre Mining Profitability
To get a ball park figure of your profitability head on over to cryptocomapre.com (there are others) and select your crypto, plug in your hash rate, electrical consumption, and charge per kWh.
Actual Numbers
Here is my actual hash rate, note my average is 160 MH/s:
My actual payouts are averaging about 16 Ether/month:
Cost of a Lost Opportunity
Let's say that instead of purchasing the mining rig I just bought $2,813 worth of Ether that at the time (12/16) was trading at $7.71. I could have purchased 365 units, remember this number.
Projections
The following projections assumes an average monthly rate of 16 Mined Ether/month. The payouts can and do adjust up and down depending on the overall hashing power of the network. In general, as the value goes up the payouts go down, but just enough to keep profits marginal.
Projection 1
First, note on the $8 chart in the Mined Ether column that by June of 2018 I will only have mined 304 units but in December of 2016 I could have purchase 365. So right of the bat I can say I started mining when the price was too low. Second, if you look at the Cumulative Profit column note that by June of 2018 I will only have made $2,161 short of my $2,813 mining rig investment. Things look bleak.
Projection 2
However, these are the early days of Ethereum and in the crypto space 100%, 200% and even 300% increases/decreases are not unusual, actually they should be expected. So lets do another projection at $40 the value of Ether in March of 2017. Now things do not look that bad. I will never make 365 units by June but I will pay off the rig by April of 2017.
Projection 3
Here I am going to be conservative and say that Ether will achieve $80 by June of 2018. In this case the rig will be paid off by January a month and a half after I started mining, of course in this scenario I wont know this until June 2018.
Projection 4
No chart here just a prediction that one day maybe in 8 years each Ether will be worth $1,000. You do the math.
Conclusion
Crypto mining requires belief. A belief that cryptocurrency in general is the future of money, a belief that the cryptocurrency you support is offering something unique, a belief that others will see the benefits, and a belief that your currency's value will have double or triple digit returns. It also does not hurt to have free electricity, live in a cold climate, pick a good entry point, and have an understanding wife.