Back in the very early days of bitcoin, mining was only done on CPUs. This allowed almost anyone to join in and mine bitcoin at a relatively good pace all alone. However, as time went on, new ways to mine began emerging, firstly GPU mining then later specialised ASIC miners that provided much higher hashrate than CPUs and GPUs, this meant that after 2013-2014 only ASIC mining became viable on the bitcoin network. Other networks had another idea in mind though and began creating mining algorithms that worked only with CPUs or GPUs to make mining much more accessible to anyone with a computer.
Mining profitability
As time went on and cryptocurrencies increased in price, so did the interest in mining them and the massive increase in competition lead to skyrocketing hashrates, essentially lowering mining profitability to a very low amount. In the 2017 boom, the prices went way higher than anyone anticipated and that was a golden moment for miners where they could earn hundreds of dollars a day with ease. However, as time went on afterwards profitability went very far down, until 2020 that is.
So, how viable is mining in 2020 you ask? And the answer is it is fully possible to construct a profitable mining operation if you have relatively low electricity costs or can find extremely cheap parts from local deals. Both certain ASIC and GPU miners remain profitable. From the ASIC side, Zcash is currently the most profitable coin with an ROI of 4-8 months depending on electricity costs. On the GPU side Ethereum is the current king of mining, however there are many coins such as Ravencoin and Grin that also give it a run for its money. On average GPU rigs have a typical ROI of 8-14 months depending on electricity costs and hardware prices.
GPU mining
Since GPUs can’t run standalone you will require to build a rig around them with other components. Luckily these components are often much cheaper compared to the GPUs. AMD GPUs tend to have better returns due to their better ETH hashrates and often lower prices than Nvidia ones. As such the two most profitable GPUs right now are the RX 580 and RX 5700. Assuming 8 GPUs a rig it would cost roughly 2100 USD for an RX 580 rig and 4000 USD for an RX 5700 rig. The RX 580 rig would roughly break even in 9 months and he RX 5700 rig would break even in roughly 10 months assuming stable difficulty, ETH prices and an electricity cost of $0.1/kWh. This means that these mining rigs actually have a good ROI as of now and will continue to do so until either more miners join, the price of ETH drops greatly or until ETH 2.0 finally fully launches in 2 years or so, at that point you will have to mine another coin likely with less profit, however you would have already broke even long before.
However, you need to remember you will need space and electricity for these rigs, as well as some level of technical know-how to assemble them and install the necessary software.
ASIC mining
Unlike GPU rigs, ASICs already come ready to plug in, set to a pool and just mine. This makes their setup and down time much less compared to GPU rigs. However, it is important to note that ASICs are often extremely loud and will need to be isolated in a room unless you want to go deaf and they also consume mass amounts of electricity (typically 1200W+). Currently the most profitable ASIC miners are the Bitmain Z15 and the Innosilicon A10 Pro (which mine Zcash and Ethereum respectively). The Z15 has a 5-month ROI roughly while the A10 has a 7-month ROI. This also assumes similar conditions to the GPU rigs profitability. This means if you are able to deal with the excessively loud fan noise and the excessive heat these machines bring, they can be a better deal than GPU mining especially due to lower average down time.
Viability
Just like I showed, this means that both GPU and ASIC mining are still entirely viable and relevant in 2020 and can be a good investment for someone looking to get into cryptocurrency from the outside without directly buying crypto. However, the necessary capital can be quite high, and the operation assumes many things that can change quickly and lower your returns significantly, so it remains a very risky investment.
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