Profitability ~ Vega MiningGuides.com

I have been asked several times about the profitability of mining. It's a good question, particularly if you are considering investment in a pricey miner. I can't know the specifics of your situation but I do know my specifics so this section lays out my thought process and how I resolved that a mining investment was worth pursuing... FOR ME. YMMV

Before we get into the topics, let me say this... while JJs_HashMonitor has made Vega mining way way less hands on, you should not view mining as a fire-and-forget investment. Buying coins in an exchange is a much better way to approximate that. You should view mining as a hands on hobby where you get to enjoy tweaking systems and exploring different alt coin options. I do view it as a profitable hobby, but it is a hobby.

I will address two profitability questions that people wrestle with. Hopefully you find my perspective helpful as you form yours. (FYI - there are no affiliate links in this particular post because I want you to know I am being completely objective as I offer my perspective... I'm always objective in my link posting but I state this for emphasis)

Is Mining Profitable and Worth an Investment in Hardware?
I have decided to do it... should I wait for a better deal? (not yet written)

Is Mining Profitable and Worth an Investment in Hardware?

(In case you jumped right to this point in the page let me repeat... I can't know the specifics of your situation so this section is not advice. But, I do know the specifics of my situation so this section lays out my thought process and how I resolved that a mining investment was worth pursuing... YMMV)

Let me start by saying there are two profitability breakpoints you need to consider when calculating your ROI timeframe:

When will I have more value in mined coin/asset then I spent on equipment?
When will I have the same number of coins I could have purchased had I spent my initial hardware investment on a direct coin purchase?

The Breakpoint #1 has to do with your financial risk and is greatly aided by an increase coin value. In my case, XMR went up way faster then I anticipated and I was "profitable" long before I expected. Reaching Breakpoint #1 greatly reduces the sense of financial risk. From that point forward you are, "playing with house money".

The Breakpoint #2 has more to do with optimization. It changes the meaning of "profitable" from, "I have more value then I spent" to, "I have more value then an alternative". Breakpoint 2 is easier to calculate because measuring value in coins reduces the impact of falling/rising coin prices. As with Breakpoint #1, don't forget that your mining equipment still has value which should be factored in. When you have the same number of coins you are actually ahead by the value of your mining rig and knowledge/experienced gained. Likewise, you are no doubt behind in "personal time spent". You need to decide for yourself how important it is for you.

It should also be noted that there are some coins you can mine before they are even available on exchanges, in that manor, mining gets the advantage when the math is otherwise a draw.

Mining Calculators

MyCryptoBuddy

The Bad News:

The network hash rate is increasing because of people like you and me jumping on the Vega bandwagon. This means the amount of coin earned by your miner's fixed hash rate will decrease as its proportion of the total network hash rate decreases. The Reward value also decreases over time which compounds the impact on coin accumulation.
The CryptoBuddy calculator provides a plot which you will notice is not a straight line. The curve slopes because it includes this expected coin yield decrease via a number called, "Diff Change" (Difficulty Change).
Diff Change is an estimate because no one really knows for sure how the network hash rate will change. The calculator pulls in a "Diff Change" value based on recent network trends. You can see the raw data for yourself on the charts of ChainRadar's Monero page (Change the zoom level of the "difficulty", "Network Hashrate" and "Reward" chart to "1y" in order to see trends).
I think CryptoBuddy is the best tool to estimate how many coins you will mine (use for Breakpoint #2)

The Good News:

An increase in network hashrate would be a reflection of the communities increasing confidence in the coin you have chosen to mine. The logic is a follows:

If Difficultly is increasing then the Network Hashrate is increasing.
If the Network Hashrate is increasing that means more people think it's worth the investment of their resources.
If more people think its worth their investment then that likely means the value of the coin is increasing.

While CryptoBuddy does a good job estimating the number of coins you will have, it does not do such a good job estimating any change in value of those coins you will have. CryptoBuddy assumes the Monero value will remain fixed at its current price over the length of your mining adventure.
If you plan to hold your coins then you can, and this is a risky step, enter the Monero price you think is safe to assume if the network difficulty increases as predicted by "Diff Change" (Note: No one knows the future so there is risk in this step).
Summary: It is often the case that an increase in coin value accompanies an increase in network hashrate. Think about it... you are looking into Vega mining right now because of Monero's value... if the value crashed, your interest in mining would also crash. This is a form of built in "insurance" against increased difficulty.

If Monero's price were to swoon then you can expect miners to move to other coins so the network hashrate would swoon and you would get more less valuable coins...
If Monero's price were to crash then you as a holder are out of luck. Investing is a risk and we blew it. But.....

More Good News:

Your Vegas have some value which mitigate your risk. Your Return On Investment (ROI) calculations do not need to fully pay off the Vega's as they will retain value over time. Your end asset after any given time period is your mined Monero balance * price + Vega remaining value. If Vega's are truly the game changer we think they are... your risk of difficulty increase is mitigated by the fact that game changing Vega's should also be expected to hold some value.

Good luck and remember, YMMV - CircusDad

*Note: earlier in the first paragraph I said "you get coins in proportion to your percentage of the total Network hash-rate" This is a generalization. You actually get coins as a function of the coins "Difficulty" number. However, in the case of most coins, like Monero, the difficulty adjusts every few minutes to account for changes in network hash rate. The statement is therefore true... but indirectly true.