Calculating the break-even time for new rig

Question

I am trying to decide whether I should starting mining XMR by doing a breakeven analysis.

According to this answer, a RX 470 Gigabyte G1 4GB can get 700 H/s. That card is currently $184. If I plug in those numbers (plus the current difficulty, cost of electricity, block reward, XMR/USD exchange rate, etc.) into a profit calculator it claims that I will break even with my video card purchase in approximately 40 days.

That sounds like a very, very short time to recuperate my initial investment! It seems too good to be true. Did I do something wrong? Is mining Monero that profitable?

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In addition, the profit model assumes difficulty, the XMR exchange rate, network hash rate, block reward, and average block time are all constants. Obviously, all may change:

• exchange rate fluctuates based on the market dynamics
• hash rate depends on miner participation
• block time can be changed by the devs
• block reward is based on block size (if I understand correctly)

Changes in the first two are open to wild speculation. What about the block time and block reward? Historically, have these changed frequently?

Answer 1

The current difficulty is about 6.604 billion, not 1.617. And the block reward is about 8.63, not 14. The other parameters seemed reasonable enough.

Those changes will certainly paint a different picture.

Answer 2

This calculator tends to be a lot more accurate than others. I recommend punching your numbers into this instead. Especially if you're not keeping up with block reward/difficulty :-)

Answer 3

Any number that one can come up with will likely be (significantly) wrong, because of the very high fluctuations of the market. You simply can't make a projection on several months when the price can easily vary by 5-10% in one day.

But globally, we can say that there are only short periods of time (few days/weeks) where mining is super profitable, time needed by other (potentially new) miners to switch from other coins or to buy new equipments and then it reaches some kind of equilibrium where you need a low electricity price to be significantly profitable.