If you want to earn from cryptocurrency without daily trading or constantly watching price charts, there are two well-established options: mining and staking. Both can generate passive income, but they work in fundamentally different ways and require very different levels of investment. Let’s break down how mining and staking actually work, which one is more profitable right now, and which option may be a better fit for your situation.
Mining vs Staking: The Basics
Before comparing returns, it’s important to understand how these two methods function. Mining and staking are built on different principles and support different types of blockchains.
How Mining Works
Mining is the process of securing a blockchain using computational power. Specialized hardware solves complex mathematical problems, and when a new block is successfully added to the network, the miner receives a reward.
Mining is used in blockchains that rely on the Proof-of-Work (PoW) consensus mechanism — «proof of work». The most well-known example is Bitcoin. Other PoW-based networks include Litecoin, Dogecoin, Kaspa, and several others.
The days of mining on a home computer are long gone. Today, Bitcoin mining requires ASIC miners — specialized devices designed for a specific algorithm. These machines cost thousands of dollars, consume large amounts of electricity, and require proper placement due to heat and noise.
How Staking Works
Staking involves locking up cryptocurrency to help secure and operate a blockchain network. You «freeze» your coins, they participate in transaction validation, and in return, you earn staking rewards.
Staking is used in networks based on the Proof-of-Stake (PoS) mechanism — «proof of stake». This model is used by Ethereum (after its transition in 2022), as well as Solana, Cardano, Polkadot, Tron, and most modern blockchains.
No special hardware is required — you only need the coins themselves. You can stake cryptocurrency through an exchange, dedicated staking platforms, or directly from a wallet. Rewards are paid in the same asset that you stake.
Entry Barrier: How Much Money Do You Need?
This is often the first — and decisive — factor. The difference in upfront investment between mining and staking is significant.
Mining: Entry Costs
Bitcoin mining today is a capital-intensive business with a high barrier to entry. After the 2024 halving, the block reward dropped to 3.125 BTC, making older hardware largely unprofitable. To generate returns, miners now need modern, energy-efficient ASIC machines.
Current prices for popular models:
- Bitmain Antminer S21 Pro (234 TH/s) — $3 000;
- Bitmain Antminer S21+ (235 TH/s) — $2 400;
- Bitmain Antminer T21 (190 TH/s) — $1 300;
- Antminer S21 Hydro (340 TH/s, liquid cooling) — from $5 000.
But the ASIC itself is only the starting point. Additional costs typically include:
- Electrical infrastructure capable of handling 3.5+ kW per unit;
- Cooling systems or a dedicated space (ASICs produce around 75 dB of noise, similar to a vacuum cleaner);
- Voltage stabilizers or an uninterruptible power supply (UPS);
- Optional fees for mining hosting services.
A realistic minimum budget to get started is $1,500–2,000 for used or entry-level hardware. For a comfortable setup with a new, efficient ASIC, expect $3,000–4,000 upfront.
Staking: Entry Costs
Staking is far more accessible. On centralized exchanges such as Binance, Bybit, or OKX, you can start with just a few dollars. Buying $50 worth of ETH or SOL is enough to begin earning staking rewards.
Common entry options:
- Exchange staking — from $1–10, no technical setup required;
- Liquid staking (Lido, Rocket Pool) — from $10–50, receive a liquid token (stETH, rETH) usable in DeFi;
- Wallet staking (Trust Wallet, Ledger) — typically $10–50 equivalent, depending on the network;
- Running an Ethereum validator — 32 ETH (≈ $110,000).
For most users, the practical entry threshold for staking is $50–500, which is many times lower than mining.
💡 We covered staking methods in detail in our guide: «How to Earn Passive Income with Cryptocurrency».
Current Returns
Now to the key question — how much can you actually earn?
Mining Returns
Mining profitability depends on four main factors: hardware performance, network difficulty, the price of Bitcoin, and electricity costs.
Let’s look at a concrete example: Antminer S21 Pro (234 TH/s, 3,510 W power draw):
At a BTC price of ~$100,000 and current network difficulty:
- Revenue: ~$13–16 per day;
- Electricity cost (at ~$0.06/kWh): ~$5 per day;
- Net profit: ~$8–11 per day, or $240–330 per month.
Electricity prices vary significantly across major regions:
- United States: ~$0.08–0.12 per kWh (cheaper in certain states, higher in urban areas);
- Europe: ~$0.15–0.30 per kWh on average, often making home mining unprofitable;
- Mining-friendly regions / hosting facilities: ~$0.05–0.07 per kWh.
At an electricity rate of ~$0.07/kWh (typical for mining hosting services):
- Electricity cost: ~$6 per day;
- Net profit: ~$7–10 per day, or $210–300 per month.
Under these conditions, the payback period for an Antminer S21 Pro is approximately 12–18 months. However, network difficulty tends to increase over time (around 25% growth in 2025), which gradually reduces profitability.
Staking Returns
Staking returns are usually expressed as APY (annual percentage yield) and vary by asset and platform.
Ethereum (ETH):
- Native staking / Lido: 3–4% APY;
- Exchanges: 2–4% on flexible products, up to 6–8% on fixed terms with bonuses.
Solana (SOL):
- Native staking: 6–8% APY;
- Exchanges: 5–10%.
Other popular assets:
- Cardano (ADA): 3–5%;
- Polkadot (DOT): 10–14%;
- Cosmos (ATOM): 15–20%;
- Tron (TRX): 4–6%, up to 20% with promotional bonuses.
Example calculations.
If you stake $3,000 in ETH at 4% APY:
- Annual return: $120;
- Monthly average: $10.
If you stake the same $3,000 in SOL at 7% APY:
- Annual return: $210;
- Monthly average: $17.50.
Now let’s compare this directly.
Investing $3,000 in an ASIC miner can generate $200–300 per month under favorable conditions. Investing the same $3,000 in staking typically generates $10–20 per month.
That’s a 10–20× difference in monthly cash flow in favor of mining.
However, there’s an important nuance. An ASIC miner usually becomes outdated and depreciates within 2–3 years, while staked coins remain in your portfolio and may appreciate in value over time.
Comparison Table
| Parameter | Mining (ASIC) | Staking |
|---|---|---|
| Minimum entry | $1,500–3,000 | $10–100 |
| Monthly income | $200–400 (under favorable conditions) | 0.3–1.5% of capital |
| Annual return | 40–80%* | 3–20% APY |
| Payback period | 12–24 months | Not applicable** |
| Setup complexity | High | Low |
| Ongoing costs | Electricity, maintenance | None or minimal |
* Before accounting for hardware depreciation
** Capital is not spent but remains invested in crypto assets
Costs and Hidden Pitfalls
Gross revenue is one thing — net profit is another. Let’s look at the expenses that eat into returns in each case.
Mining Costs
Electricity is the main expense. One ASIC consumes 3,000–5,000 W running 24/7. At an electricity rate of $0.07/kWh, one Antminer S21 “burns” about ~$160 per month on electricity alone.
Cooling and ventilation. An ASIC generates a lot of heat. In summer, without air conditioning or proper ventilation, the hardware will overheat and shut down. Additional costs: $20–100 per month depending on climate and the solution.
Maintenance and repairs. Fans wear out, boards fail. Budget 5–10% of the hardware cost per year for repairs.
Depreciation. An ASIC miner doesn’t last forever. After 2–3 years it becomes outdated (more efficient models appear), and after 3–5 years it may fail physically. The cost of the hardware should be “spread out” over its working lifespan.
Pool fees. If you mine in a pool (otherwise the chance of finding a block is close to zero), the pool charges a fee — usually 1–2.5% of what you mine.
Staking costs
Platform fees. Exchanges and liquid staking services take a share of rewards. Lido keeps 10% of profits, exchanges charge from 0% to 25% depending on the product.
Network fees. When entering and exiting staking, you pay network fees. On Ethereum this can be $1–10 per transaction, while on Solana it’s fractions of a cent.
Loss of liquidity. Not exactly a «cost», but an important point. While coins are staked, you can’t sell them. In some networks, the unstaking period ranges from a few hours to 21 days (Cosmos).
Overall, ongoing costs for staking are minimal or nonexistent — that’s its main advantage.
Risks: What You Should Be Aware Of
Both methods come with risks, but the nature of those risks is very different.
Mining risks
Price drops. If Bitcoin falls by 50%, your ASIC will generate half as much revenue in dollar terms, while electricity costs remain the same. In a strong downturn, mining can quickly become unprofitable.
Rising network difficulty. The more miners join the network, the smaller each participant’s share becomes. Bitcoin’s difficulty increases almost constantly, reducing your portion of the rewards.
Hardware obsolescence. In 2–3 years, today’s top-tier ASIC will become mid-range, and in 4–5 years it may turn into scrap. This isn’t a stock you can hold forever.
Hardware failures. ASICs operate under constant load, 24/7. Fans, power supplies, and hash boards fail over time. Repairs cost both money and downtime.
Regulatory risks. In the United States and Europe, attitudes toward mining vary by country and region. Rules can change — including restrictions, reporting requirements, or higher electricity tariffs for high consumption.
Electricity issues. Power outages, voltage fluctuations, or rising energy prices directly impact profitability.
Staking risks
Asset volatility. This is the main risk. You might earn 5% APY in SOL, but if SOL drops by 40%, the value of your holdings in dollars falls sharply. Staking does not protect you from price declines.
Slashing. In some networks, validators can be «penalized» for incorrect operation, with a portion of staked coins deducted. When staking via an exchange or large pool, this risk doesn’t affect you directly, but issues can still arise at the service level.
Platform risk. When you stake on an exchange, you trust it with your funds. Exchanges get hacked and go bankrupt (remember FTX). With smart contract–based staking, there is also the risk of vulnerabilities in the code.
Lock-up periods. While assets are staked, you can’t sell them. If the market drops sharply, you may not be able to exit in time. For some assets, the unstaking period can be up to 21 days.
Changing conditions. Staking APY is variable. Today it may be 7%, and six months later it could drop to 3%.
Who Each Method Is Best For
Different people have different circumstances. Here’s who each option tends to suit best.
Mining is a good fit if:
- you have access to cheap electricity (around $0.05–0.06 per kWh);
- you have a suitable space for noisy equipment (garage, warehouse, private house);
- you’re ready to invest at least $2,000–3,000 upfront;
- you’re comfortable with, or willing to learn, the technical side;
- you want to maximize income in absolute dollar terms;
- you treat mining as a business rather than a hobby.
Staking is a good fit if:
- you want to start with a small amount ($50–500);
- you don’t want to deal with hardware or technical complexity;
- you already hold cryptocurrency and want it to «work» for you;
- liquidity matters — you want the option to exit relatively quickly;
- you don’t have access to cheap electricity or a place to run ASICs;
- you prefer passive income with minimal ongoing involvement.
Frequently Asked Questions
Can you mine Bitcoin on a regular computer or a GPU?
No, this has been unprofitable for a long time. Bitcoin’s network difficulty is so high that a home computer would not find a block in a lifetime. Mining BTC requires specialized ASIC devices. Some other coins (such as Ravencoin or Ergo) can still be mined with GPUs, but profitability there is also relatively low.
Can a beginner with $500 start mining or staking?
For a beginner with $500, staking is the clear choice. This amount is not enough to buy an efficient ASIC miner — only outdated hardware with questionable profitability. However, $500 is more than sufficient to stake assets like ETH or SOL and start earning 4–8% APY with minimal technical complexity.
Can you lose coins when staking?
The coins themselves don’t disappear, but risks do exist. When staking on an exchange, there is the risk of a hack or bankruptcy. With smart contract–based staking, there is a risk of vulnerabilities in the code. Some networks also have slashing — a «penalty» for validator misbehavior — but when delegating through large, reputable services, this risk is usually minimal.
How much electricity does one ASIC miner consume?
Modern, efficient ASICs consume around 3,000–3,500 watts when running 24/7. That’s roughly equivalent to 30–35 100-watt light bulbs or 1.5–2 electric kettles running constantly. Over a month, one ASIC consumes about 2,500 kWh. For comparison, an average apartment uses around 150–300 kWh per month.
When does an ASIC miner break even?
Under current conditions (December 2025, BTC at ~$100,000, electricity at $0.06–0.07 per kWh), the payback period for top-tier models like the Antminer S21 Pro is roughly 12–18 months. This assumes stable prices and network difficulty. If Bitcoin falls or difficulty rises sharply, the payback period will be longer.
Do you need to pay taxes on mining and staking income?
It depends on your country. In the United States and Europe, income from mining and crypto-related activities is generally taxable and must be reported. Rules vary by jurisdiction, so it’s best to consult a local tax professional.
Can you combine mining and staking?
Yes, many people do. For example, you might sell part of the mined Bitcoin to cover electricity costs and convert the rest into ETH or SOL for staking. This creates a more diversified income stream from different sources.
What happens to mining after the next Bitcoin halving?
The next halving is expected in 2028, when the block reward will drop from 3.125 to 1.5625 BTC. Historically, Bitcoin’s price has risen after halvings, offsetting the reduced reward. However, there are no guarantees — miners with high electricity costs may become unprofitable.
What to Choose: Final Take
There is no single right answer — everything depends on your circumstances and goals.
In terms of pure returns, mining comes out ahead. Under favorable conditions, it can generate 40–80% annually on invested capital, while staking typically delivers 3–20% APY. However, mining requires expensive hardware, access to cheap electricity, and ongoing involvement.
When it comes to simplicity and accessibility, staking clearly wins. You can get started in minutes with almost any amount of capital, without technical knowledge or a dedicated space.
In terms of risk, both approaches are comparable, but the risks are different. With mining, you risk your hardware and depend heavily on external factors such as electricity costs and network difficulty. With staking, the primary risk is the volatility of the underlying asset.
A practical approach is this: if you have $3,000–5,000 and suitable conditions for mining (cheap electricity and a proper location), it can be worth trying. If those conditions aren’t met, or your capital is smaller, staking is usually the more reasonable option.
Many people combine both methods. Part of the portfolio is allocated to staking for more stable passive income, while another part is invested in mining for more aggressive returns. This kind of diversification helps reduce overall risk and creates multiple income streams.
