Mining secures proof-of-work networks like Bitcoin by expending electricity on specialized hardware; staking secures proof-of-stake networks like Ethereum by locking coins as collateral to validate blocks. Mining returns hinge on hashprice, electricity rate, and machine efficiency. Staking returns hinge on protocol reward rate (APR), fees, and operational risks such as slashing and exit queues. In 2025, typical ETH staking yields around three to five percent depending on setup, while BTC mining profitability varies widely with power costs and post-halving rewards.
What mining and staking actually do
Proof-of-Work mining in one paragraph
Miners package transactions into blocks and compete to solve a cryptographic puzzle; the winner appends the block and earns the block reward plus fees. This “work” enforces ordering and security without a central party, but it consumes significant energy by design.
Proof-of-Stake staking in one paragraph
Validators lock coins to participate in consensus; the protocol pseudo-randomly selects them to propose and attest to blocks. On Ethereum, validators must deposit 32 ETH to run a validator directly, and withdrawals have been enabled since the Shanghai/Capella upgrade on April 12, 2023.
Energy profile difference
After Ethereum’s Merge to proof-of-stake, the network’s energy use dropped by an estimated 99.95%, underscoring how PoS reduces energy demand relative to PoW. Independent trackers like Cambridge’s CBECI continue to quantify Bitcoin’s electricity use with a transparent methodology.
How rewards are created
Mining rewards
Miners earn the protocol’s block subsidy plus transaction fees, converted into a single metric called hashprice, the expected value per TH/s per day. Bitcoin’s April 20, 2024 halving cut the block reward to 3.125 BTC, which structurally lowered revenue per unit of hash unless price and fees compensate.
Staking rewards
Stakers earn consensus rewards and a share of execution-layer fees; on Ethereum, enabling MEV-Boost can lift realized APY compared with non-MEV setups. Public dashboards and research in 2025 suggest baseline ETH APR around three percent, with operator choice and MEV strategies nudging it higher. Liquid staking tokens (e.g., stETH) give liquidity but add smart-contract and liquidity risks.
Profitability math you can actually use
Mining: quick framework and example inputs
Daily mining profit ≈ (hashprice × hashrate) − electricity cost − pool/hosting fees − capex amortization. Electricity cost = power(kW) × 24 × $/kWh. For reference, a Bitmain Antminer S21 is rated around 200 TH/s at ~3.5 kW (≈17.5 J/TH). Profitability is extremely sensitive to your electricity rate and the current hashprice; use a live calculator and the Hashprice Index to model scenarios.
Practical tip: a back-of-the-envelope breakeven power price can be approximated as
$/kWh breakeven ≈ (hashprice × hashrate) ÷ (24 × power kW).
This helps you compare sites or hosting quotes before buying hardware.
Staking: quick framework and example inputs
Annual staking return ≈ stake × net APR × (1 − provider fee) − any penalties. Reference points in 2025: ETH baseline APR ~3% (higher with MEV), SOL often in the mid-single digits, and ATOM in the low-to-mid teens through some providers. Always verify current network APRs and provider fees before committing capital.
Cost, risk, and operational differences
Capex and opex
Mining demands up-front hardware plus ongoing power and cooling. Modern ASICs span efficiencies from ~17.5 J/TH for air-cooled S21s to more efficient pro/hydro models, and miners track these against hashprice to decide upgrades. Staking’s hardware costs are minimal if you delegate or use a staking-as-a-service provider, but direct solo staking on Ethereum still requires running clients reliably.
Energy and externalities
Estimates for Bitcoin’s electricity use place it at a fraction of global demand but still material; in 2023 the U.S. Energy Information Administration summarized a 67–240 TWh range (point estimate ~120 TWh). Staking eliminates mining’s electricity exposure but replaces it with protocol-level risks.
Protocol and operational risk
Staking introduces slashing risk if a validator misbehaves or is misconfigured. On Ethereum, slashing includes an initial penalty and correlation penalties that scale if many validators fail together; it also triggers a forced exit and a cooling-off period before funds are fully withdrawable. Understanding exit/activation queues and churn limits matters for timing withdrawals.
Liquid staking adds smart-contract and liquidity considerations; bridged LSTs can decouple from par value on illiquid or compromised bridges.
Regulatory context
Staking as a service can be regulated differently from native staking. A notable example was the U.S. SEC’s 2023 settlement with Kraken that ended its U.S. staking program, highlighting jurisdiction-specific treatment of custody and disclosures. This doesn’t ban self-staking, but it affects exchange-run programs.
Which is more profitable in 2025?
When mining can win
Mining tends to outperform staking only when three conditions line up: very low, stable electricity (or advantaged power deals), access to efficient hardware and favorable hosting, and a supportive hashprice environment after the 2024 halving cut rewards to 3.125 BTC. Otherwise, rising network hashrate and competition compress margins.
When staking can win
If you hold PoS assets already, staking can deliver steadier, operationally lighter returns. Baseline ETH APR around three percent is common for non-MEV setups and can be higher with MEV-Boost; SOL frequently sits mid-single digits; some Cosmos chains show double-digit rates, with bonding periods and slashing risks to weigh.
A balanced way to decide
Compare mining’s modeled net cash yield (after power and fees) to staking’s net APR on the same notional dollar value of coins, then stress-test both for price moves. Use live tools: hashrate calculators and the Hashprice Index for mining, and reputable APR dashboards for staking.
Step-by-step comparison checklist
If you’re evaluating mining
Confirm machine efficiency and power draw from manufacturer specs; model at least three power-price scenarios and a range of hashprices using a calculator; include pool/hosting fees and expected downtime; verify local noise and grid constraints.
If you’re evaluating staking
Decide between solo, SaaS, exchange, or liquid staking. Verify 32 ETH is required for a solo Ethereum validator, know that withdrawals are live since April 12, 2023, and read the provider’s slashing coverage and exit-queue policies. Consider MEV configuration, commission fees, lockups, and the extra risks of LSTs or restaking products.
FAQs
Is mining still viable after the 2024 halving?
It depends on your all-in electricity rate, hardware efficiency, and the prevailing hashprice. The halving on April 20, 2024 reduced rewards to 3.125 BTC per block, so margins are thinner unless price and fees rise. Model your site with live hashprice data.
What APR can I reasonably expect from Ethereum staking?
Recent research and calculators place baseline ETH APR around three percent, with MEV-Boost configurations higher. Exact results vary with validator performance, fee capture, and network conditions.
What is slashing and should I worry about it?
Slashing is a penalty for violating consensus rules. On Ethereum it burns part of the stake, forces an exit, and can escalate if many validators are slashed together. Good operations and diversification reduce risk.
Does proof-of-stake really save energy?
Ethereum’s switch to PoS cut its estimated energy use by ~99.95%, while Bitcoin’s energy use is tracked by CBECI with a documented methodology.
