The truth about mining Cryptocurrency as a hobby
Recently there has been a lot of talk, again, about the viability of mining cryptocurrency at home.
There are two main reasons for this;
1 — New generation of video cards is exponentially more powerful, meaning the rate at which mining can happen has once again gone up.
2 — Coins that are easier to mine than Bitcoin have been surging in value, most notably Ethereum.
Now, I can wax poetic about how much a crypto guru I am…except I’m not. I’m just a near middle-aged approaching man who happened to believe in crypto early. I was among the first to mine Bitcoin when it was released, and like many others I made the mistake of losing my initial coins.
Since the mainstream surge of crypto popularity, in 2017, I’ve invested in crypto somewhat heavily and it has fortunately paid dividends…so to speak. I don’t have any sort of trading strategy that would make it so you could buy a lambo anytime soon (or likely even ever). I do however like to think I have a good understanding of the technology and the real reasons it is viable, not only as a form of currency but as a technological asset of security.
That said, I’m not a financial advisor or a professional and you should probably just steer clear of any advice I give you. (lol to wsb)
So let’s assume that we all know you can mine cryptocurrency, and it’s not all that hard to do so. You download some sketchy-ish code to your computer, run a bunch of commands that likely will give away your first born child, and voila… you have your computer running harder than it has ever run trying to bring in that sweet cheddah.
Seems easy, and to be honest, it really is. Too easy even. You can actually download an installer to your computer called Honeyminer (would not recommend) and basically throw an email and password at the program and you are off and running. Problem with programs like that is simple. They do everything for you, for a fee. That fee will likely wipe every bit of profit you could possibly make right off the map. That’s also completely overlooking the fact that you have no granular control over how hard the program will tax your machine. You have an on/off button, and that is basically it. “Well hey! That sounds like my kind of deal!” Hold on a second. That means they can literally try to burn your hardware to the ground…and they will by the way, all in the hopes that you can bring them some easy ‘sats.
Now, you may think that is alright, because if you are mining you WANT your device to mine as fast as possible, but personally I like to have a little more control over my hardware and how hard it is pushed. I’d like to be able to set a ceiling for how my hardware will be utilized. Now, you can still use third party software from you gpu or cpu manufacturer to throttle your device and try to keep things nominal, but really… if you’re going to be going to all this trouble, better to go the full route and mine on your own rather than give that 8%+ fee away to a third party software developer.
So then, say you’ve hunted down the recent release of GETH from github, installed chocolately and wming and golang, and done some command line wizardry to give yourself some authenticated cryptographic keys and built them into your own onboard keystore. You’ve created your own encrypted wallet and you have an address and the node is pumping! You’re in the money, right!? Well, yes and no.
See, even if you go whole hog and build yourself a great little enthusiast mining rig, splurging for that 8 gpu motherboard and a whole desks worth of extruded aluminum… you still have to contend with paying down your assets. Sites like minerstat, cryoptocompare, and nicehash can help you understand if your project is going to be profitable before you start. You can enter in your exact machine specs, power consumption, and cost for electricity and walk away they will do the hard formula work and tell you just how much money your machine will make you in a 24hr period. That might sound really good when you get done exhaustingly finding out these numbers, planting them into the website, and realizing that your new 8 gpu rig will be making you upwards of 50$ a day!
The one obvious problem there is this, it doesn’t take into account the initial investment cost. With todays gpu prices that 8 processor mining rig would likely set you back close to 10k$… Now how long exactly are you going to have to mine to before you pay down you investment, and actually start making money?… That’s right, 200 days. Roughly 8 months and you could be making money with this glorious machine, at a rate which would allow you to pay for all of your food expenses if you are single and like to eat out a lot…
Ok, what if it’s not just about making money. What if you REALLY believe in crypto, and you want to spread the word and the coin around? Well then you are a true believer, and anything I say is completely moot. You should just grab that honeyminer and spread the wealth. Go sign up for coinbase and throw 20% of your child’s college tuition savings at that sucker too while you’re at it. When your chosen coin hits the moon, you’ll be able to tell everyone you did it for the kids after all.
This rant is over, but if you feel differently or have some awesome thoughts to give on the subject of personal mining, please feel free to comment or send me an email. Always looking to learn from new perspectives.