Is cryptomining dead? Didn’t the Ethereum merge kill it off? Hardly. It’s a great time to get into cryptomining. Here’s why:
Crypto is here to stay and while there has been a huge amount of fraud, hucksters, hacks and scams this past year, none of that has to do with the underlying technology of blockchain itself. While Proof of Stake coins are getting all the love these days, they are also getting all the heat from the regulators like the SEC. It’s becoming increasingly evident that Proof Of Work coins like Bitcoin are not just better for the space, but are outside of the purview of many in the government who want to claim that Ethereum, XRP and even HEX are all securities. This attention to POS coins has even made Michael Saylor, the CEO of Bitcoin himself state that Litecoin could be considered a commodity like Bitcoin. Bullish.
But the mining industry shakeup since the Ethereum merge to POS has put blood in the water and for those with a little bit of tech knowledge and some high risk tolerance, this is an opportunity.
If you want to get into cryptomining here are the bare basics of what you need to know BEFORE you get started:
Power
Mining takes power. A lot of power. Whether you are mining on your gaming desktop at night or going for a full 24/7 operation, power is something you cannot screw around with. You are pushing electronics to their limits and any corner cut will cost you. Desktop rigs will overheat, over-amped connectors will melt and power supplies will fail. If you go cheap on your power routing and cooling management it WILL bite you in the ass. Usually in the form of poor performing rigs that have more downtime or by burning down your house. Dedicate your power circuits, watch your amps, keep them on their own breaker and, if you can afford it, pay an electrician to run a dedicated 220v line for your setup.
220v lines are what powers your big appliances like dryers and washing machines. They are basically a requirement for larger operations or even for just ONE ASIC miner. You can run it off of a dryer/washing machine line but that’s only good for a few machines.
Your everyday 110v can handle smaller GPU rigs or a single desktop but understand that your machines are running beyond their intended workload so heat is going to be a thing that you must manage.
And before you ask; don’t bother with liquid cooling. It’s more of a hassle than it’s worth.
ASIC vs GPU
Coins are mined according to specific algorithms. The more famous coins like Bitcoin, Litecoin and Dogecoin are mined using an array of specialized chips called Application Specific Integrated Circuits or ASICs. These machines are the size of a toaster oven and are just as hot and 100x as loud. ASICs have dozens of chips shoved into their cases and they are made to mine coins HARD. They require a large amount of power, the smallest using more than a standard microwave…24 hours a day and hopefully 365 days a year. It’s not uncommon for an ASIC machine to cost anywhere from one to fifteen dollars a day to run.
ASICs also have a high upfront cost. The cheapest, profitable Bitcoin miner runs about $1500 for one machine and you’re only getting about .50 worth of Bitcoin a day. Others like the Antminer S19 XP mines about eight dollars’ worth of BTC a day. It also costs seven thousand dollars. There are miners that are more manageable like the adorable Goldshell Mini Doge Pro that runs about five hundred bucks. It’s important to note that with few exceptions, ASIC miners only mine one coin. You cannot mine Bitcoin one day and then Kadena the other.
GPU (Graphic Processing Unit) mining is much easier to manage in that you can do it with pretty much any home computer made within the last three years. GPU’s also offer the added flexibility of mining different algorithms, which gives you more flexibility to earn profits. The cards vary in their power and hashing ability so you’ll need to be extra careful when choosing which card and which coin to mine.
GPUs also require modification of the chip settings, called overclocking. This overrides the factory settings and allows the GPUs to run for extended periods of time with lower power and higher hashing performance. If you don’t overclock your GPU’s you are wasting money and running the risk of a meltdown. The more advanced GPU setups are called “rigs” and resemble an exposed power station. They can really chew through the coins and can run their own mining specific operating systems on linux. Examples of crypto mining OS are HiveOS and RaveOS. Mining on Linux is significantly more economical and reliable than mining on a windows machine.
*you can also mine on CPU’s but that is very difficult and limited to only a few coins like Monero so I won’t be covering it.
Wallets
The crypto you mine has to go somewhere but you can’t just mine to any old address. Only set up your miners with a wallet from the project. Use the Bitcoin Core wallet for Bitcoin, the Ravencore wallet for Ravencoin and so on. It’s tempting to mine to an exchange like Coinbase or Gemini but those wallet addresses don’t belong to you and can change or go down without your knowledge. If you mine to a dead address those coins are burnt forever.
Flip or Hodl?
The other thing you want to ask yourself is are you in it to make profit or are you going to hodl until prices go up. Back in 2021 it wasn’t uncommon for some Ethereum miners to make $40 per day PER CARD mining. Profits like that could very well return but during the bear market it’s a different story. If you are GPU mining you’ll be lucky to cover your electricity costs and most of the profitability in mining isn’t around during a bear market. That’s because it’s a bear market and prices are down. But when number go up, profits go up. Cool huh? Make sure you understand that your setup may not breakeven for years. Coins that have a lot of upside will most likely COST you money to mine for the next 18 – 24 months. The upside is you are mining these coins while they are 80-90% off of their high so if you can hodl until the next bull run you are looking at serious profit. Lives are changed in the bear market.
Closing Thoughts
If you are looking to get rich quick then mining is not for you. It takes time and attention. Rigs will go down, overclocks will reset and heat will be something you need to manage at all times. Some say why bother to mine when you can just buy the coin. But that’s just it, mining is supporting the network. It’s taking part in something bigger than just your bags. It’s also a means of investing into crypto and when you are done mining you have asset you can resell and cover your startup costs. The prices for mining equipment are getting lower by the day and with POW coins looking more robust, it’s never been a better time to start mining crypto.
Quick Reference
Whattomine is the place that shows you profits and revenues for nearly all minable coins based off of current hashrate and difficulty.
Minerstat is similar to Whattomine but has a few more coins and data.
Mining Pool Stats shows you the latest network stats as well as pools to mine to
Red Panda Mining and Son Of A Tech are excellent youtubers that have a ton of great mining info.
Octominers is a good place to buy new hardware.
eBay has everything you need to get starting in mining.
