Mining Cryptocurrency

Mining Cryptocurrency

Some people might believe that mining cryptocurrency is an easy, fast way to make lots of money. After all, crypto prices are volatile and are sometimes extremely high. However, cryptocurrency mining is complex and time consuming. It’s also expensive and is not worth it in a lot of cases.

It might surprise you if you’ve read my post about cryptocurrency that I have some experience with mining cryptocurrency. I’m not talking about my small foray into Bitcoin mining when I was in college. I’m talking about my experience with GPU mining rigs. Mining cryptocurrency is an interesting process, and not for everyone. I’m not going to go into exactly how to do it, since it’s fairly technical, but I’d like to just share a little bit about it.

My own mining adventure started back in 2017 during the first cryptocurrency boom. It created such a hype and the prices were going up fast. I was talking with some coworkers of mine about Ethereum and Bitcoin. Unfortunately Bitcoin was no longer easy to mine. It required a special ASIC miner, like the Antminer by Bitmain, and you could pay up to $3,000 at the time for one that was capable of making a few thousand dollars worth of Bitcoin per year. Now, bitcoin miners can cost in the tens of thousands, with an unknown return, mostly due to market fluctuation.

Cryptocurrency had another big spike in early 2021 which could have been partially caused by the increase in money and spending due to COVID-19. It could have also been caused by renewed and increased awareness. Either way, due to the price spikes, it has been worth it to mine again. At least for me. I have two GPU-based mining rigs. One is AMD and one is NVIDIA. I set them up to mine Ethereum using a mining pool and Bitcoin using Nicehash. But how do you determine if it’s worth mining for yourself?

Making sure it’s worth it

To determine if it’s worth mining, there are a lot of free websites that let you put in a bit of data and find out if it’s worth the price of electricity to mine a certain cryptocurrency. Here are a few I have used in the past:

  • Nicehash profitability calculator
    Since Nicehash selects the coin for you, it is useful to install the software and allow it to automatically detect what is best to mine and how much you’ll get from it.
  • Coinwarz mining calculators
    These are for raw mining calculations, where you know the amount of hashing power your setup has and what type of coin you are mining.

Don’t forget to consider the actual costs of buying the mining equipment itself. Depending on how you want to mine, you’ll need to either purchase GPUs, ASIC miners, or purchase hashing power from a provider that sells contracts. Mining contracts, where you are buying hashing power, is the easiest way to mine but it does cost more than if you were mining it yourself.

If you do end up deciding to mine, you also have to spend a decent amount of time making sure your miners are running, functioning, and that your energy costs are not causing problems as well. You will also have to deal with the heat that is generated from your mining rigs. No matter what type of mining you’re doing, the amount of electricity it requires will create a lot of heat. If you’re in an air conditioned house, you’ll be paying more to keep it cool, which should factor into your costs.

You’ll also have to determine where to send the coins once you have mined them. What will you end up doing with them, holding them as investments? Sell them? Depending on what you plan on doing, it can have an impact on whether or not it’s worth it to mine rather than just buy it outright on an exchange.

What do you recommend?

I would not recommend mining cryptocurrency unless you are a very technical person. Even then, I don’t think that mining is something most people would enjoy or want to do. It’s very tedious and can easily cause more trouble than it is worth. I would always recommend anyone who wants to get into crypto to pick a good, trustworthy exchange to buy their coins from. Just remember that like most computer-related things mining is a lot more work than it seems, and in the end it is not a get rich scheme.

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