Everyone is doing it – are you mining for cryptocurrency yet? There’s a few things you need to know. The first thing you should know is that at the time of this article being written – which is early Feb 2018, the cryptocurrency mining market is over-saturated with bandwagon jumpers (including myself) which all want to make money. For the average home user, you need to know that you probably won’t make money on mining. Let’s start with the basics…
How does mining for Bitcoin work?
This is a long answer, but to shorten it up, basically you install a software onto your computer. That software utilizes your CPU and GPU to complete complex calculations using algorithms. These complex calculations build the block chain – a ledger which keeps track of all Bitcoin transactions. Think of a giant spreadsheet which you are helping to build.
In the early Bitcoin mining days, it was mostly trial by fire. Now, you can download a simple program which will determine what algorithm to use for mining. Every GPU has different capabilities, some mine better with a different algorithm than others.
How can Bitcoin mining be profitable for me?
Here inlies the kicker. At the time of this writing (Feb 2018), GPU’s are very expensive. The best cards are the ones that have a lot of virtual memory – 8 GB and up. These cards range from $800-$1200 and more. The saturation of the market with people wanting to get in on the minig craze, has driven up the cost of GPU’s. So realistically, for every $1000 you spend on a GPU, you can earn back maybe $2-$3 a day from that GPU (before energy cost). Thus, mining with desktop GPU’s at this time may no longer be worth it.
Many people today are mining with rigs that have 6 GPUs in them. The cards that you really need for mining at this time are the high end Nvidia 10 series. Unfortunately these cards are very expensive at this time. The mining craze has driven up the cost of most video cards.
Mining is actually quite easy, once you determine the correct software to use. This software will auto-select algorithms, and if you’re observant and able to tweak a couple of settings you too can earn $1-$2/day from your desktop system. There is no point in running mining software on a laptop because you will burn the laptop out.
There is a widely recognized mining software many people use, which will auto-select the right algorithm for you. It’s pretty easy and has a good user interface. Each video card in the system becomes a worker. Some GPU’s mine one currency better than another, so if you mix and match cards it’s likely that the software will choose a bunch of different algorithms for your system to run. It is possible run other applications at the same time as mining, but having a system that is dedicated to mining is often the way to go so the mining processes aren’t interrupted.
The challenge with building a rig that has 6 CPU’s or more, is that currently with the cost of good GPU’s (or video cards) at $1000 a piece, you will be investing a minimum of $6000 to build a sweet mining rig. The break even on this – let’s say you were making $10 a day so $300 a month – $6000/300 = 20 months but then consider energy cost let’s say 20% of the $300 = $240/mth = 6000/240 = 25 months. So about two years to break even on the investment. Bitcoin also fluctuates and so do the alternate crytocurrencies you would be mining.
Also, the cost will actually be more than $6,000 because you have to consider a motherboard, RAM, cpu, power supply. Most of the components you can cheap out on, but the power supply has to be pretty good to be able to support all the 6 cards (or more) that you need to run.
Throwing in cheap old GPU’s into a mining rig won’t really earn you much either. The GPU’s you choose need to support OpenCL and have a lot of Cuda cores. The more Cuda cores, the more mining operations the card can do.