Have you heard of cryptocurrency mining and want to know more about it? You are interested in how it is done and how much can be earned. A large number of people are tempted by the idea to buy a machine, put it in the attic, turn it on and no longer think about it. Unfortunately, not everything is so ideal, and for the story about mining, it is necessary to take into account many factors such as electricity consumption, the price of cryptocurrencies, the price of equipment, novelties in the crypto world, noise, heat, etc.
Before you decide to engage in mining, you must first ask yourself the following:
What cryptocurrency do I want to mine?
First of all, you need to research which cryptocurrency you want to mine. The type of equipment we will buy depends on this. One should research and know well the project (Bitcoin, Ethereum, Monero) in which one invests because later changes are difficult or almost impossible.
For example, you will use ASIC devices for bitcoin mining, and you will use graphics cards for ethereum and moner mining. Since Monero and Ethereum have different mining algorithms, you will also be looking for different graphics cards.
We will use the example of ethereum mining due to minimal investments and because it does not require special equipment required by Bitcoin. It is possible to mine ethereum on any average computer with a discrete graphics card. You will not earn much like this, but it is a good way to get acquainted with the concept of cryptocurrency mining.
How much money should I invest in cryptocurrency mining?
Before we start looking for equipment, we need to determine the amount of money we can set aside for the purchase of equipment. It is important to think carefully about the budget and invest only what you are ready to lose. This principle is related to every type of investment in which there is a risk, and the risk is especially pronounced in the crypto world. It is recommended to avoid loans and other types of borrowing in order to purchase equipment for cryptocurrency mining.
Where can I find cryptocurrency mining equipment?
There are several ways to mine cryptocurrencies, and everything is based on processor power and equipment optimization. For simplicity, we will focus only on ethereum mining, and the principle is similar for mining other cryptocurrencies. Research has shown that ethereum is very popular in EU, partly due to the cost-effectiveness of mining and cheap electricity.
To mine ethereum, you need graphics cards, the same ones used in gaming computers. You can find these cards at any computer hardware store like Gigatron or WinWin. Buying graphics cards in stores like this is a good option because you will be sure that they have not been used before, and you will also get a warranty on the equipment, which is very useful in case of a breakdown.
A good part of the miners still decide to look for the equipment through advertisements. This variant will probably save you money, but the correctness and guarantee are in question. The question is where
The equipment you procure comes down to your budget and risk tolerance.
Do I have room for equipment?
Depending on the equipment, you must also consider the space that the equipment will take up. It is necessary to consider the equipment not only on the basis of how much physical space it will take up, but also how much heat there will be in the room and how noisy it will be. You don’t want to sleep in a room where mining rigs work 24 hours a day. The heat in the room will depend on the consumption of your equipment. If your equipment consumes 1kW, it’s the same as having a heater of that power that works 24 hours a day.
The minimum space could be a pantry with a window, but it would be advisable to keep the equipment as far away from you as possible. A typical example of a cryptocurrency mining space is an unused garage, basement or attic. The room must have good ventilation and internet access. If you can, connect your rig with a cable, because the WiFi connection can cause you additional problems due to its unreliability.
Does cryptocurrency mining pay off?
This is the question that probably interests everyone the most, but unfortunately the answer is not so simple because your rig does not mine dinars, but a cryptocurrency that you can convert for dinars. As we know, the prices of cryptocurrencies can vary a lot in price from day to day.
Here is an example of a financial analysis for a mining rig that mines ethereum:
- Price of a new mining rig with 8 cards and all accessories: ~ 1800 EUR
- Price of the same used rig on ads: ~ 800 EUR
- Electricity consumption on a monthly basis: ~ 8000 RSD or about 70 EUR
- With a rig like this we can mine: ~ 0.5 ETH
- At the current price of ETH it is: ~ 37500RSD or about 315 EUR
- Current monthly profit would be: 87 EUR
Most miners do not sell cryptocurrencies at the end of each month, but make stocks and wait for the price of cryptocurrencies to rise in order to maximize their profits. It is important to note that ethereum (ETH) at one point reached a price of almost 1200 EUR (January 2018) and that its price has jumped by more than 9000% since its inception (2013).