Cryptocurrency | Ethereum Mining | FAQ
Shocking Cryptocurrency Mining Facts
The price to power my small mining operation is mind boggling!
I started mining cryptocurrency near the end of 2020. It led to a lot of interesting conversations. People always want to know how I got started or how profitable it is. They are always surprised by the amount of heat mining equipment puts out or how ridiculous my electricity bills are.
The Easy Questions
I don’t talk too much about my cryptocurrency mining, mainly because it isn’t something the general public understands. If I went to my grandma’s house for Easter and told her I buy high end computer parts so they can run at full power in my house and somehow I get paid for that, I’d lose her immediately. To be honest, the concept of donating my computing power and getting paid for it still blows my mind. For those of you who are a bit more curious than the average grandmother, I’ll answer the typical questions.
How Did I Get Started Mining Cryptocurrency?
During the pandemic I got into watching a lot more content on YouTube. I’m into computers and technology, so naturally I started watching a lot of Linus Tech Tips videos. One of their old videos was about mining cryptocurrency, specifically Ethereum. I ran the numbers and realized I could buy some equipment and still make money every month after subtracting the cost of the hardware and power to run it.
I bought my equipment on Amazon and Newegg for below MSRP and was able to buy in large quantities without any supply issues. The first computer I built myself was actually an open air mining rig with 6 GPU’s. Little did I know that GPU prices would skyrocket, tariffs would be increased on electronics, and increasing cryptocurrency prices would cause it to be more profitable than I could have possibly imagined.
How Profitable is Cryptocurrency Mining?
Well, that depends on many, many factors. How much computing power is going towards the Ethereum network, the currency price of Ethereum, how much activity there is on the network, how much computer equipment costs, the list goes on and on. I was fortunate enough to get started when the price of equipment was incredibly low, so much of what I bought paid for itself in well under a year. There are online calculators like WhatToMine that show you how much you will make from certain GPU’s after power costs. It’s pretty simple to take that number and figure out when a GPU or motherboard would pay itself off.
I was fortunate enough to get started when the price of equipment was incredibly low
What I did is treat my mining operation like a business. I financed the purchase of my initial hardware at 0% interest for 18 months. The monthly cost for my hardware and electric bills have always been less than the amount of money I bring in each month, so mining cryptocurrency has been profitable from the very first day that I started doing it.
The Surprising Facts
For those who don’t have a high end computer (or multiple) running in their home 24 hours a day, 7 days a week, I envy you. There are some downsides to mining cryptocurrency that people just aren’t aware of. I didn’t really understand them all until I started mining.
Computers Are Hot and Loud
It might sound crazy, but computer chips generate a similar amount of heat per watt as space heaters. If you are drawing 1800 watts from the wall to mine cryptocurrency, it generates a similar amount of heat as a typical space heater. And don’t get me wrong, this is awesome in the cold winters. Who doesn’t want a space heater that makes money by running? My heating bills in the winter dropped significantly by running a crypto mining rig in my home office. Crypto mining YouTube channel Red Fox Crypto even made a video about how to direct the heat from some mining rigs into his home’s central heating system. Not too shabby, at least until you get to the summer and it’s 80 degrees out. That’s when you don’t really want the massive space heaters running anymore.
…it’s 80 degrees out. That’s when you don’t really want the massive space heaters running anymore
How do the components stay cool with all these heat? Fans. It isn’t unrealistic to run the 2–3 fans on each GPU and 5+ fans per case at full speed. All. Day. Long. It’s easy to tell when there is an issue with a mining rig because it will be eerily quiet with 20 plus fans not on anymore.
Your Power Bill is How Much?!
One of the most shocking facts about my small time cryptocurrency mining operation is how much my home’s power bill is per month. What friends will always find more shocking is how nonchalant I am about the astronomical price. I said it already, I treat it like a business. Power is a cost of doing business. If your cash flow in is greater than your cash flow out, you’re in the green. At my peak I was spending $300+ a month on electricity for my mining rigs, and that doesn’t even include the cost to run my central air conditioning.
…I was spending $300+ a month on electricity for my mining rigs
Conclusion
Mining Ethereum has been a very educational experience. It opened me up to the experience of building my own computers, picking hardware based on my specific use cases, managing the costs of running a business, and got me some pretty interesting conversations. Some of the GPU’s I used for mining have been put into computers where they can work on different hobbies now, like 3D modeling and data science. I don’t think I’ll be mining forever, but I’m going to hold on and see where it takes me.
