As you may have read, I took my first steps in being a mining 1337 a few weeks ago. In the meanwhile, things have changed, because thanks to a new miner I’m making a profit!
Have you learned to build a miner yourself and now it’s time for a next step? Then hopefully this article describes what you must do. Let me rephrase that: It will give an insight of what I did
Initially, I bought the so-called LKETC miner a few weeks ago. The chip of this miner is programmed so that he is “good” in just one particular thing: mining. Now the LKETC is not only small in price (19 euros) and size (two match boxes thick), but also in result; It will take up to 24 months before the cost of this miner is compensated.
You will understand: Ultimately I’m a Dutchman and I want value for money, so I decided to buy a new miner. However, on what should you pay attention when purchasing a miner?
Cost versus returns
Perhaps the most important part for purchasing a miner is the cost versus the returns, aka return of investment (ROI) . This is based on a number of factors, and this actually means revenue – cost = profit. For a miner it means: miner reward (reward you get for the delivery of computing power) – the energy costs (watts you use miner per hour x cost kWh per hour) = profit. Finally, you have to divide the miner’s purchase costs by your daily profit, then you know how many days a miner earns himself.
However, the following problem occurs because
- The miner reward) expressed in euros per blockchain differs and depends on the worth of a cryptocoin
- Purchasing costs differs per mining device (from 10 till 10k)
- Energy costs are different for each energy supplier (and by country).
The last two points from the above line are for many big miners the reasons to operate from Iceland or China. The Asian country is ideally suited to push the electricity and mining costs, Iceland is interesting because of the intense cold. As mining equipment gets hot, it must be cooled. However, if you choose an ice cold country, the costs for air conditioning and other cooling devices are not necessary anymore.
Given that my mining company is nothing more than a hobby, I found it unnecessary to look at the opportunities to settle in Iceland or China, but I’m Dutch, so I’m paying attention to the penny.
Online are a lot of handy tools to calculate how much a miner supplies about, or costs, daily. Without paying too much detail, I can recommend your Coinwarz to calculate whether your miner will be profitable.
To buy a miner, it is important to weigh the costs and returns against each other. As the rate of cryptocurrency is volatile, revenue can change dramatically on daily basis!
Which encryption technology?
As you may know, blockchains do not all use the same encryption technology to encrypt blocks. For example, Bitcoin SHA-256 (in video from 06:00), Ethereum uses the Ethash technology and Gulden transactions are encrypted in Scrypt. Since a miner basically deciphers a kind of cryptographic key, you should pay close attention to what you buy.
I would like to mine Gulden, so it’s important that I have a Scryptminer.
Type: CPU, GPU, FPGA or Asic?
At the time of writing, Asic miners are popular. Asic stands for Application Specific Integrated Circuit, which briefly means that a computer chip has been created for a specific purpose. The FPGA or Asic miners are popular because they are generally faster and more energy efficient than CPU or GPU processors.
My new miner
I bought a 256Kh/s LKETC miner and initially I was very excited about the Antminer L3+. This Bitmain machine has a hashrate of a whopping 504 Mh/s (splendid for a Scrypt miner) with a consumption of about 15 (European sized) refrigerators: 800 watts per hour.
Unfortunately is this miner’s waiting list until September 2017 and I’m an impulsive buyer, so I went for another version: the Gridseed G-blade. With a 5 Mh / s (yes, you read well: 5 Mh/s) under the hood and a power of 100 watts, the Gridseed is the Eric Moussambani among the miners. I compare him to Eric, because he may be sloppy, the Gridseed does what he promises!
The device was offered for $ 61 on Aliexpress. Used, but not part, so that’s why I bought him.
A Gridseed G-Blade has a 5 Mh / s hashrate, which means that it can run 5000 kh of calculations per second; About 20x faster the LKETC miner I previously bought.
Waited patiently for 3 weeks, the miner arrived. I bought the Gridseed without a power supply unit (PSU), which I forgot. Upon entering, I immediately wanted to connect him to my Raspberry Pi, but it had to wait a while. Fortunately, there is internet and I found online a manual to connect a 12-volt mining to a regular computer power. That worked (as you can see in the video).
Although I previously recommended Coinpool as your mining pool, I’ve switched to Prohashing. Although the payout to the mining pool managers is higher, I’m more satisfied. At Prohashing, I can choose which type of cryptocurrency I get paid. As you can see, I earn about $ 0,50 a day.
With $ 0,40 electricity costs (I save money because of solar panels), I make $ 0,10 revenue per day. In short, $ 61 / 0.1 dollar a day = 610 days = 20 months ROI (only the miner).
If you’ve finished school with a sufficient level of primary education, you probably will realize that I do not profit quickly. Then why I opened my story with “I even win”? I will explain.
As stated, Prohashing allows you to determine in what kind of crypto you want to get paid your block reward. I chose Reddcoin and Digibyte; Two coins that are very low in value, but in recent weeks have risen particularly hard. What’s called: Reddcoin (RDD) increased 1.800%, Digibyte (DGB) even 2.900%!
You will understand, if I received a few dollars in DGB for block rewards and the value increases by 2,900%, I can pay my miner’s purchase costs right way.
Something it’s easier by luck, than through skill 😉
PS: Yes, my miner’s name is Henkie.
Do you have a tip, feedback or did I forget something? Let me know!