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Sunday, August 7, 2022

Mining Cryptocurrency Is Still A Lucrative Business.

Those who have experienced Bitcoin (BTC) miners, sulking over how ASIC-based data centers have stolen the spotlight, are already familiar with alternative coins. But maybe you won a GPU in the Newegg lottery or happened to have one lying around. You might be wondering if those hard drives in your closet can earn you some cash. The good news is that you don’t have to give up entirely if you’re new to cryptocurrency mining.

This article will cover how you can get started mining (and in the case of Chia, farming) using hardware you may already have or can buy at retail, as well as some real-life experiences earning some hard cash from GPUs, CPUs, and drives. It is not a guide for devotees who plan to build custom mining rigs. This is for those interested in finding out if they can earn some cash without too much effort or who are just curious about mining, using gear they might already own or can get off the shelf.

Bitcoin mining is a thing of the past.

Inconceivably large mining facilities dominate Bitcoin mining. Over $300,000,000 worth of ASIC-powered computers is the largest. I do not see a way for mere mortals to participate, though if any of our readers can still make it work for them, please let us know in the comments. Perhaps fortunately, the “Bitcoin bubble” quickly expanded past BTC.

In particular, there are two coins I find of interest because they have broad support and can be mined with consumer hardware. Ethereum has an algorithm designed to prevent an ASIC from taking over, with the result that GPUs can dominate its production. In a different vein, the newly-released Chia coins rely on plotting and farming, which are dominated by storage requirements. There are plenty of other coins that you can still mine that might be a little more or a little less profitable on any given day, but these two are an excellent place to start.

Mining Ethereum (ETH) Using Desktop GPUs

If you have a discrete GPU, or ideally, more than once, it’s straightforward to start mining Ethereum. I first wrote about mining BTC years ago, and you needed a full node on the network, your wallet, and probably a mining pool. As of now, if you have an account at a cryptocurrency exchange that accepts ETH, like Coinbase, you can use your wallet address from that account with mining pool software.

Unless you have many GPUs to put to work, you should probably join a mining pool. There is a fee, but it is usually only 1%. By doing so, you get a share of the proceeds from a large number of miners rather than relying on your own probably meager chances of mining an entire coin.

I joined Nanopool for my experiment. Perse, there isn’t any joining. You launch Nanominer by giving it your wallet address. Versions are available for Windows and Linux, and it supports AMD and Nvidia GPUs. My RTX 3090 produced hash rates of around 110Mh/s at full power and 100Mh/s after I throttled it back to keep the memory cool with CUDA.

AMD GPUs were not competitive until I installed AMD’s custom crypto driver. However, if I were also using the same AMD GPU for gaming or applications, switching drivers would be quite a hassle. As another experiment, I tried mining on my laptop with the Quadro T2000 GPU. It never got above 3Mh/s, so that was also not unexpected.

Mining applications like Claymore, Ethminer, and Phoenix miner give you more control and flexibility in choosing pools and coins to mine. Ethermine and ETHPool are two other, more established pools. The coins you mine are determined by how much GPU memory you need and tend to grow over time. A GPU with 8GB or more memory will give you the most flexibility. The most significant change is that ETH plans to move to a proof-of-stake method of mining next year. GPU mining won’t work for Ethereum beyond that point, and you will need to switch currencies.

While the invention of ETH helped neutralize the power of multi-millionaire ASIC miners, it didn’t solve another significant issue for cryptocurrency. Creating new coins typically required consuming energy. And the more effort that was put into mining, the more power it took. At the limit, Bitcoin could destroy most of the energy available worldwide, but it could also accelerate climate change and perhaps hasten the end of life as we know it. Melodramatic, sure, but not impossible. ETH moved to compute back to regular GPUs, but it didn’t reduce the power requirement. While Ethereum’s 2022 move to proof of stake will address the issue, another approach has appeared in the meantime.

Tuning Your System for Maximum Results

Except for putting many hours on your GPU, we haven’t done anything that might destabilize your system. That’s probably enough for a casual miner. However, there is certainly room for improvement. There are mining drivers (beta) but no graphics drivers available from AMD. Additionally, tweaking a GPU’s power and voltage settings can help improve performance and cooling, flashing a custom BIOS. Many websites will walk you through each of those, but I recommend keeping careful notes on what you change and understanding the potential consequences.

Enter Chia: An Attempt to Make a Sustainable Crypto

By creating a cryptocurrency that relies on “farmers” (sounds so much more organic than miners) to develop plots on disks and tie them up as farms, the creators of Chia claim to upset the energy-consuming apple cart. If you think of your farm plots as bingo cards, the more you have, the more likely you are to get BINGO! If you could get bingo cards to park on your hard drive for free, there wouldn’t be much to dislike. It takes a considerable amount of disk activity to generate your bingo cards. Therefore, the spoils are likely to go to the owners of the largest, fastest SSDs. If you use a standard consumer drive (or worse, your system drive), you might wear it out.

Practically, the price of XCH has collapsed to the point where, for each terabyte dedicated to Chia farming, you can, in theory, expect to earn about $1 per month. For most people, it’s not exciting unless the currency rallies. Once plots are created, the actual farming requires almost no resources other than disk space. Currently, there is no secure Chia pool protocol, so you’re on your own. With the current difficulty level, you can expect to farm a complete coin (roughly $300 right now) about once every 20TB.

Mining Multiple Currencies

You can mine several currencies simultaneously, each using a different resource, if you dedicate the entire machine to it. For example, it is possible to plot and farm Chia while mining Ethereum since one uses CPU and disk bandwidth while the other uses GPUs. As long as I don’t need to use a specific application on the GPU, I can also farm Chia and mine Ethereum simultaneously. One caveat is that the initial plotting process for Chia can take some CPU, so if you want to use the computer for other things, don’t give it too many cores.

So Is Casual Cryptocurrency Mining Worth it?

A lot depends on your energy costs, as you might expect. We have some of the highest electricity rates in Northern California. My Nvidia RTX 3090, at around 100Mh/s, would probably earn around $5 per day mining Ethereum. It uses about 270-300 watts of power to operate. This is more than $2 in electricity alone over a day. The 3090 isn’t the best power performer, and the chart above shows some better alternatives. Even with the hardware you already own, cryptocurrency mining may be more of a hobby than an enterprise.

Enthusiasts also reveal anxiety about reducing the useful life of your GPU. The consensus appears that the additional risk is negligible as long as you don’t overheat it and make sure your power system can handle it. These days, it is hard to replace a fried one if you happen to fry one.

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