Mining Bitcoin directly was once a very profitable activity. Nowadays, things are different. Bitcoin mining is not a hobby; it’s an industry. Like most extractive industries such as oil, timber, or coal, the industry is dominated by large, efficient players and the profit margins are razor thin. You can’t mine Bitcoin directly (and profitably) as an individual.
“But wait, my friend mines Bitcoins all of the time!”, you may be exclaiming. No, your friend mines cryptocurrency that she can then trade for Bitcoin; it’s a big difference. Indeed, since Bitcoin’s inception, 100s of alternative currencies have been created. These are called altcoins. Some of the more popular ones include Ethereum, Litecoin and Monero.
So what’s the difference? Well, there’s only one Bitcoin. Some liken it to the “Coca-Cola” or “Kleenex” of cryptocurrency since it’s a proprietary eponym or synecdoche , a word often used to refer to a greater class of technologies.
Bitcoin and all cryptocurrencies have various properties including their mining algorithms, total number of possible coins, difficulty (how hard they are to mine), and of course, their price. These properties add up to give one a holistic picture of whether or not a coin may be worth one’s while to mine. Some “cryptocurrencies” aren’t even cryptocurrencies, such as Ripple. Ripple cannot be mined.
Choosing which coin to mine is a complicated question, but fortunately, there is an easy solution which avoids answering it. Nicehash is a website that allows on to hook up their mining PC and simply let it mine what Nicehash determines what will be the most profitable. Nicehash then automatically pays its users in Bitcoin.
This article describes 5 products and ways of mining alternative cryptocurrencies. I make a point of saying in every article related to mining that it is fun, but it’s also not the best way to invest in cryptocurrency or to invest in general. If you want to gamble on crypto, throw your money in directly. If you want to invest, talk to a professional money manager or stock broker. If you want to nerd out and extract cryptographically generated numbers from the Internet, read on.
1. Use a Run-Of-The-Mill PC (Perhaps The Very One You’re On)
The Illuminati doesn’t want you to know it, but you can already mine on your current Windows PC. Depending on the specs and components in your computer, you may even be able to get a decent amount of crypto. One of the huge benefits of using your normal PC to mine is that the downside is basically the increased cost of electricity, which is likely to be borderline undetectable, depending on where you live, around $10 a month for me.
If you have a graphics card in your PC, you will fare much better. Modern GFX cards such as the GTX 1060, 1070, and 1080 are all decent at extracting a profitable amount of crypto (assuming the prices don’t drop). Even if you have an older graphics card or only a CPU, this can still allow you to leverage your machine’s power to obtain cryptocurrency in a risk-free fashion.
If you’re going to be using the graphics card in your PC and you want a plug and play option, then Nicehash will be your best option. It can yield you between $1 and $3 a day in revenue, depending on your graphics card.
If you only have a CPU, however, I would advise you spend some time researching which coins can be effectively mined with a CPU and, even more importantly, which coins are bound to appreciate in value. CPU mining isn’t very effective (about an order of magnitude less than GPU mining), but if you mine the right stuff you may do well. This thread on Bitcoin talk is a good starting point.
Full disclosure, as someone who has been willing to invest only marginal time in researching which coin to mine, I have opted with Garlicoin. For one, mining it was straightforward. For two, it bears considerable resemblance to Dogecoin. In 2014, I mined thousands of dollars of Dogecoin when it came out, and had I held it, I would’ve made that profit. Since Garlicoin is similarly a memecoin and has a very popular subreddit, I believe it could be a good investment. In any case, I don’t mean to be a shill, however, I think the Garlicoin documentation is great and a good starting point to get your feet wet.
2. Buy a Computer With Graphics Cards
Buying a new PC exclusively to mine cryptocurrency is a rough financial proposition with bad investment prospects. Don’t do it. That said, buying a new PC because you need a new PC and you’d like for it to be able to mine crypto is the best way to dabble in mining cryptocurrency. Just to reiterate, this isn’t a highly effective or profitable way, but if you’re in the market for a new PC, all you need to do is get one with a GPU and you’ll have a decent cryptominer on your hands- if prices and difficulties stay the same, you could expect to break even in one to two years. The more likely scenario is that something more drastic will happen. Prices will go up or crypto will burst. In either of those cases, you’ll either profit, or you’ll simply have your new PC (which you bought because you want it for other purposes).
Here’s a great all-around PC to go with: The Omen by HP. It boasts a Ryzen 7 1700 processor, 1TB data drive, 256GB SSD (for the OS and some storage), and a GTX 1070 for decent crypto-mining power. For $1479, this is a really well-rounded PC that will be great for virtually any application: video editing, gaming, music production, and more.
If you want the cheapest PC with the most mining power, this HP Pavilion Power has a GTX 1060 that will offer about 2/3 the mining power of a 1070, but at less than half the cost at $744.99. That said, the overall PC is much less balanced (1TB 7200RPM drive, only 8GB of RAM, far inferior i5-7400 processor).
If you want a true miner, see the last item on our list.
3. Hook Up a Graphics Card to Your Current Laptop or Desktop With a Thunderbolt 3 Connection
If you already own a laptop or desktop with a Thunderbolt 3 port, then this is the solution for you. Several manufacturers have created products known as eGPUS. These devices plug into this extremely fast port and allow one to use a graphics card externally. This is about as easy as it gets: it is plug and play, folks. That said, I feel obligated to disclose that I bought an EGPU for this very purpose and it ate the dust on me after about three weeks of use (fortunately, my purchase was refunded).
Still, many people do report that their EGPUs have lasted them. Perhaps you can psychologically mitigate the risk here if you use the EGPU for gaming or some other purpose (certain video codecs benefit tremendously from GPUs, such as Cineform).
In any case, there are two types of GPU. One type is simply a box to throw a graphics card in. A popular unit is the Akitio Node. The other type includes a graphics card already. The latter is a much better deal since graphics cards themselves are extremely pricey. Examples include the Aorus Gaming Box (GTX 1070) for $689.99 and the Sonnet eGFX Breakaway Box (RX 580, an AMD graphics card) for $699.99.
4. Put a New GPU In Your Current Desktop PC
Many people are intimidated by opening up their PC, but it’s not that difficult. That said, even if you refuse to do PC surgery, Best Buy (Geek Squad) and your local PC shop should be willing to install a graphics card for you at a reasonable price, perhaps $40 or $50.
Once you install the GPU, you’ll generally need to install some drivers and then it’s smooth sailing to crypto town. Of course, you will be bottle-necked at the current very high price of graphics cards. This is one of the other benefits of buying a new PC: you are able to obtain the graphics card at a reasonable price. Unfortunately, item 5 also succumbs to this problem. Right now, the graphics card market is a seller’s market and prices are going up regularly. Just one month ago, for instance, the price of the Aorus EGPU was $599 – now it’s about 10% higher.
Price:$400 – $600
5. Build a Dedicated Cryptocurrency Mining Rig
For those who are truly willing to go all in, building a cryptocurrency mining rig is by far the most potentially profitable manner of mining cryptocurrency. However, it is also considerably riskier, more expensive, more difficult, and ultimately still not as good of a choice as simply investing in cryptocurrency (in terms of profit). Of course, many people find mining to be more psychologically satisfying, or perhaps seemingly less risky, and if you are one to embark on a challenge, building your own rig isn’t that hard. See the above YouTube video to get an idea of the process, but the bulk of the cost is the graphics cards, then you’ll need a CPU, a small hard drive, a bit of RAM, and some of the stuff to put it all together.
In the end, you stand to make a fair amount of cash, but again, it is commonly accepted wisdom that investing is a better choice than mining. After all, with each passing day, we drift closer to the release of new graphics cards – sure to not only decimate your mining power, but also the resale value of your miner. Identically, when the price of crypto falls or if mining becomes too difficult, do you really think you’ll be the only one trying to sell a 6 GTX 1080 rig? A seller’s market now means you will likely be selling in a buyer’s market later.
I don’t mean to be too fatalist, building a six card rig is still very efficient relative to the other options (besides the eGPU or adding a graphics card), it’s just a lot of upfront cost. You can expect to recover your funds within only one year with a miner, assuming everything stays steady or goes up, and assuming you can get your graphics cards at reasonable prices ($400 for a GTX 1060, $600 for a GTX 1070, and $700 for a GTX 1080).
Can’t I just buy a miner?
You can but they’re grossly overpriced. This is going to hurt your chances of profitability even more. After all, if someone can build a profitable miner, why would they sell it when they could simply choose to mine themselves? For completeness, here’s a miner rig on Etsy. It’s a rip off. Unless you’re a surgeon or something, it will be worth the hours you put in to build your own.
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