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And exactly how much it earns
When I published a piece in Debugger earlier this year about mining bitcoin using any PC, tons of people were excited to follow my instructions and grab a tiny chunk of crypto coins for themselves. But as much as readers enjoyed mining bitcoin on their existing PCs, I heard from many of you who wanted to learn more about how mining works.
Specifically, they wanted to know exactly how I built my dedicated mining computer (crypto people call mining computers “rigs”). And they wanted a breakdown of how much profit my rig actually earns, taking into account today’s bitcoin prices, the rig’s power consumption, my electric costs, and more. Here are detailed answers to those questions.
The backbone of any mining computer is its graphics card or GPU. GPUs are uniquely suited to mining — so much so that GPU companies like Nvidia are now producing specialized GPUs just to serve the mining market.
Many professional crypto miners stuff 10 or more GPUs into their mining rig, and some rigs use as many as 78 GPUs. I’m an experimenter and journalist, not a professional miner. So I built my PC around a single GPU — the Nvidia GTX 1070.
Even that one GPU was extremely hard to find. Cryptocurrencies are booming right now, and the market for GPUs is incredibly tight. When I built my mining PC in 2018, there was a similar (though smaller) boom taking place, and I had to shop around for about two weeks to find a 1070 I could actually buy. I finally found one at my local Best Buy.
A lot of big-box electronics stores sell GPUs to gamers. Chipmaker NVIDIA reportedly directed stores like Best Buy to keep cards out of the hands of miners, to avoid alienating their more lucrative gaming customers, and one consequence is that you can usually only buy a single GPU at a time (miners tend to buy the cards in bulk). Since I was only seeking a single card, I was eventually able to find and order one. It shipped to my home and cost $349.99.
When it arrived, I tried to put it into my Dell desktop. It wouldn’t fit. The card is so gigantic that my compact work computer couldn’t accommodate it. So instead, I resurrected an old bare-bones PC I had built for another project. It uses an AMD FX-4300 quad-core processor, an ASUS M5A78L motherboard, and eight gigabytes of RAM in a generic black and red case like this one. As I write this, you can buy the processor used on Amazon for $58, the motherboard refurbished on Newegg for $79.89, and the RAM new on Amazon for about $33. I also used an old 1TB hard drive I had sitting around, and a copy of Windows 7 from an old OEM CD.
Buying the exact parts today, you could probably duplicate my basic PC for around $300. But you shouldn’t. If you’re going to build your own mining rig, you should build or buy a modern bare-bones PC instead of trying to duplicate my exact setup with more than five-year-old parts. I estimate that I spent around $300 on my rig (minus the graphics card).
For around the same budget, you could buy the necessary components and build your own mining rig from scratch using modern parts. Mining computers don’t need great processors or a lot of memory — they’re basically a glorified wrapper around the GPU, which does the bulk of the mining work. So feel free to use the most basic components in your own build.
I asked a computer engineering friend what he would recommend for a basic mining rig, and he provided the following parts list, with a total cost of under $250 on Newegg.
For a bit more money, you can get a fully assembled basic PC with Windows 10 preinstalled from a company like Acer or Ipason and then add a GPU. A quick search of Newegg for sub-$500 PCs reveals several options. Just make sure that whatever you buy is large enough to accommodate the 1070, which NVIDIA says requires a “PCI Express® or PCI Express 3.0-compliant motherboard with one dual width x16 graphics slot.” This might be a good option if you don’t feel comfortable building your own PC from scratch (though it’s a lot of fun — you should try it!).
I also upgraded my rig with an EVGA SuperNOVA 650 P2, 80+ PLATINUM 650W power supply, which cost $119 at the time. Mining is a power-hungry operation (we’ll get to that in a bit), so I wanted the most efficient power supply possible, to cut down on electric costs. If you’re building your own mining rig, consider choosing a platinum-rated power supply to maximize efficiency.
To summarize, here’s the hardware that went into my mining rig:
- Barebones PC (case, motherboard, RAM, OS, HD): $300
- NVIDIA GTX 1070: $349.99
- EVGA Platinum power supply: $119
- Total: $768.99
Here’s how my mining PC looks when it’s operating.
As I described in my previous Debugger piece, I use Nicehash Miner for my actual mining software. I like that it’s a one-click operation, and runs well in Windows. There are probably better solutions out there for professional miners, and you can likely eke out a bit more profit by running mining algorithms directly. But for simplicity and ease of use, I love Nicehash.
With today’s crypto prices (bitcoin is around $55,000 as I write this) and mining at full power with Nicehash, my mining rig generates $3.46 per day in mining revenue, or around $103 per month. It runs the DaggerHashimoto algorithm for the Nicehash pool.
That’s fairly close to the predicted daily revenue of around $3.60 for a 1070 on the mining revenue website WhatToMine.com. That revenue, of course, is dependent on current crypto prices — if they drop, it will likely decrease, and if they rise, it will likely rise.
Those are my gross revenue numbers — not my actual mining profits. With any mining operation, the biggest cost is the electricity required to mine. On a global scale, mining for coins and operating the bitcoin network requires more electric power than many countries. On a local scale, power is pricey, and mining rigs use a lot of it.
Here in California, I pay my utility PGE a marginal cost of $0.30919 per kilowatt-hour of electrical power.
That’s very high! The average cost nationwide is closer to $0.13, so most people are paying far less than me. The good news is that all my power comes from clean sources, like hydro, solar, and wind, so my mining should be carbon-neutral (and encourages the adoption of green power, as a bonus). The bad news is that the high cost cuts into my mining profits substantially.
My mining rig draws an average of 220 watts when it’s actively mining. Some of that is for the GPU, and some of it is for the processor, fans, and other basic components of the computer. If I run it 24 hours a day, that means I’m using 5,280 watt-hours or 5.280 kilowatt-hours of power per day. At my current electric rate, I’m spending $1.63 per day on electricity to run my rig.
After it’s used for mining, though, that power isn’t wasted. I use it for productive purposes, like heating my chicken coop, tomato greenhouse, or my home. As I calculated in a previous experiment, my rig generates 17,184 BTUs per day of heat, which is equivalent to .17184 therms of natural gas per day (my home uses natural gas for heating).
As of 2021 PGE charges $1.90 per therm of natural gas. That means my rig is saving me about $0.33 per day in natural gas costs. I also calculated that by reducing the use of my home’s HVAC system, it’s saving me an additional $0.15 per day in electric costs for the system’s fans, blowers, etc.
To summarize, here’s the full breakdown of mining profits and costs for my rig:
- Mining revenue: $3.46 per day
- Electric cost: -$1.63 per day
- Value of natural gas heating costs avoided: +$0.33
- Value of HVAC system electric costs avoided: +$0.15
- Total net earnings: $2.31 per day
My rig is earning me $2.31 per day in net profits, or around $69.30 per month. Because the rig cost me $768.99 to build, I would break even on the cost of building it in 11.09 months — a bit less than a year.
There are other costs that might creep in over time, such as wear and tear on my rig’s components. Those are hard to account for, though, because no one knows how quickly today’s GPUs will age, or how long they’ll last in a mining operation. So far, my GPU doesn’t seem to be showing any signs of performance degradation, even after hundreds of hours of mining.
There’s a lot I could do to accelerate the time frame for breaking even on the cost of my rig — or to potentially increase my mining profits.
For one, I could add additional GPUs to my computer. At least half the cost of my rig is not the GPU itself — it’s the other components, like the motherboard, processor, etc. I could easily add a second or third GPU (assuming I could get my hands on one) to the rig, and the GPUs could share the system’s other components. That would increase my mining revenues, and the total cost of my rig would only increase by the actual cost of the new GPU(s).
I could also reduce the amount I’m spending on electricity. My mining rig is profitable even with California’s punishingly high electric costs. If I was operating it where I grew up outside Philadelphia — where electric costs are around $0.10 per kilowatt-hour — I’d make more profits. In some places, electric costs are even lower, and the rig would be even more profitable.
Even here in California, I could use solar power to run my rig. This would increase the cost of my rig in the short term since I’d have to account for the cost of the panels and installation. But if I added enough panels to run my mining rig entirely off solar, I could mine indefinitely with no ongoing electric costs. That would make my operation much more profitable in the long run.
Finally, I could tweak my rig to optimize its power consumption and mining performance. I’ve used software like MSI Afterburner to do this in the past. The program lets you underclock your GPU. This reduces power consumption — often dramatically. It also decreases mining performance, though. So it’s essential to find the sweet spot between power savings and mining profits. If I found the perfect balance, I could probably eke out more profits from each kilowatt-hour of electricity that my rig consumed.
Of course, there’s another major factor to consider, which is totally out of my control. Cryptocurrency prices are highly volatile. They could increase over time, making my rig more profitable. Or they could tank, making it unprofitable to continue mining — at least with California’s high energy costs. When I first started experimenting with crypto, my rig was only making $0.76 per day in gross mining revenue, so thus far my trajectory has been positive. But that could always change, and there’s always the risk that crypto prices could drop, in which case I could be left with nothing more than a very expensive space heater.
Ultimately, that’s why I advocate for mining cryptocurrencies not to make a profit, but to better understand how the currencies work. Most of the impact of crypto will come about through the actions of huge miners — those who operate mining rigs on the scale of whole data centers, with massive economic and environmental implications.
As individuals, it’s our responsibility to stay informed about the actions of these big players and to understand the ways that cryptocurrencies impact our societies — both positive and negative. The best way I’ve found to develop a deeper understanding of cryptocurrency mining is to try it out for yourself. That’s why I built a mining rig even when it was unprofitable to run. I didn’t expect to earn a profit, but I did expect to learn a lot about mining. I accomplished that goal — and also learned a lot about solar power, PC building, and the economics of electricity generation to boot.
If you want to learn about cryptocurrencies, consider building a rig like mine. If there’s enough interest, I might even rebuild my rig using modern parts and document the whole process (let me know if you’d like to see that). You probably won’t strike it rich building a home mining rig. But like me, you might find that the learning you get from the experience is worth far more than the bitcoins you create.
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