How to mine bitcoin: The founder of a mining farm breaks down the costs of electricity and equipment, how to pool, and the profits he earns in the process


  • Mining bitcoin can be a cheaper alternative to buying the asset at a volatile price.
  • Miner JP Baric shares all the platforms he uses to determine profit ratios. 
  • For profitability, an investor must factor in the machine’s price, electricity usage, and pool fee. 

With bitcoin’s price hovering above $30,000, it could easily feel like you’ve missed an opportunity to get in early. And while the cryptocurrency continues to make global headlines on a daily basis, investing in an asset that tumbled 50% in a matter of months after reaching an all-time high around $65,000 feels risky. 

That’s why JP Baric, CEO of MiningStore, prefers to invest in a bitcoin miner rather than buy the asset at a volatile price. His current go-to hardware, the Antminer S19 pro, retails for about $10,000 and has a shelf-life of about three to five years, he says. 

Baric has been an avid miner since he was a freshman in high school in 2013. At the time, mining bitcoin was out of reach for him because they required pricey ASIC machines. So he started off by mining litecoin using GPUs set up in his parent’s basement. 

“I was reading TechCrunch in school and I saw that this digital currency was rising in price in 2013. And I thought that it would be successful and that it was very cool because it separated money from the government,” Baric said. 

At the time, he was running a robotics summer camp where he taught kids how to build Lego robots and program them. He told Insider any money made from his job would be set aside to purchase crypto mining hardware. 

In 2016, he was able to start mining ethereum after he combined his capital with money from family and friends, and purchased 300 graphics cards. This allowed him to earn about 500 ether per day, he said. 

Baric set up the ether mining rigs in an old clothing factory he leased in order to gain access to lower electricity costs. 

“I would drive about an hour and a half from where I went to school in Raleigh to where the mining facility was at an old yarn mill, where they made clothes,” Baric said. 

Today, he oversees three facilities in Iowa, Colorado, and Oklahoma with over 3,000 bitcoin miners used for internal profit and on behalf of clients.

Baric is part of a growing industry. The global cryptocurrency mining hardware market (ASIC hardware and GPUs) is expected to grow by $2.80 billion at a compounded annual rate of over 7% from 2020-2024, according to Technavio, a global market-research firm.

Baric said he was able to expand his operation into bitcoin mining because financing companies now lend money to finance the operation. This has also allowed him to sell and host miners on behalf of clients.  

In an interview with Insider, Baric broke down the details of what you need to know about bitcoin mining, and how you can run your own rig at home.  

Costs versus profitability 

The first step to determining the profitability is checking power costs, which make up about 80% to 90% of the ongoing cost of running a bitcoin miner. 

“If you’re thinking about running a bitcoin miner in your house, you check your local electric bill, or you look online for your local residential rates, and you figure out what that is,” Baric said. “Usually that’s going to be in per kilowatt-hour. I would say $0.06 per kilowatt-hour is a good rate to run at your house.”

Baric’s mining facility in Iowa, for example, runs at $0.04 per kilowatt because it’s on an industrial rate which is cheaper, he noted. 

The second step he says is to check the data points on the machine you’re considering. This can be found on the manufacturer’s website. Each miner has a different amount of watt usage. For example, the S19 uses 3,250 watts of power, equivalent to about three microwaves, he said. 

“So you need a dedicated outlet or dedicated circuit in your house to run this machine. You can’t have other appliances on that circuit or on that power plug,” Baric said. 

He also warned consumers about purchasing hardware from platforms that aren’t reputable because there are numerous scams. He says some of the top manufacturers in the industry are Bitmain, MicroBT, and Canaan

Once a miner is up and running, it will need to be connected to a pool, a process that allows miners to share computing power and split profits to receive consistent payouts. Average fees associated with a pool are about 2% of revenue. 

Baric uses a mining pool called Luxor but he recommends doing research and looking at all the available options before choosing a pool. He suggests joining one with at least 5% of the network hash rate to increase the chances of steady payouts. These percentages can be found on various pool comparison platforms.

he also refers to websites like or ASIC Miner Value to check the profitability ratios of each machine, including estimated electricity costs.  

Based on CryptoCompare’s website, which factors in electricity, hash rate, and pool fees, the Antminer S19 currently generates 0.3204 bitcoin a year. At $0.06 per KWh, electricity costs would average $140 a month, resulting in profits per month of about $689. These rates are based on bitcoin’s recent trading price of around $32,141.72.

Baric’s company, MiningStore also allows customers to buy a miner through them and then host it at their facility in Iowa. They deduct $0.04 in electricity costs and 20% of the profits for servicing the miner. 


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