Idan Abada is on a mission to democratize Bitcoin mining. As far as he is concerned, casting new coins is not just for professionals.
His message seems to resonate with the masses.
Abada, who lives in the San Fernando Valley of Los Angeles, posted her video running a $ 875 mini Bitcoin mining rig using free Starbucks power. Since then, this post has been word-of-mouth on TikTok and has been viewed and counted 2.6 million times.
The rig looks quite different from a warehouse packed with swirling rows of ASICs. This is an image that has become synonymous with crypto mining.
Instead, Abada’s miners are relatively simple. It consists of a multi-port USB hub, a mounted mini fan, and 10 USB sticks, each containing two Bitmain ASIC mining chips.
“It’s one of the easiest miners to set up and run because you only need a computer or laptop,” Abada explains. “It’s powered by USB, and that’s almost it. Anyone can be a miner and be part of the world of cryptocurrencies.”
A computer near an Icelandic warehouse where a Bitcoin mining machine was stolen. Iceland’s cheap electricity and chilly weather help keep your computer cool and make it the best place for cryptocurrency mining.
Egil Bjarnason | The New York Times
$ 875 mining rig
Abada started mining Bitcoin in his room in the share house in 2015 and agreed to pay extra for electricity with his roommates. In 2017 he opened his own store.
“I found it really difficult to buy a device to mine Bitcoin, so I created BitcoinMerch.com,” said Abada. “At first, I was the only one who sold cables and very basic equipment.”
The company currently provides its customers with all the hardware they need for mining.
Research firm Technavio predicts that the global crypto mining hardware market will grow by $ 2.8 billion from 2020 to 2024. Mr. Abada says the growing interest in cryptocurrencies has led to a dramatic growth in the business over the last four years.
Bitcoin March sales have reached $ 428,000 so far this year, up 355% from 2020, according to Abada.
One of Bitcoin March’s top sellers is NewPac, a key component of the rig featured in Abada’s Viral TikTok video.
“We sold thousands, and when we get more, they’re quickly exhausted,” he said.
Missouri-based Moonlight Science has dismantled a large miner from China and reused parts from New Pac, Abada said. Each mini USB rig has two ASIC chips, so a total of $ 875 rig has 20 chips.
However, while the consumer rig was made from parts harvested from Chinese miners, Abada says the two are fundamentally different.
For one thing, his budget rig is much quieter than an industrial-grade Bitcoin miner.
“It’s not loud, so you can run it next to your desk, which is a big advantage,” Abada explains.
“For industrial miners, you need a warehouse, power lines, and cooling. That’s all. If you try to run out of one from your house, it gets louder and you can’t sleep anymore.” He said.
But his rig isn’t that powerful.
Two important factors in determining the output of a rig are the amount of power the rig consumes and the amount of hash power it produces. Hash power, or hash rate, is an industry term used to quantify the amount of computing power a rig contributes to the entire Bitcoin network.
“The downside is that this rig has a very low hash rate,” said Abada. In short, this machine tends to produce less Bitcoin than competing rigs.
“These USB miners tend to be much less energy efficient than traditional ASICs,” explained Bitcoin mining engineer Brandon Alvanagi.
Not worth it
It may seem cool, but Abada first admitted that his TikTok fame rig didn’t make any money.
“Without free electricity, it’s actually hard to make a profit,” he said.
6.25 Bitcoins are created approximately every 10 minutes. To create these new tokens, all of the miner’s global pools provide computing power to execute a hash algorithm called SHA-256.
The exact same code runs on all Bitcoin mining rigs on the planet, including the one featured in Abada’s Starbucks TikTok post.
However, these miners are not running the SHA-256 algorithm in a vacuum. They are competing with each other to see who can first unlock each batch of new Bitcoin.
To win, you almost need to join a team of other miners. This is exactly what Abada did with his rig. But even with the help of this so-called mining pool, the income from his little rig is negligible.
According to Abada, his mini-miner generated 0.0002478 Bitcoins a month, minus a 5% mining pool fee. At today’s price, it’s worth $ 9.35. Since he’s mining in Los Angeles, his electricity bill is 22 cents per kilowatt hour, so running the rig 24 hours a day brings the total electricity bill to $ 15.84.
Therefore, Abada actually ends the month in the red and is in a tone of around $ 5.88.
Note that these numbers change in minutes and depend on the Bitcoin price and global hash rate.
It is almost always the rule that this kind of operating profit is cheaper to buy Bitcoin directly than to mine, unless you are running a rig with “exorbitantly cheap electricity or large scale”. That’s why Arvanaghi says.
“When it comes to crypto mining, it’s all about break-even costs,” says Arvanaghi.
“Such USB miners may be attractive to those who don’t have to pay for themselves. Children in public places, college dormitories, buildings that share electricity bills, employees stealing electricity from the company. And so on, “he said.
What is the most practical use case for this miner? A fun hobby for those who are working on cryptography.
“I think these are cool novelty items that will help educate people about Bitcoin mining,” said Whit Gibbs, CEO and founder of Bitcoin mining service provider Compass.
Gibbs leads a company that is also a business that provides beginners’ opportunities to get their skin in mining games.
However, Compass customers do not store mining rigs. Instead, Gibbs and his team help patrons buy mining hardware, install it in various data centers that host the hardware, pool it with other rigs, and handle everyday logistics. increase. This is a practical approach to mining.
But for Abada, it’s all as close to the mining process as possible.
“I’m now dedicated to teaching and helping beginners around the world mine cryptocurrencies in their homes,” he said.