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Crypto mining project

Anything related to bitcoin, crypto, blockchain

tigerbalm

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I was struggling to decide whether I should post this in side hustles or execution...or neither because some may view it as gambling. And I'm not sure they'd be wrong.

Anyways at the end of January, I started mining bitcoin. Kind of. I'm actually just selling my hash power on the Nice Hash marketplace and getting paid in bitcoin. Technically not mining.

I bought the hardware to maximize hash power. So I essentially bought the cheapest parts I could find (besides the GPUs) plus 4 x Geforce RTX 3080 GPUs.

I had never built something like this or even a PC before so it was all pretty new to me. Never really looked into mining seriously because people said that the power costs surpassed the reward from mining.

I financed the equipment for 0%, so the monthly payments are about between $400 and $500 total. This includes all components. The revenue generated per month is about $1050, but that is from three cards, the fourth STILL hasn't arrived from China (one month later), but when it does, this will increase to $1400, assuming profitability stays consistent (a MASSIVE assumption, but it's only gone up since I started). So about $900 per month in profit. Actually, about $850 because power costs work out to be about $50 a month. And not actually to be considered profit really since I bought the cards on credit, but you get the idea.

$1400 is current profitability, but I'm planning to hold the BTC, and expect it to hit $100k this year, so everything that is already earned will increase, could be closer to $2k. Could be closer to 0 too if bitcoin tanks, (hence my gambling comment at the start) but as a bull, I'm not expecting that this year, and am thinking that I'll ROI in about 4-5 months, given that the total cost of equipment was around $6k.

One thing to note: I got in at a great time, right before bitcoin took off. I still paid ungodly amounts for the GPUs ($1000, 3x $1350) that typically cost $800 (demand is insane right now). As such doing something similar would be a bit more expensive right now, the GPUs seem to be going for around $2k and prices keep climbing as bitcoin climbs higher. Meaning if you got in, it would be longer to ROI and you'd have more risk.

Just to be clear: I don't really consider this a business, it is basically gambling that bitcoin will continue to increase in value or stay consistent for 5 months , but it is kind of a fun side hustle and hobby. It's the best thing I've been able to come up with for totally passive income (it's basically hands off once you get it set up and stable). But after ROI, hopefully 5 months from now, everything is profit, and if bitcoin tanks, the hardware can still be sold since it's valuable and in demand for gaming PCs.

For those who don't approve of my recklessness, I'm working on an 'actual' business outside of this

Just figured I'd share.
 
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Spino

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Thank you for sharing.
I have been in the crypto sphere for a few years and I think you are on the right track to make some extra money in this bull cycle, which I think will last another 3-4 months.

I am surprised you only pay 50$ for electricity with that type of equipment, it must be very cheap in your area.

Also, I doubt the hash power is used to mine BTC as it is highly ASIC optimized, so, well done in getting paid BTC for that kind of service.

Perhaps keep this thread updated every now and then with what is going on.
 

tigerbalm

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Thank you for sharing.
I have been in the crypto sphere for a few years and I think you are on the right track to make some extra money in this bull cycle, which I think will last another 3-4 months.

I am surprised you only pay 50$ for electricity with that type of equipment, it must be very cheap in your area.

Also, I doubt the hash power is used to mine BTC as it is highly ASIC optimized, so, well done in getting paid BTC for that kind of service.

Perhaps keep this thread updated every now and then with what is going on.

Yep, you're spot on in saying that the hash power is not used used to mine Bitcoin, it's just simply not that profitable. Eth seems to be the most profitable to mine currently, so there is some concern for miners about whether it will be profitable once Eth 2.0 comes out as it is going in the direction of phasing out mining. Some predict the death of mining, while others think that an alt coin will take the place of Eth as a profitable coin to mine.

(Just to be clear when I say miners, I'm referring to people actually mining and those selling their hash power as I am.)

I'm currently working under the assumption that the bull market will continue into late 2021 / early 2022. But I'm pretty much going off the pattern of past Bitcoin halvings. Also assuming that the crash won't be as dire as it was in 2017 due to more institutional money coming in. Expecting a pump up to 100k and a crash to a new low of ~$40k at some point in the next year. But anyone who says that they can accurately predict these things is lying.
 

Space Ghost

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Hi Tigerbalm,

Your enterprise deserves credit. Well done.

You're right about the GPU prices. As soon as there is a demand for anything, the price rockets.

Have you looked into CPU mining? I understand it doesn't require such a high hash rate and there are a number of altcoins that are suited to this. Do a search on the Internet for such mining and the various mining pools.
 
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Rabby

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Sounds like a lot of fun to me. You're basically renting out GPU cycles at (hopefully) a profit. You're doing what the big cloud providers do, just at much smaller scale.

It will be interesting to see if the heavy usage degrades the hardware faster or slower than you can pay it off at this rate. If a GPU fails your revenue goes down, and you might even still be paying for that GPU. On the other hand, if you make all the payments first, your profit increases from that point until the GPU fails or is retired (assuming its performance and power consumption are still in an acceptable range).

I don't know whether it will ultimately be profitable or not. But I don't think it's a non-business. You're supplying something that people want. They want to use GPU cycles, but they don't want to buy the GPUs themselves. It's a pretty straightforward problem and solution... also worth a few points of geek cred :)
 

Speed112

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Over here, over there.
It will be interesting to see if the heavy usage degrades the hardware faster or slower than you can pay it off at this rate.

This is very unlikely. Your average GPU with average use lasts for nearly a decade. I've never had a GPU or CPU fail in 20 years of owning PCs (my older PCs still run doing random low-intensity stuff or were donated to relatives who use them)

With 100% constant load they should still have a lifespan of at least a few years. With an amortization time of a few months to a year them breaking down before breaking even is super bad luck.
 

Ing

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Well done!
My son doe the same as you do! And I m to start , too. Looks like fun!
 
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Rabby

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This is very unlikely. Your average GPU with average use lasts for nearly a decade. I've never had a GPU or CPU fail in 20 years of owning PCs (my older PCs still run doing random low-intensity stuff or were donated to relatives who use them)

With 100% constant load they should still have a lifespan of at least a few years. With an amortization time of a few months to a year them breaking down before breaking even is super bad luck.

That assumes normal usage though. I have some friends who have managed to burn out GPUs, or degrade them significantly, over a much shorter timeline. Heat is an issue, as are custom drivers or overclocking, as is the amount of time and the conditions under which they're being used.
 

tigerbalm

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That assumes normal usage though. I have some friends who have managed to burn out GPUs, or degrade them significantly, over a much shorter timeline. Heat is an issue, as are custom drivers or overclocking, as is the amount of time and the conditions under which they're being used.
Totally. The heat is something that I am worried about, I'm lucky to have natural cooling right now as I'm amidst a Colorado winter, but the summer could be brutal for the hardware. I'm also concerned about how the overclocking will affect resale value of the equipment, if I ever chose to sell it (unlikely).

Anyways, some updates. I'm still profitable, coming up on $2k. The costs in my initial post have been reduced by $1050, I got scammed on eBay for the fourth card, so it is not coming and I got a refund. Massive bummer because I bought that card back when they were cheaper, but now I'd have to pay an extra $1000 for the additional card.

Coming up on the halfway mark for paying off the equipment, so I'm happy so far with this endeavor!
 

AFMKelvin

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Totally. The heat is something that I am worried about, I'm lucky to have natural cooling right now as I'm amidst a Colorado winter, but the summer could be brutal for the hardware. I'm also concerned about how the overclocking will affect resale value of the equipment, if I ever chose to sell it (unlikely).

Anyways, some updates. I'm still profitable, coming up on $2k. The costs in my initial post have been reduced by $1050, I got scammed on eBay for the fourth card, so it is not coming and I got a refund. Massive bummer because I bought that card back when they were cheaper, but now I'd have to pay an extra $1000 for the additional card.

Coming up on the halfway mark for paying off the equipment, so I'm happy so far with this endeavor!
Good job on turning a profit on this also. All this years I've heard that its not profitable. Are you getting paid in dollars or crypto? If in crypto do you cash it out?
 
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tigerbalm

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Good job on turning a profit on this also. All this years I've heard that its not profitable. Are you getting paid in dollars or crypto? If in crypto do you cash it out?
Getting paid in bitcoin. Since I'm bullish on bitcoin I'm not cashing it out, but you can send it from nice hash to coinbase for free, then sell the bitcoin on coinbase. I believe there's a small fee to send it anywhere other than coinbase
 

GPM

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First things first, you need to get off NiceHash asap!!

That is some garbage software that won't pay you for squat compared to mining this directly.

Seeing as you have 3/4 cards in a system, I am going to go out on a limb and say that you have a dedicated rig for doing this, and this is not a system that you use for anything else. I would suggest using a linux based mining OS, and mine Ethereum directly since that is the most profitable for the moment.

Check out Simple Mining OS (SMOS) or HiveOS. I see lots of guys are using Hive, but I have never personally tried it out. I use SMOS and I would be able to walk you through it all. If you do decide to go that way I might be able to give you a code that might give us both a kickback, I am not sure. SMOS costs $2/month per rig to use, and you pay them in crypto so it is super easy to do. You make a bootable USB flash disk and just stick that into the rig and run the software on there. That way you don't need to screw around with windows or hard drives. I have my rig OS on $10 thumb drives.
 

GPM

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One more thing. Do not pay these insane scalper prices for cards. They are asking roughly 4-6 months PROFIT per card just to pay the scalper fee, then after that you still need to pay the card itself off. Do you think this bull run is going to last another 8ish months in order to pay off your scalped fee and start to pay down your card? If so I guess go for it, if not just stay clear of these insane prices.

Once this all crashes back down hardware is going to go on sale big time. 2000 series Nvidia cards are going to be dirt cheap as guys who can finally get 30 series cards are going to sell their old ones. 10 series cards are going to be bonkers cheap at that time as well.

A 1070 was going for ~$100 a year ago, now they are like $400+.
An RX580 was ~100 a year ago, now they are $400+
2070 Super was like $500. Now they are close to $1000.

Expect hardware prices to drop. Accumulate and reap your rewards on the next bull run to come. My 2 cents
 
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The Racing Driver

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First things first, you need to get off NiceHash asap!!

That is some garbage software that won't pay you for squat compared to mining this directly.

Seeing as you have 3/4 cards in a system, I am going to go out on a limb and say that you have a dedicated rig for doing this, and this is not a system that you use for anything else. I would suggest using a linux based mining OS, and mine Ethereum directly since that is the most profitable for the moment.

Check out Simple Mining OS (SMOS) or HiveOS. I see lots of guys are using Hive, but I have never personally tried it out. I use SMOS and I would be able to walk you through it all. If you do decide to go that way I might be able to give you a code that might give us both a kickback, I am not sure. SMOS costs $2/month per rig to use, and you pay them in crypto so it is super easy to do. You make a bootable USB flash disk and just stick that into the rig and run the software on there. That way you don't need to screw around with windows or hard drives. I have my rig OS on $10 thumb drives.


I'm in the process of building a racing sim. I've already built the PC with an RTX2080 graphics card. So instead of letting it sit and do nothing, I'm mining with Nicehash as per recommendation from a friend. I had no idea about other Mining OSs. Thanks for mentioning them!

What are the potential efficiency gains? Does SMOS get a higher hashrate and lower energy consumption?
 

Ing

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Well, other than electricity for free, you ll not get happy with a 20xx .
3080 or 3060ti!
 

GPM

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Well, other than electricity for free, you ll not get happy with a 20xx .
3080 or 3060ti!
What does this even mean? Who cares what the name is, or what generation it is? The only reason to mine is to earn money, or believe in a project you are supporting.

I would buy a GTX980 if I could get it to cash flow. The only reason a 30xx series card is better than a 20xx series card is that it will have a longer term card value for resale, and it hashes harder at lower wattage. However, the 30xx series cards all cost a significant amount more, which makes any benefit they have a moot point.

Mining all boils down to if you can get it to cash flow. I can buy a 1060 right now with a 3 month payout on the card, after all electricity and extra hardware costs. I would do that all day every day. As long as you are not limited by power and physical space, who cares what the card is? If I have the theoretical physical space for 100 cards, and currently have 20 cards, why not fill it with whatever I can? Once you start hitting your hard limit, then you can worry about being picky on what you pick up.

Also, a 30xx series card at scalper prices has like a 9-12 month payout if you are lucky right now. I am still finding the odd 10xx and 20xx series card that I am able to pay off in 3-5 months. That is about as far out as I want to look as this bull run won't last forever. However, if you are able to find 30x series cards at MSRP buy every single one that you can get your hands on!!
 
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Ing

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What does this even mean? Who cares what the name is, or what generation it is? The only reason to mine is to earn money, or believe in a project you are supporting.

I would buy a GTX980 if I could get it to cash flow. The only reason a 30xx series card is better than a 20xx series card is that it will have a longer term card value for resale, and it hashes harder at lower wattage. However, the 30xx series cards all cost a significant amount more, which makes any benefit they have a moot point.

Mining all boils down to if you can get it to cash flow. I can buy a 1060 right now with a 3 month payout on the card, after all electricity and extra hardware costs. I would do that all day every day. As long as you are not limited by power and physical space, who cares what the card is? If I have the theoretical physical space for 100 cards, and currently have 20 cards, why not fill it with whatever I can? Once you start hitting your hard limit, then you can worry about being picky on what you pick up.

Also, a 30xx series card at scalper prices has like a 9-12 month payout if you are lucky right now. I am still finding the odd 10xx and 20xx series card that I am able to pay off in 3-5 months. That is about as far out as I want to look as this bull run won't last forever. However, if you are able to find 30x series cards at MSRP buy every single one that you can get your hands on!!
Thanks! Very helpful.
Bullrun. I m sure, the next bullrun will come in about 2 to 3 years. Collecting in the meantime and selling than.
At present I pay no income tax, when I hold them over a year.
 

tigerbalm

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First things first, you need to get off NiceHash asap!!

That is some garbage software that won't pay you for squat compared to mining this directly.

Seeing as you have 3/4 cards in a system, I am going to go out on a limb and say that you have a dedicated rig for doing this, and this is not a system that you use for anything else. I would suggest using a linux based mining OS, and mine Ethereum directly since that is the most profitable for the moment.

Check out Simple Mining OS (SMOS) or HiveOS. I see lots of guys are using Hive, but I have never personally tried it out. I use SMOS and I would be able to walk you through it all. If you do decide to go that way I might be able to give you a code that might give us both a kickback, I am not sure. SMOS costs $2/month per rig to use, and you pay them in crypto so it is super easy to do. You make a bootable USB flash disk and just stick that into the rig and run the software on there. That way you don't need to screw around with windows or hard drives. I have my rig OS on $10 thumb drives.
Thanks for the advice. I personally think the bull run's going to last until the end of the year, so the cards should at least pay themselves off, at which point even if I break even it will be a fun project. I'm almost 3/5 of the way to paying them off, but totally agree with you about not paying scalper prices right now, I see 3080's approaching $3k which is over twice what I paid for mine.

As for the OS's this is fantastic advice, I started using Windows and every time I'd overlock a card too much, it would crash the whole OS and I would have to manually restart nicehash. I've been using HiveOS with is SO MUCH easier, just set it and go, if anything goes wrong with a card for any reason, the card will restart and the process goes on. Haven't had any issues with cards going down since I dialed in my overclock settings though, it's been going for over a month with no reboots.

I've heard that Eth is more profitable as well, I will look into direct mining. What I had heard is that Nice Hash can be as profitable since it changes algorithms based upon which is the most profitable at the time, but I have not confirmed this and thought that it would be a good starting point. Maybe need to hop on the Eth train while I still can before 2.0 comes out.
 

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