How You Can Still Make Money Mining Cryptocurrency
If you’re a Bitcoin (BTC) mining veteran, sulking over how zillion-dollar, ASIC-based data centers have stolen the spotlight, you’re probably already well into alternative coins. But maybe you’ve scored a cool-new GPU in the Newegg lottery or just happen to have one lying around. Or maybe you’re curious about whether all those hard drives you’ve got in your closet can earn you some cash via Chia. If you’re new to cryptocurrency mining, the good news is that the game isn’t completely over.
We’ll cover how you can get started mining (and in the case of Chia, farming) using hardware you may already have, or in theory can buy at retail, and provide our recent real-life experiences earning some hard cash from GPUs, CPUs, and drives. Note that this is definitely not a guide for devotees who are planning to build custom rigs for mining. It’s for those who are looking to see if they can generate some cash without too much effort, or are just curious about mining, using gear they might already own or can get off-the-shelf.
Bitcoin Mining Is History
Bitcoin mining is dominated by inconceivably huge mining facilities. The largest has over $300,000,000 worth of ASIC-powered computers. So I don’t see any way for mere mortals to participate, although if any of our readers are still making it work for them let us know in the comments. Perhaps fortunately, the “Bitcoin bubble” quickly expanded past BTC.
In particular, there are two coins I find of interest because they have broad support and can be mined with consumer hardware. Ethereum has an algorithm designed to prevent an ASIC from taking over, with the result that GPUs can dominate its production. In a different vein, the newly-released Chia coins rely on what they call plotting and farming, which are dominated by storage requirements. There are plenty of other coins that you can still mine, that on any given day might be a little more or a little less profitable, but these two are a good place to start.
Mining Ethereum (ETH) Using Desktop GPUs
Assuming you have or can find a decent discrete GPU — or ideally, more than one — it’s incredibly easy to get started mining Ethereum. When I first wrote about mining BTC years ago, you needed to have a full node on the network, your own wallet, and probably establish yourself with a mining pool. Now, if you have an account at a cryptocurrency exchange that accepts ETH, like Coinbase, you can just use your wallet address from that account with mining pool software.
Unless you have a large number of GPUs to put to work, you’ll probably still want to join a mining pool. They’ll take a fee, but often that is only 1 percent. In exchange, you get a share of the proceeds from a large number of miners, rather than relying on your own probably meager chance of mining an entire coin on your own.
For my experiment, I joined Nanopool. Well, really there isn’t really any joining, per se. If you use its open-source Nanominer software, you simply give it your wallet address and launch it. There are versions for Windows and Linux, and it supports both AMD and Nvidia GPUs. I found that the CUDA version in particular enabled my RTX 3090 to produce hash rates of around 110Mh/s at full power and 100Mh/s after I throttled it back to keep the memory a little cooler.
My AMD GPUs weren’t competitive until I installed AMD’s custom crypto driver. However, if I was also using the same AMD GPU for gaming or applications, it’d be quite a hassle to switch drivers all the time. As another experiment, I tried mining on my laptop Quadro T2000 GPU. It never managed to get above 3Mh/s, so that was a not-unexpected dead end.
If you’re up for a little more work, then mining applications like Claymore, Ethminer, and Phoenix miner give you more control and increased flexibility in choosing pools and coins to mine. ETHPool and Ethermine are two other, more established pool options. The coins you mine will determine how much GPU memory you need and tends to grow over time. Ideally, an 8GB or larger GPU will give you the most flexibility. One big change is that next year ETH is planning to move to a proof-of-stake method of mining to save energy. If that happens, GPU mining won’t work for Ethereum beyond that point, and you’ll need to switch currencies.
While the invention of ETH helped neutralize the power of multi-millionaire ASIC miners, it didn’t solve another major issue for cryptocurrency. Creating new coins typically required consuming energy. And the more effort that was put into mining, the more energy it took. At the limit, Bitcoin could both consume most of the energy available worldwide, but it could also accelerate climate change, and perhaps hasten the end of life as we know it. Melodramatic, sure, but not impossible. ETH moved compute back to regular GPUs, but it didn’t reduce the power requirement. While Ethereum’s 2022 move to proof of stake will address the issue, another approach has appeared in the meantime.
Tuning Your System for Maximum Results
So far, other than putting a lot of hours on your GPU, we haven’t done anything that might destabilize your system or make it unsuitable for other applications. For a casual miner, that’s probably enough. But there is certainly plenty of room for going further. AMD, for example, offers a (beta) driver suitable for mining but not graphics. And tweaking a GPU’s power and voltage settings can also help improve performance and cooling, as can taking the risk of flashing a custom BIOS. There are plenty of sites to guide you through each of those, but I do advise keeping careful notes on what you change, and understand the possible consequences of each step.
Enter Chia: An Attempt to Make a Sustainable Crypto
The inventors of Chia claim that they wanted to upset the energy-draining apple cart, but creating a crypto-currency that relied on “farmers” (sounds so much more organic than miners) to create plots on disks and leave those disks tied up as farms. Simplistically, if you think of your farm plots as bingo cards, then the more you have the more likely you are to get BINGO! If you could just sign up to get handed bingo cards to park on your hard drives, there wouldn’t be much not to like. Unfortunately, you need to generate your own bingo cards, which takes an impressive amount of disk activity. So, to the owners of the largest, fastest, SSDs go the likely spoils. And if you use a standard consumer drive (or worse, your system drive) there is some real concern that you’ll wear it out.
As a practical matter, the price of XCH has collapsed to the point where for each terabyte dedicated to Chia farming, you can in theory expect about $1 per month. So unless the currency rallies, it’s not exciting for most people. On the bright side, once plots are created, the actual farming takes almost no resources other than the disk space. Currently, there aren’t any secure Chia pool protocols, so you’re on your own. For each 20TB at the current degree of difficulty, you can expect to farm a complete coin (roughly $300 right now) about once per year.
Mining Multiple Currencies
If you’re willing to dedicate the entirety of a machine, you can mine several currencies at once, each using a different resource. For example, it’s easy to plot and farm Chia while mining Ethereum, as one uses some CPU and disk bandwidth while the other uses GPUs. I’ve also found that as long as I don’t need to use a specific application on a GPU, I can easily farm Chia and mine Ethereum in parallel. The one caveat is that the initial plotting process for Chia does take CPU also, so don’t give it too many of your cores if you want to use the computer for other tasks.
So Is Casual Cryptocurrency Mining Worth it?
Not surprisingly, a lot depends on your energy costs. Where I live in Northern California, we have some of the highest electricity rates in the country. So my Nvidia RTX 3090, at around 100Mh/s, might earn around $5 per day mining Ethereum. But it uses about 270-300 watts of power to do it. Over the course of a day, that’s more than $2 in electricity alone. Now, the 3090 isn’t the best power performer, and the chart above shows some better options. But it’s an example that even with hardware you already own, cryptocurrency mining may be more of a fun hobby than a profitable enterprise.
Enthusiasts also express concern about reducing the useful life of your GPU. As long as you don’t let it overheat, and make sure your power system is up to the task, the consensus seems to be that the additional risk is small. Of course, these days if you do fry one, it may be hard to replace it.
Feature image by Jernej Furman/CC BY 2.0