Let’s be honest: mining Bitcoin is not straightforward. If you jumped into this article hoping to find the right ASIC-miner to buy, it won’t be here. If you don’t know what I’m talking about, let’s start in the beginning.
How does one mine Bitcoin? Bitcoin is mined by doing lots of calculations on a computer. Unfortunately, unbeknownst to the creator of Bitcoin, Bitcoin is susceptible to a device called an ASIC, meaning Application Specific Integrated Circuit. This means that from a relatively early point in Bitcoin’s history, it could only be effectively mined by using these specialized devices. Because of this specialist nature and a variety of other factors including the politics of China, mining Bitcoin yourself is out of the question. Mining Bitcoin is simply not profitable (see more reasons here) except for people with mining farms.
This leaves two options: cloud mining and mining other coins and trading into Bitcoin. Cloud mining is risky business and generally not celebrated by the community as they against the decentralized tenets of cryptocurrency. Most people feel that cloud mining is at worst unprofitable and at best, completely fraudulent. Here’s the basic critique of cloud mining: “If I have a magic money-making machine, why would I let you rent it from me at a price less than the amount of money produced?” There’s at least one good argument against this and it’s that contracting out with investors means less risk (since fiat is more stable than crypto), but the question then becomes: less risk for who? It is less risk for the miners to take your money, but it’s not less risk for you. Now you’re out money and waiting on a service to deliver your crypto. What if they don’t? There is little to nothing protecting you. If the ease of cloud mining appeals to you, you may as well just invest in Bitcoin by buying some directly, (we recommend Coinbase).
Mining other alternative cryptocurrencies and then trading into Bitcoin is the only real option. For some, alternative cryptocurrencies are worth holding in their own right. Personally, I discovered the new memecoin, Garlicoin, and have found mining it to be fun. I was around (and am in fact, cited on Wikipedia) when Dogecoin came into existence so there is some financial promise in mining a memecoin. Had I held my 200,000 dogecoin, they would’ve reached a peak value of around $2,000. Not too shabby for what I pulled off just using my CPU.
Why is it a bad time for mining? The best way to mine alternative cryptocurrencies is to build a mining rig using a bunch of graphics cards. However, this is tough to do for a few reasons: 1. Many of us (myself included) are frightened at building a PC from scratch. 2. Graphics card are prohibitively expensive right now due to many people taking up an interest in mining. 3. Building a rig is expensive and it’s not a very useful type of PC. To break even on a mining rig that costs $6,000 will theoretically take as much time as breaking even on a $600 rig (that’s how math works), but practically speaking, who has $6,000 to throw down on an otherwise useless device? Few of us. It’s a bad time to mine paradoxically because it’s profitable. That said, since it is well known at this point that mining is profitable, the price of graphics cards has risen to accommodate the potential value. At least, this may be the case. It all comes down to the wildly swinging prices of crypto.
Disclaimer: Please do not be mad at me if you do not make money doing this. You probably won’t make money mining. I do not encourage anyone to start mining unless they are interested in the process and how it all works. If you are interested in gaining reliable profits from investing, I recommend you look into starting a retirement account or consulting an investment professional. Cryptocurrency is an extremely risky asset that could go to zero tomorrow for almost no reason at all. Before you invest any money into buying crypto, mining hardware, or even spending your precious time on planet Earth researching and understanding all of this, I recommend you visualize your time and money being burned in a fire. To be crystal clear, do not invest more than you can lose and expect to lose all of it. That said, at least you will own some graphics cards or related hardware, which will have some resale value, though chances are if you are selling your mining hardware, so will many people, and hence you can see how buying during a drought means selling during a surplus.
All that out of the way, here’s five solutions that may help you on your way to mining alternative currencies and trading them into Bitcoin, something you can do automatically using Nicehash, by the way.
1. Install a Graphics Card in Your Current Desktop (If you can find one)
If you’re reading this and you’re not on a phone, chances are you already have the requisite machine to host a graphics card. The good news is that installing a graphics card isn’t particularly expensive to have done nor very difficult to do yourself (depending on your PC’s case). The problem with this option, however, is that graphics cards are in extremely short supply, the aforementioned drought. Be sure to check out Amazon for GTX 1060s, 1070s, and 1080s. That said, in recent history, Amazon has had very few of these cards available. Be wary of the prices of cards that are available. A GTX 1060, 1070 and 1080 normally go for around $400, $500 and $600 respectively. The more you pay, the more time for you to get your return on investment.
Here’s some information on how to install a graphics card.
2. Get an External GPU
IF your laptop or desktop has a Thunderbolt 3 port, you can install an external graphics card. These cards work just the same as internal cards and are effortless to install. The Aorus 1070 EGPU is one of the best deals because it’s around $600 and that’s about the price of a GTX 1070, which it includes inside. As a mild disclaimer, in theory, one could find a GTX 1070 for as low as $450, but this is rare given the high demand.
Therefore, this is the easiest way to add a lot of mining power to your setup with minimal technical difficulty. Here’s how you can check to see if you have Thunderbolt 3.
3. Buy a New Desktop With a Graphics Card (or Two)
In terms of return on investment, this option clearly has a serious disadvantage: significantly higher cost. That said, if you happen to be in the market for a new PC, this is a good way to get the graphics card itself at a normal price. You can check out our full article about this topic here, The Top 5 Best Desktops For Mining Cryptocurrency.
4. Install an Additional Graphics Card in Your Desktop (Sometimes possible, but not always)
If you have a large desktop case, you can look into throwing a second graphics card into your machine. For instance, my computer allows for the installation of a second “mini” graphics card. It’s possible that yours allows for a second card or a second mini card; the mini cards are said to perform comparably to the full size cards, perhaps 5% slower or so. In terms of size, they are about half as big and only have one fan. If your PC allows for it, you can install this card fairly easy, but again, you will be faced with the problem of actually acquiring a graphics card at a reasonable price, which is difficult.
Check out the available mini graphics cards here.
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5. CPU Mining Because Why Not (Get started now!)
Mining from your CPU is possible though it isn’t necessarily profitable. In fact, it’s almost certain to be less profitable than just investing money into crypto. For instance, I have an i7-7700K processor, close to the top of the line, maybe about 30% less fast than some of the newer processors. It mines Garlicoin at 30 kilohashes a second. My GTX 1070, however, mines at over 300 kilohashes a second. You don’t need to know what a hash is to know that that’s 10 times faster. Because of this, CPU mining simply isn’t effective. Still, if you want to try it, here’s a guide to doing it with Garlicoin (though you can CPU mine many cryptocurrencies). CPU mining is largely an exercise in “hey, I technically mined,” but as I said before, I mined some Dogecoin successfully with my CPU (though I likely had an integrated graphics card of some sort) so it may be possible to come out on top.
Another reason to CPU-mine is well, if it’s your only option. Some people are extremely hesitant (or unable) to use cryptocurrency exchanges to buy crypto. In this case, taking a loss on profit (due to electricity costs) may be the best way to access obtain any cryptocurrency at all. After all, mined coins appreciate just the same as coins one buys on an exchange; it’s just much harder to accrue a sizable investment. If you’re someone who’s interested, check out this forum post which lists some other coins that may be worth it for CPU mining.
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