I recently rolled up my sleeves and decided to get my hands dirty by personally participating in the fundamentals of cryptocurrency by deploying my very own mining rig. It was a fun, quick, and easy project and its proceeds – 24/7 generation of fractions of BTC – truly meet the definition of passive income.
Above: Bitmain Antminer S9, EVGA SuperNOVA 1600 G2 power supply, and an old iPad to monitor progress
The most powerful and efficient commercially-available rig out there is the Bitmain Antminer S9, and if you want to use a single power supply unit to power it using a 100-120V outlet, you’ll need an EVGA SuperNOVA 1600 G2 or similar unit. You can monitor you rig’s status via the machine’s IP or by accessing your mining pool’s dashboard, so no external display is necessary. The total cost of my hardware was around $1800, but rig prices fluctuate with the crypto market.
Is It Profitable?
Well, yes, it will be at some point. The upfront costs of a good rig and power supply unit mean that I won’t reach my breakeven point for roughly a year, but it’s all profit from that point on. Of course, one thing I must point out here is that this assumption is based on the current value of Bitcoin! If you believe that BTC will one day be worth far more than it currently is (as I do), you may be reaping profits from virtually the moment you turn your rig on – well, that may be a slight exaggeration but you know what I mean. In addition to the upfront cost, your power bill will increase significantly. The price you pay for your electricity is a big factor in determining profitability – that’s why you can mine a Bitcoin for a little over $500 in Venezuela while it costs nearly $5000 in the US – it’s a good idea to find out what your pay for your power before you jump into mining.
Should I Mine?
Chances are you have considered mining for BTC, BCH, ETH, or any number of currencies. Whether or not it’s the right choice for you depends on a variety of things, including:
- Investment horizon
- Available capital
- Risk tolerance
- Personal market sentiment of the coin your are mining (and cryptos in general)
- Interest (are you a nerd who gets a kick out of this kind of thing? I am!)
- Ability to tolerate a loud and hot unit in your home office (or laundry room, garage, attic, etc)
If you have interest, patience, and a bullish outlook, mining could be for you. Or, you could just buy currencies if you’re looking to accumulate crypto reserves right away. Or, do both! The way I see it, we all keep working even though we have some money in our bank accounts. So why wouldn’t we allow our favorite cryptos to trickle in despite holding larger positions in our wallets?