The first time I heard the term “Bitcoin mining,” I was in a hostel in Seoul where a young Malaysian entrepreneur was telling me how he made most of his money that way.
I was so confused.
You can mine Bitcoin?
With little to go on, my lizard brain pictured my Malaysian friend wearing a miner’s helmet, hacking away at the cavern walls of the internet until little nuggets of Bitcoin fell out.
As I’d come to learn later, Bitcoin mining is a little different from what I initially envisioned. Nobody’s literally drilling into the bedrock of cyberspace – but they are making good money doing it.
So, whether you’re looking for an easy form of side income or are simply curious about the mining phenomenon, you probably have lots of questions about Bitcoin mining. And while I sadly lost contact with my Malaysian hostel buddy, I luckily discovered that someone back home had been mining all along.
My buddy Will is a full-time project manager who’s been mining crypto on his gaming PC for a few years now. He’s earned good money doing it, enjoyed the process, and was happy to enlighten me on his process.
I threw him every possible question a non-miner could have – questions like:
- What exactly is crypto mining?
- How much money can you make doing it?
- Is it easy to start mining from home?
- How does it affect your power bill?
- What tips do you have for beginners?
Here’s what he had to say:
Let’s start with the basics – what is crypto mining?
Oof. Alright, this is a loaded one.
OK, so everything runs off of this main thing called the blockchain. Think of it as a bank ledger, which shows all crypto transactions and accounts that exist.
This ledger keeps growing and growing over time, and in order to validate a transaction with Bitcoin or other crypto, you need to add to this ledger.
So when you’re “mining” bitcoins, what you’re really doing is contributing your computer’s processing power to adding data to the ledger. In effect, you’re turning your computer into a Bitcoin accountant. And as a reward for doing this, you’re automatically given a trickle of Bitcoin.
Now, one of the quirks with Bitcoin is that there is a set amount of bitcoin that could ever be created, (think like physical gold). Plus, as time goes on, and as the ledger gets more and more complicated, it’s going to require more and more processing power to maintain. That’s why you see these giant Bitcoin “farms” in places like China and Iceland:
This crazy photo serves to highlight the two different levels of Bitcoin mining:
- You can become a true, professional “miner” by getting all nitty-gritty and hands-on with the blockchain code.
- You can simply lease your computer power to one of these more hardcore miners in exchange for a little crypto.
Most miners prefer the latter option since it doesn’t require any coding knowledge and you can start “mining” with a single click.
Technically, anyone can borrow computer power from NiceHash [more on this below] – I’m not sure who’s doing it, but I assume it’s mostly big-time miners.
Anyways, I myself am a member of group #2.
I’m just a normal guy, with a normal full-time job, who happens to have a PC powerful enough to mine with.
Here’s a picture of my computer, which I mounted on the wall for space economy at my desk. Note the Nvidia RTX 2080, which is the main source of my mining power. It’s one of the most powerful graphics cards from 2020, so it’s a nice, sharp “pickaxe.”
Again, the cool thing about mining is that it’s way easier than it sounds. You can sign up with a mining service and start earning in minutes, but I’m sure we’ll talk more on that in a bit.
So, why did you start mining crypto?
Over the past few years, I’ve dabbled in mining but never really committed to running it constantly. While watching a Linus Tech Tips Video about six months ago, the host made an offhand comment to the effect of:
“If you have a good GPU and aren’t mining, you’re just letting money slip through your fingers.”
So, I took another look at the options out there, and with some new services available, it was super easy to get back into it.
What are your personal feelings on crypto overall?
I think the premise is really fascinating. I’m not one who’s going to say that Bitcoin is the “future” and that you should drop your life savings into it, but what the core technology of the blockchain unlocks is pretty incredible.
Personally, I think the future of Ethereum is way more interesting than Bitcoin, since instead of just being a token it actually powers services using Smart Contracts (those are a little heavy to talk about here, but there are TONS of great sources talking about their potential).
You can think about Bitcoin as “Gold,” where there is a set amount and its value is simply having an amount of a limited supply. I may upset my Bitcoin-loving friends by saying this, but Bitcoin by itself doesn’t really do anything – it’s just a form of currency.
Ethereum, by contrast, is a network of computers that can actually run software. The more complicated your software is, the more “ether” you need to spend to run it on the network.
In short, while Bitcoin takes banking and stores it in the blockchain, Ethereum lets you put full contracts on the network. For that reason, the latter has more applications and overall potential, so I’m happy to mine it.
How easy is it to start mining?
Well, if you want to learn blockchain code and become a bonafide frontline miner, not easy.
But if you’d prefer to mine by just leasing computer power to the hardcore folks, it’s super easy – like a couple of clicks.
I use a service called NiceHash, which basically scans your computer hardware, chooses the algorithm you’re best suited to mine, then adds your computer to a pool of computer processing power that professional miners can pay to borrow from.
What this means is that I don’t actually get a share of the crypto earned by direct mining, but rather, I’m rewarded crypto by NiceHash for the use of my power. This means a pretty consistent flow of income but admittedly removes some of the excitement of earning more crypto from frontline mining.
NiceHash is free to sign up and pays out in bitcoins – regardless of which crypto you choose to mine. To maximize your profits, you can set NiceHash to automatically assign your computing power to in-demand pools and cryptos using their QuickMiner tool.
When you want to withdraw your bitcoins from NiceHash, you’ll need to transfer it to a Wallet run by a service like Coinbase. Overall, it takes five minutes to get started with NiceHash, and if you don’t see the returns you like, you can just uninstall and walk away with no info shared.
How much money do you make from crypto mining?
Since NiceHash pays out in bitcoin, it varies based on the current value of BTC.
But with my powerful graphics card mining 90% of the time, I’m making between $3 and $6 daily.
That may not sound like much but it adds up – and remember, you can have your computer mining in the background all the time.
As for how much you personally can earn, you can actually check right now by using NiceHash’s Profitability Calculator. NiceHash will read your computer’s specs and give you an estimate of your earnings potential, factoring in the increase to your power bill.
To emphasize just how powerful your computer needs [to be] to make money mining, here’s what happens when I run the Profitability Calculator on my work computer, a top-of-the-line Dell XPS 13 ultrabook. Since the GPU isn’t compatible, NiceHash would run on my CPU – which is fast, but not fast enough:
Does mining affect your power bill?
Slightly, but not as much as you might think. Maybe $1 to $2 extra a month.
With computing, there are two things to think about: power and efficiency. While you could push your GPU to the limit and throw as much power as it can handle at it, you often see minimal gains in terms of Hash rate (basically how fast you’re “mining”).
NiceHash has a tool that can “scan” your card and determine the best efficiency for hash rate to power used. In my case, my Nvidia RTX 2080 could use up to 215W (or more under some peak load conditions), but it’s often running at around 140-145W while mining.
Anyone familiar with PC gaming will know that running your GPU near peak load for sustained periods will warm up a room. So a hidden “cost” of mining is that you’ll have to pay a little extra for A/C in the summer to keep your home office cool.
However, your PC basically becomes a heater in the winter.
What about your computer? Does mining degrade your PC parts?
That’s actually one of the bigger misconceptions about mining.
The belief is that keeping your GPU running all the time while mining is like keeping your car engine revving 24/7. In addition to sucking up more gas, it’s going to wear down your parts much faster.
In reality, mining is much less stressful on a graphics card than playing a game at high settings.
When gaming, you want to squeeze every little ounce of performance out of your GPU – higher voltages lead to higher temperatures, which place more stress on the cooling and power delivery systems.
You can think of it like taking a sports car to the track – it’s built for it, but you’ll be thrashing it around nonetheless.
Mining, by contrast, is like casually driving around town – way less stress on the parts, if any. Mining is typically optimized for efficiency, not performance – meaning lower voltages and temperatures.
What does mining literally look like onscreen?
This is what the miner looks like when it’s actually running:
Each of those green lines is my GPU being rented for a particular task. It completes the “shares” that were assigned, and then gives my power, efficiency, and speed roughly every 30 seconds.
Here’s the NiceHash dashboard itself, with some of my personal stuff blurred out. Again, simpler than you might’ve expected.
Do you mine all the time? Or how do you choose when to mine?
Basically, all the time, unless I’m actually gaming. You can also schedule it to mine at your convenience.
Doesn’t mining slow down your computer?
It does, but depending on what you do for work, you can totally mine while you’re working. I do. By mining with my GPU only (versus GPU and CPU), I can do basically everything on my PC except play games at 95% performance.
If you’re in video editing, graphic design, or other work that’s taxing on the GPU, you’d surely notice a hit to performance – perhaps even to an extent that you couldn’t work and mine simultaneously.
But for just basic word processing, internet, Excel, etc., you’d be fine. An easy way to find out is to just start mining and see how much it affects your computer speeds.
Walk me through a “day in the life” of a miner – what kinds of things do you check on or monitor?
Not much at all, really.
- I might check on my phone to see if it’s running, or if something may have frozen up or crashed on my computer.
- Check the price of Bitcoin to decide if I want to cash out from NiceHash to Coinbase and either take profits out in cash or re-invest in crypto (done on a roughly monthly basis).
- Then start or stop the miner if I want to use my PC for gaming or other heavy tasks.
I’m actually using it right now for some basic work and updating games while mining with no noticeable performance hit. But I’m also not using the CPU for mining (very low returns on this, maybe a couple of cents a day, not worth it for power draw and actual PC performance impact).
Would you buy a new graphics card just for mining?
This is a pretty loaded question. The short answer is no, and for a few reasons:
- There’s still a massive GPU shortage. With the global chip shortage, there are lower numbers of available units that are consistently in extremely high demand due to increased interest in both gaming and mining.
- In addition, Nvidia has introduced a hash rate limiter to deter people from buying their gaming-oriented cards for mining, so you won’t be getting nearly as big of a return as you could if you had gotten one before they added this limiter.
The hash rate could be “cracked” (i.e. circumvented) in the future, but buying an $800 card based on that possibility isn’t the greatest idea.
And remember, that’s even if you can find a new graphics card at MSRP. Unfortunately, scalpers are highly effective at hoarding them to drive prices up. Although they retail for $700, an NVIDIA GeForce RTX 3080 Founders Edition is currently reselling for nearly $1,000 more than that.
That all being said, I think if you were going to buy a new graphics card for gaming anyways, the ability to mine could incentivize you to get a more powerful card.
Speaking of power, what are your thoughts on the growing backlash against the blockchain’s power consumption?
I don’t really have a strong opinion here.
Across the board, we should be looking at ways to push our power grid towards renewable energy sources. I was looking at one of these huge mining farms that was being built, and they were using all solar and wind to power their operation.
Ethereum is going to be switching from a Proof of Work (GPU-heavy process) to Proof of Stake, which will reduce the need for GPUs to be running on the network. With more innovations like this, we’ll be seeing reduced demand for mining operations and reduced power consumption.
What advice would you give to anyone considering mining as an additional source of income?
It depends on the computer hardware you have.
If you have a high-power computer, you might as well give it a try, but if you’re rocking a MacBook or non-gaming laptop, it’s probably not worth your effort.
Again, even though getting started with NiceHash takes like two minutes, you can see how much you could earn even faster than that by simply using their Profitability Calculator.
What do you think the future has in store for mining, and crypto as a whole?
Crypto mining already has a large industry behind it, and I wouldn’t expect that to change. We’ve already seen what’s happened with Bitcoin where individual users could have a chance at successfully mining to now where ASIC miner farms just dominate that coin.
I’d expect that smaller “altcoins” (i.e. cryptos that aren’t Bitcoin) will continue to pop up for specific uses which can allow users to find a way to make some money from their own hardware, but unless you’re looking to build a dedicated mining rig and make a significant investment, it’s not really something that your average PC user will have much interest in.
That being said, if you have the hardware, give it a go!
From a crypto perspective, I don’t think it’s going to go away any time soon, if ever. It has the potential to decentralize almost all types of electronic (or physical) records and more and more uses as time goes on.
I sincerely hope you enjoyed my interview with Will. I certainly learned a lot – here were my key takeaways from our chat:
- Crypto mining isn’t chipping at the walls of cyberspace. Rather, it’s the process of lending your computer’s processing power to sustaining the blockchain – the ledger upon which all crypto transactions are stored and recorded. Lending your CPU or GPU power this way earns you a trickle of free crypto, hence “mining.”
- There are actually two levels of crypto mining. You can dive into the blockchain code yourself for maximum earnings, or lend your computer’s processing power to a “pool” that’s leased to hardcore miners in exchange for Bitcoin. Most folks choose the latter because it’s easy, effortless, and requires no prior knowledge of crypto or blockchain.
- It’s surprisingly easy to mine crypto. With a service like NiceHash, all you really have to do is register, download the desktop app, and click “mine.” It really is that astonishingly simple.
- … But you’ll need a really powerful computer to do it. Even Will’s $1,400 work laptop wasn’t beefy enough to earn even a dime a day mining. His high-end gaming graphics card from 2020 was plenty powerful enough, though.
- If you already have a powerful GPU, crypto mining is basically free money. Will says it’s probably not worth buying a GPU just for mining, given how hard they are to find and the rise in manufacturer hash limits. But, if you already have one or were already planning to buy one for gaming, you might as well start mining!
Featured image: Money Under 30