Mining cryptocurrencies with a 3000 € for electricity – Things you Should know

Of the independent cryptocurrency miners who were once an “endangered species,” there is now a huge group of people around the world that we don’t hear much about, except for the problems with the lack of graphics cards.

It is covered by an infinite number of companies, for which mining is a business and they have huge sets, with which the ordinary person can hardly compare. However, the “domestic extraction” of cryptocurrencies has been operating for many years, and in connection with the large rise in cryptocurrencies in recent years, it has also attracted Slovaks.

FonTech.sk talked to the miner Jozef, who has been mining cryptocurrencies since 2017 and sees a great future in digital currencies. In addition to its beginnings or how the bear market has survived since 2018, it has also shown us the profitability that a miner can expect after years.

What will you learn in the interview?

  • How Jozef got to the campaign and what his lineup looks like
  • For what period will the miner return the deposit to the equipment
  • What about energy costs and net profit per unit of cryptocurrency
  • How the bear market has survived since 2018
  • In which cryptocurrencies he sees the greatest potential
  • How he perceives the tightening of regulations and where he sees bitcoin at the end of the year

How did you get into cryptocurrency and when did you start?

I got into the campaign for the first time sometime in the beginning of 2017, when I heard something about the fact that it can be earned by mining. I got to it through a certain internet forum, and it was still the “beginning” when the campaign was not very well known, but it was already talked about. I bought my first graphics card sometime in April 2017.

Personally, I consider myself more of an “occasional” miner, resp. one who doesn’t do it big and takes it more as a hobby. First I bought one card and tested if it actually worked, and later I bought the first mining rig by buying more cards.

What does cryptocurrency mining entail?

First of all, it is necessary to have time for it and to have it with you, so that one can spend that time doing so. It is ideal to know someone who will tell you the whole process of things that you have to do as a beginner, because in this area things change really every moment. Every miner should also have at least basic technical skills, ie the ability to assemble a computer from components, and especially not to be afraid to experiment and tune your assembly according to current trends.

Of course, the price of energy is also important, the cheaper the electricity, the better. In the end, the price of the initial equipment, ie technology that is often expensive, but rather electricity, does not play such a big role.

What does your equipment look like at the moment?

At the moment, I am left with the equipment that I bought in the years 2017 to 2018. I do not currently plan to go to the new hardware, because apart from the lack of time, the mining equipment is currently unavailable and at the same time considerably overpriced. The cards I have from 2018 can still be mined, even though it is no longer as advantageous as it used to be.

Currently I have a total of three rigs of 6 graphics cards. I used to have about 20 cards in total, but some of them left over time. As for the models, I have different sets, as I bought the cards gradually.

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What I don’t buy are, for example, ASIC miners for bitcoin, because from the point of view of such a “domestic” miner, it is a big risk for me. On the one hand, it’s much more expensive, and with graphics cards, there’s also the advantage that, for whatever reason, you can still sell them well.

During what period did the initial “investment” in mining return to you?

Because I didn’t need to sell what I was extracting right away for electricity or the like, I still “hold on” the vast majority of what I was extracting as an investment in the future, so I don’t know exactly the time it took me to get back into technology. . For example, for what I gained a day at the beginning of 2017, I already needed a week at the end of the year, because there was a huge boom then.

If I bought the set, for example, I would have repaid one rig quietly in two months, as in addition to high prices, the difficulty of mining was still relatively low. However, at prices that were half a year later, the return on the “deposit” would be two years.

What about costs? What should be taken into account except energy costs?

Looking at the approximate calculations, for one rig (6 graphics cards) I have a daily cost of about € 3, which is € 90 per month, ie a little more than € 1,000 per rig per year. Electricity for the entire three rigs will thus totally exceed the amount of € 3,000 per year.

How do you choose cryptocurrencies for mining?

I orient myself according to my own surveys, for example through sites like WhatToMine, where you choose your composition and the price of electricity, and the site will literally tell you what to mine, or what pays off the most.

For me, from the beginning, the basis is ethereum, which I still mine. In periods when its price was too low, I also tried something else, such as Callisto Network, Ravencoin or other various so-called “Shitcoins” (popular name for lesser-known cryptocurrencies, editor’s note).

They just flew out then and were a few cents more profitable, but for me it’s also Damocles’ sword – today it’s more profitable, but tomorrow may not be. I then sold other cryptomens to bitcoin or ether.

What is your net profit per unit of cryptocurrency extracted?

If I look at it now, on one card I will say, say, a value of around two euros, but in terms of about 50 cents it goes to electricity, so for one card it costs about € 1.50 profit per day, of course without including the initial investment. to technology.

However, there were times when I went into the red on the same card at the $ 100 ether price (end of 2018), when I put more electricity into it than my earnings were on demand.

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Will mining make sense for “domestic miners” even if the price of cryptocurrencies shoot even higher?

At the time when the boom begins, there is still relatively little mining and the difficulty is not so high, but the price is rising. If you want to sell the extracted cryptocurrencies immediately, then it is the most profitable, because a miner who has purchased equipment before the start of the boom can load a lot “for cheap” and then sell it for high amounts shortly afterwards.

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However, the more the price increases, the more miners enter the market and the difficulty of mining increases, and the percentage of profit gradually decreases, while the price of cards also increases.

At the top, it doesn’t make much sense for the new miner. Although with calculations of the return on investment in technology (graphics cards), the deposit would return to him at, say, within three months, it is almost certain that the price will fall and the payback period can be significantly extended.

Have you also experienced the bear market since 2018, what was it like from the miner’s point of view?

I also benefited further because I had one rig in the hallway and in the winter I “heated” it (laughs), which means that I did not mind zero profit, or a small loss at that time. I know that many miners were shutting down their machines at the time, and with the money they would put in electricity, for example, they bought and kept cryptocurrencies, which could ultimately be a little more profitable.

There were also months when I lost a small amount of money, and I also thought that if it drops a bit, I will turn it off for a while.

What have been the most important milestones in the world of cryptocurrencies so far?

As for etherea, from the beginning I observed the shift of the transition from the Proof of Work (PoW) mechanism to the Proof of Stake (PoS). This will significantly increase the throughput of its network and the maximum number of transactions that can take place at one time, while at the same time significantly reducing the cost of transactions.

The transition was supposed to come originally, I think, already in 2019, but ethereum still works on PoW, which ultimately only prolongs our miners’ ability to mine profitably, because after the transition to PoS it will no longer be advantageous (miner can become a validator that locks a certain amount their coins and thus acquires the right to verify transactions for transaction fees, editor’s note).

The transition to PoS will, of course, be done gradually, while in parallel with the launch of PoS, mining through PoW will be gradually reduced.

So it’s not good news for miners, but if it works and they can even make it, it will be a big milestone for the ethereum as well as for the whole world of cryptocurrencies, because it will move one of the largest cryptocurrencies to a protocol that doesn’t need it. ” burn electricity ’.

In which cryptocurrencies do you see the greatest potential?

My big favorite is of course ethereum. At the same time, however, I think that bitcoin was and will be king for a long time to come, and even if you ask the cryptocurrencies of a person who does not know them, bitcoin will be mentioned first, and only then will other cryptocurrencies appear somewhere far away.

In my opinion, Bitcoin will be considered a good store of value for a long time, but ethereum is good in that it offers something extra, such as the creation of smart contracts, in which I see a great future.

Every cryptocurrency must bring something new for its success, something extra, so that it is not just about porting numbers, but also contains some added value. If you look at the first thirty cryptocurrencies, then except for a few speculative pieces, they are all cryptocurrencies that have something behind them and bring this added value.

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As a miner, did you feel the current situation in the world of cryptocurrencies along with the decline of the hashrate after tough measures in China?

Situations of this type are relatively advantageous for the miner as such. In addition to the hashate decline I’ve seen in etherea, for example, during the recent boom, transaction fees skyrocketed along with prices, paying $ 50 for ethereum, which is, of course, a huge amount from which miners are paid. At that time, after recalculation, the revenues from these fees were already interesting.

For the “domestic” miner, of course, it makes the most sense to mine in pools, where miners distribute the reward among themselves, while the reward for one block is fixed. Currently, this is just under 3 ETH, plus a summary of transaction fees.

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How do you feel about tightening regulations for miners in China?

China is one of the few countries where mining is so widespread and where such measures are relatively easy to enforce and ban very quickly. I can’t imagine anything similar in Europe or the USA, although of course regulators can throw various logs under their feet here as well.

However, I have a feeling that in the USA and possibly in Europe, where not so much is mined so much, because energy is much more expensive here, there is no ambition to cancel mining. Rather, I think regulators will push it into renewables and clean energy.

Where do you see the price of bitcoin and etherea at the end of this year?

I’d rather roll a dice here. When we talk about bitcoin, the realistic price can be, in my opinion, from $ 20,000 to $ 100,000.

Personally, I would like the bitcoin to stabilize around the $ 40,000-50,000, because as soon as it flies up sharply, there is a FOMO effect and the new people who have finally come to the crypt start shopping quickly so that they don’t miss anything, and then after a sharp fall, which always comes after such growth, they are angry and eventually sell it at a loss.

As for etherea, if he manages to successfully switch to the aforementioned Proof of Stake, which will increase the maximum number of transactions and reduce their price, many interesting projects on this network will start to work and its price will go up in proportion to bitcoin, but that’s only my personal view.

What would you say to people who want to start mining?

It is important for the “domestic” miner not to have big eyes and not to think that you will earn an awful lot of it, as well as not to put money into it that you will miss. Of course, it is different to deal with it as a business in a company that deals with it.

I didn’t go all-in and I bought the equipment gradually, but I took it as a hobby from the beginning and invested a lot of my free time in searching, testing and experimenting, gradually finding out what works and what doesn’t. .


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