This is a question I’ve been asked a few times and one we had to answer ourselves when we embarked on our own mining operation in 2017. It comes down to a combination of budget, what you want out of it, your balance of immediate return compared to long term gain and your exit strategy.
For us, we considered Bitmain’s Antminer (and ASIC miner) as a way to get Bitcoin directly. They’re hot, juicy and there have been nightmare stories about getting hold of them and getting ripped off, but they pack a punch, with the latest version, the S9 variants, producing up to 14Th/s and costing around £700-£1000 depending on source. Running at about 1600watts, it doesn’t take many to rack up that power bill.
At the time of writing, you’d expect one to produce about 0.235 BTC a year, although this will change as difficulty and the overall network hash rate changes over time. If you do the maths, it’s not going to cover a European power bill at the current market price, about $6700 per BTC, but for many its not about that – yet. By accruing BTC now and gambling on the big price increase many are expecting, that 0.235 BTC could actually be $23,500 a year at a rather ambitious $100,000 and even $235,000 a year if John McAfee gets his way. Of course, you’d have to take the investment cost and ongoing running cost on the nose in the short term, and some may argue it’s easier just to buy a few Satoshi directly with the same money. It’s a fair argument.
In the end, for practical reasons (heat, power, overall network hash rate) we decided to go for GPU mining to give us more versatility. We love Bitcoin, but with an ASIC you’re locked into it forever and we felt that we wanted to mine other coins and algorithms.
So GPU mining it was. Technically, anyone can do this on a micro level up to a very high level, just by adding cards and hardware. As of right now, the 1080tis are considered the best all round cards, and they’re not cheap either at around £750-£950 a pop. Big Blue, our main rig, uses 12 of these monsters and they require 3250 watts of power to run, and a large, well ventilated room. Or a bit of air conditioning. Or both.
The same argument applies. Both GPU and ASIC mining are less profitable than they were in, say, November and December 2017 when the world went mad for crypto. But the logic is the same – accumulate now, if you can afford to, and wait for the oft promised boom. And there’s a very good chance that when the next bull run cycle comes, mining is suddenly going to be much more profitable again, but your costs won’t change. Our rig is still profitable even at the current rate where mining is, arguably, at it’s lowest ebb, but we don’t expect it to be that way forever. We’re still accumulating BTC by mining through pools such as Blazepool, Ahashpool, Zergpool and Zpool, which we have found to be consistently the best over time.
Both ASICs and GPUs will be updated to more powerful tech in time. With ASICs, as soon as the next version is out, your old machine will slip into insignificance and you’ll watch the resale value drop away. With GPU rigs like ours, you can simply upgrade the cards as and when you can afford to. And don’t forget, the 1080ti’s will hold most of their value, even at a year old, as fantastic graphics cards. There is talk of the new gen nVidia tech coming later this year, but it’s all a bit woolly frankly. The alleged specs are great, but the first lot will be phenomenally expensive and hard to get in the channel probably at least until the end of the year. Big Blue has plenty of life left in her yet!
Finally, there are ways to get some skin in the game with no real technical knowledge involved. Companies such as Cybermine allow you to remotely buy and run an Antminer S9 in their racks, providing a full end to end service for a share of the profits and a not-unreasonable set up fee. Some back-of-fag-packet calculations show that for people in high power cost areas, this is actually pretty comparable to running your own operation, except without the heat, noise, maintenance issues and technical knowledge.
There’s many ways to get involved in mining and in many ways it’s easier than ever before. And yes, you could just buy the coins of your choice to invest in, but there’s something magical about being part of this revolution and watching your machine whirr away as it creates money – real spendable money – apparently out of thin air. Somehow, that never gets old.
(note: I am in no way endorsing Cybermine over others, neither am I connected to them or have any financial interest, I just think they seem to do a great job of bringing mining to anyone and everyone. Always do your own research first!)