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Bitcoin Mining. Is it Worth it?
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04-25-2018 : Bitcoin Mining. Is it worth it?
If there is one thing I'm good at, it's not noticing that something is important enough to get involved in until after it's become wildly popular. Usually after it's pretty well done to death. This time I am referring to Bitcoin mining. There are a LOT of various "virtual currencies" out there, all of which fall under the term cryptocurrency. But for the sake of keeping this readable, and since Bitcoin is the only one you've likely heard of, I will refer to what I'm doing here as though Bitcoin were the only one.
TLDR version: If you are only here to read the end result of this project, you can just jump to the end where I list my follow ups... You can save yourself some time.
An amusing thing I feel I have to point out here... If you are reading this on a mobile device, the ads that are coming up are hilarious. I have never seen so much effort put into ads. And they are all for Bitcoin. I run Google Adsense on this site. I do not choose the content. They do, based on the content of the page. You can see that someone is making some CRAZY investments in advertising the very thing I'm discussing here.
With all the talk about cryptocurrencies out there, and there is a lot of it, there must be something to it. But it's such a volatile market in terms of investment, there really is no point in throwing a bunch of money at it, unless you have a lot to lose. In fact, that currently seems to be the advice... "Don't invest any more than you're willing to lose." But I had also heard about mining, and that seemed like a reasonable alternative.
What is cryptocurrency mining?
In very simple terms, it means using a device, like an unused computer that is sitting there idle, and utilize its processing power to do a bunch of math. As a reward for donating your processor time, you get paid in cryptocurrency.
I looked into this once a few months ago. The common word was that the return on Bitcoin mining is SO low that you need ridiculously powerful computers to do the mining, just to offset the cost of the electricity the mining eats up. Just think about how absurd that is... You need machines that are fast, efficient, and powerful so they can mine Bitcoin at any sort of profitable rate - and you need to consider the energy consumption in order for it to work.
In case you're interested, a simple Google search for Bitcoin mining, will usually return a unit like this:
This sort of thing costs about $500, and is nothing more than a very powerful bunch of processors and a big cooling fan.
Those that are serious about mining, use a far more absurd rig that looks like this:
In my view, investing in a rig anything like that, is just like investing your money directly into the thing. Whereas mining rigs like that may pay off handsomely, there is an equal chance that they won't. and you may end up with a very expensive paperweight. Considering this, I started looking for alternatives.
So this is what I found
I started doing research on all the various ways to go about doing the mining. You can use your mobile device, if you happen to have a spare Android sitting around, for instance. I found one app that seems pretty good. But the amount of time you have to spend using it before there is any sort of payout, is completely ridiculous. Like, a week of the thing running straight yielded the equivalent of less than $1.
You can use your browser. Well, they say you can, but the reality is that every single one of those services I checked was a scam. That is, the only way to make anything at all is by referring your friends. It's sort of a pyramid scheme.
I needed something lower level than that. Something with no overhead. Something like those rigs I pointed out before. But WAY smaller. I actually have a Raspberry Pi here in the house. I originally bought it as a learning device. It's a tiny, single board computer that runs Linux. Very powerful for something so small. And it's been sitting here on the network acting as a web server and network bridge... But mostly sitting idle.
Yes. That is the entire thing. Adorable, isn't it?
I started searching around... At great length, and a lot of dead ends, I finally determined the course to follow. Someone out there had already written the code. I just needed to get it running on my Pi. The instructions and all came from the kind folks at NovaSpirit. Too long/didn't read version: I had to download, compile, and start running the miner. I also had to make myself an account on a server that would let me add my new miner to their pool of other miners. We can all work together, and take a cut of the results.
That last process was not so easy either. That was some trial and error. I found bogus sites, bad pools, etc... I also found one that was supposed to be among the most reliable... I ran the miner for 3 days and achieved a great big 0 in results. I finally settled on the pool at m-hash.com.
That one I ran for a day or two, before turning it off and trying a different pool - the one with 3 days and no results. I then went back to m-hash, and found that I had .00004010 Bitcoin sitting there!
A word on that number there. Bitcoins as a monetary unit are REALLY expensive. A single coin is worth $9085.01 at the exact moment that I am typing this. That is not a typo. Considering that is the case, Bitcoins are traded in fractional measurements called "Satoshi" (named after their creator).
1 Satoshi = 0.00000001 Bitcoin
.00004010 Bitcoin = $0.36
Now, that may not seem like a lot of money. Because it's not. But I kicked the miner back on at that server again, and have earned roughly $23 in 24 hours since. That's not a bad return. It's not life changing money by any means. But it at least proves that there may be money to be made doing this. I say, "may be", because this could all prove to be a waste. I could lose my coins, or have them stolen, or the commission on the service costs me more than I make... Hell, one problem I already see is that I cannot cash out less than 0.1 Bitcoin. As per my previous math, that's about $900. I don't know how long it will take to accumulate that amount. If things continue as present, it might be a month or so. I don't know yet. At the time of writing this article, it looks promising, and that's all I can say for sure.
One thing I learned here pretty quickly is that running mining software like this forces the CPU on the Pi to run very hot. Pretty much right at the upper limit of 84°C. So I am purposely telling the miner to run at half speed to keep the thing from possibly getting damaged from its own heat.
Since I know that this article will require some follow-up, after I test a few more things, I will update it with my newer findings. Feel free to check back for updates.
Conclusion: Is it worth it?
Short answer: No.
Long answer: Not really.
There is a chance - albeit a slim one - that mining these coins at the rate of pennies a day could be profitable. It certainly seems to be a waste because the amount being spent in electricity to run the devices is more costly than the return. You kinda can't argue with that math. But there is always the chance that the exchange rate on the coins could spike wildly and stay there. Suddenly the $5 that you mine over the course of a few weeks could become $500.
The way I'm looking at it is, this is more of a learning experience than a get rich quick scheme. So I will leave this miner running for a while, and see what happens.
For your takeaway on this, I do think that listed in this article, is all of the information you need to go about starting up one of those actual get rich quick schemes, if you're up for it. If you have $500 to invest, perhaps buying a mining rig is a good solution. It's better than just buying Bitcoin outright. Considering it will be running for a while, and constantly mining new coin all the while, it seems like a better investment than an outright buy. And if Bitcoin suddenly goes in the crapper, you can always mine a different coin and recoup your investment from that...
Still, the advice stands... Don't invest more than you are willing to lose.
Follow Up Section
First follow up - 04/28/2018: Well this is a silly embarrassment. All this writing about Bitcoin, and how I successfully got mining to work, and I failed to realize that the type of coin I was mining was, in fact, Magi (XMG) and not Bitcoin. Well, I did notice that. But I thought they were more or less the same thing. No. Not even close. Where Bitcoin is worth $9k, a Magi is worth $0.39. That also, is not a typo. The coin is worth roughly 0.00004 what a Bitcoin is worth. With all of the same effort involved in mining. So where I was thinking I was mining $26 a day, it's more like $0.02 a day.
On top of that, Magi is not so freely traded. As of when I'm writing this, I cannot even find a reliable place to cash out the $0.04 that I have.
2nd - 05/01/2018: As of today, I have completed my first transaction, moving coin from the miner to an actual wallet (as they are called). So I found places to put the coins that I have mined.
My final conclusion on this is that mining Bitcoin proper is impossibly inefficient. It just takes too much time and energy for the tiny, tiny amount produced.
XMG is a little more reasonable, in that it doesn't take quite as much effort to get something tangible in return. But it's still terribly inefficient.
I may investigate other coins to mine. But as of right now I feel like I've pushed this project about as far as I care to.
If you enjoyed this article and found any of the information useful... Feel free to donate if have a few .000001 coins to spare.
If I get a single donation from this, it would probably equal more than all the coin I've mined over the course of the past week or so.
4th - 02/10/2019: Still updating this article from time to time. As of now, I've gone through a whole boatload of different kinds of faucets, apps, exchanges, etc... I've landed on a few that are actually legitimate. They pay, and it does not involve ridiculous amounts of work. So I've listed them here.
3rd - 08/05/2018: After a few weeks of working with stuff, I have also found a couple of other ways to continuously make some cryptocoin without a whole lot of trouble. There are a few sites that you can use their "faucet" to collect coin, and you don't have to do anything other than check the site once in a while.
This is something I should have looked into a long time ago. But this is a learning process, right? So this is something new I learned... You can get yourself a wallet that can hold a couple of different kinds of coins. CoinPot is the one I am recommending.
That one holds a few different kinds of coin including Bitcoin and Dogecoin. And you can freely convert them between each other.
Here is another good wallet (arguably the most reliable), and one other miner/faucet site.
This is all totally free! You aren't earning a lot. But if you are interested in learning more about this stuff, it's an excellent starting point.