Pickaxe, video card, bitcoin mine. How to stop being afraid and start mining cryptocurrency
Russia was swept by the trend for cryptocurrency mining: hundreds of young enthusiasts decided to mine cryptocurrency on their home computers, earning several hundred dollars a month using video cards, and swept them off store shelves. Medialeaks talked to Russian miners and tried to understand how to use the situation with cryptocurrency mining to their advantage.
Back in USSR. Shortage of video cards and huge queues
Russian users have recently often begun to look for an answer to the question of why video cards have risen in price so sharply in the country. It is almost impossible to buy them now, even despite the almost doubling of the price: the latest model video cards have literally disappeared from the shelves of both regular and online stores. The latest models of cards from NVIDIA are not for sale either on the official website or from third-party dealers - official suppliers report that the next opportunity to buy a new card, the GTX 1060, 1070 and 1080 models, will appear only in mid-July.
The cards are not being snapped up by gamers chasing the latest piece of technology, but by cryptocurrency miners (“miners”). They use powerful video cards to mine cryptocurrency. Mining is a way of making money by autonomously solving mathematical problems by a computer (or a similar device called a miner): the computer creates many options for solving the problem, one of which turns out to be correct (closes the block). The miner receives a reward for each block closed on his device, and the more blocks he can process, the more his earnings will be - and the speed depends on the power of the device.
Due to the fact that the latest model video cards contain their own powerful processor and large amounts of RAM, they can successfully process blocks, and for this they do not need anything other than basic, and not necessarily equally powerful, computer components. Now, for every miner who dreams of turning a computer into a gold mine, video cards have become something like the pick and shovel necessary for this.
We need more crypto gold. Russian miners - about their systems
To build a farm (as miners call the devices they create for mining, which are often a modified system unit), Russian miners only need powerful video cards and the basic PC parts needed to connect it to the network. The more cards, the greater the profit, but it is almost always measured in hundreds of dollars.
Miners choose different cryptocurrencies for work: in Russia, in most cases, it is not the well-known bitcoin (bitcoin), but ether. The reason is that it is much easier to mine than Bitcoin since it is not such a well-known currency. Mining “crypt” is simple: assemble the farm, set up the connection, register and just make sure that nothing breaks, promptly cleaning the installation from dust. Farms are different - some miners make do with two video cards, others would like to build a farm of ten to fifteen.
I have a self-assembled farm, 4 RX470 cards. There used to be five, but one card recently failed. I earn 3.5 dollars a day from each card on ether. If the rate rises to $400 per ether, I will earn up to five dollars from the Roman card
I assembled a farm of eight cards. This brings in $1,200 a month. I'm just trying to get ether. Konstantin
I currently have two Asus GTX 1070 ROG Strix 08G. My earnings depend on the exchange rate, since what I earn is on the stock exchange. In April I earned 212 dollars, now I earn up to 450. Considering that farms with 10-12 cards are built on the basis of the GTX 1070, my earnings still look frivolous. Bogdan
Miners note that even if one of them decides to expand their farm, this cannot be done in the current conditions: there is too much excitement around video cards, since the concept of cryptocurrency is increasingly gaining momentum in the modern economy.
Bitrubl. How do they view cryptocurrencies in Russia?
Russian authorities continue to oppose the legalization of existing cryptocurrencies, although at the same time S7 Airlines and Alfa-Bank conduct transactions through the blockchain using ether, and our neighbor Japan has legalized Bitcoin. Instead of legalizing already proven virtual money, the Central Bank began to create its own cryptocurrency, the issue and value of which it plans to keep under its own control.
Players in the existing cryptocurrency market do not take the idea of the Central Bank seriously: government regulation of cryptocurrency contradicts its very concept. While officials are only making plans to create electronic money, Russian users are investing in mining existing analogues of Bitcoin. Some are trying to mine the most famous cryptocurrency, but this market has been taken over by the holders of huge farms from China.
Bitcoin monsters. Chinese Bitcoin farms
One of the features of Bitcoin, like many other cryptocurrencies, is that they can be mined by any miner on the network. The system “pays” for the efforts of the miner who is the first to select the necessary combination to close the next block in the network, so the more powerful the miner, the greater the chance of receiving a reward.
In the case of bitcoins, this principle led to a kind of defeat for ordinary network users. Chinese “miners” began to assemble huge farms with many machines that have such enormous combined power that the laptop on which this article is being written next to them looks like a folded paper boat next to a real boat. And your computer too.
The owners of such farms rarely talk about themselves due to security reasons, but one of them, Jin Xin, gave Motherboard journalists a tour of his “workshop”, in which about 3 thousand devices for mining are installed. In 2020, this farm earned up to $1.5 million a month—the Bitcoin rate at that time stood at $360.
At our busiest times, we mined up to a hundred bitcoins per day for each of our six such farms. But as the overall computing power devoted to mining Bitcoin has increased, the complexity of the problems miners must solve has increased—so the numbers have changed. The cost of electricity is also considered an important factor. Our farm consumes about 1250 kWh. We pay 80 thousand dollars a month for electricity, and now we mine 20-25 bitcoins per day on each farm. Jin Xin, Farm Manager
The availability of derivatives for mining has made China a secret mecca for Bitcoin miners. Local developers even create processors and installations specially designed for mining: you just need to plug it into the network and mine. It makes no sense for ordinary Russians to compete with such monsters, so in the Russian Federation they prefer to mine other, less popular cryptocurrencies - for example, ether. But not everyone believes in him.
It is important to separate Bitcoin mining from mining other cryptocurrencies. Yes, in China there are a lot of traditional Bitcoin farms, where Bitcoin is produced on specialized ASIC equipment, so here in Russia, if they mine, then on local devices it comes at a loss, since in China it is cheaper and miner manufacturers are nearby . Novel
I'm currently mining zCash. I'm converting it to Bitcoin. Plus I invest little things in various altcoins to make money on the course. Ether was simply not very interesting to me initially, since the exhaust from it on “green” cards was significantly less than on “red” ones. Now the rate has increased, but there are rumors that Ether mining on GPUs will be closed. Bogdan
No difficulties. Everyday life of Russian miners
According to the miners, maintaining the farm does not require any effort at all, and the costs of its creation pay off with proper care in the shortest possible time. The only fixed costs associated with mining are paying for electricity (miners work uninterruptedly 24/7), but compared to the profits from cryptocurrency mining, this is mere trifle. Moreover, some connect to the network illegally or have other opportunities for “free” connection.
Electrical problem? I don’t see it, the wiring is reliable and holds up. All electricity costs are covered. Stories in the media about such obstacles are all scarecrows. Novel
My electricity is free. Konstantin
Electricity is not a problem at all, even if there are no “free” outlets. Don’t listen to supposedly knowledgeable people who say that farms are running at zero due to energy consumption. Mine spends about 1.5 thousand rubles a month. These are pennies compared to income. Secret? You need to buy cards from NVIDIA. Bogdan
It is difficult to mine alone even on relatively powerful machines, so miners unite in pools - communities in which the power of miners is combined to close blocks faster. The larger the pool, the greater its power, which means the more often it closes blocks and receives a reward, which is evenly distributed among its participants. But the more there are, the less this reward will be.
Despite the profit that mining brings, miners do not always perceive it as a source of main income. Mining does not take much time, so some people combine cryptocurrency mining with work and study.
I have to devote at least two hours to this every day - the fact is that in addition to mining, I do trading (buying and selling cryptocurrencies). If you just mine and don’t work with cryptocurrencies, and if you automate everything, then the farm only requires maintenance once a month, namely, blowing dust off the video cards and cleaning them. Novel
I'm currently studying, combining it with working in the night crew of a restaurant. So I don’t have time to sit and pray for courses. The farm is monitored via TeamViewer. Courses from your phone. I’ll say even more - I sat down for a couple of minutes a day and briefly analyzed it. Profitable? I sold one coin and invested it in another. Unprofitable? I left everything as is. This is a long-term investment, plus the work itself contributes - I don’t earn cryptocurrency on “faucets” for hours, like some people, considering it free money. The farm does it without me. Rates jump up and down (with a tendency to grow), so in principle there is no need to watch them. The only thing you have to do is react to major market shocks. Bogdan
I fell in love with cryptocurrencies, how can I start mining?
1. First, get yourself a powerful miner, or better yet several - it can be either a self-assembled device, in which a powerful video card will play the leading role (it looks like you will have to order it from abroad if you want to start faster), or a ready-made miner — they cost about the same as video cards suitable for mining.
2. Then decide on the currency you are going to mine, its fork (if there are several), and select the pool you want to join (unless, of course, you want to become a lone miner challenging the whole world).
3. Depending on the chosen mining method (video card or processor), select a script program, configure it, and launch it.
4. Don't forget to create your wallet on the fork site you chose. It also needs to be configured by creating an address in it for transferring the received currency, and then entering this data into the account of the pool in which you are mining.
5. You can try to mine currencies and then play with them on cryptocurrency exchanges - this way your income can become less passive and dependent on one network.
Voila - you are a miner and walking on very thin ice related to Russian legislation!
If after reading this article you still don't understand anything because you don't know all these strange terms, start with the Medialeaks Glossary of Neologisms, where we explain what blockchain, ether, cryptocurrency and fork are, as well as other new words whose meaning not everyone understands.
How cryptocurrency is mined: Inside the Icelandic Bitcoin “mine”
Bitcoin is growing right before our eyes. The digital currency is hitting highs not seen since February 2014, rising more than 30% per month. This is great news for Bitcoin “miners”—the people who create new Bitcoins.
The mining or mining infrastructure is the basis of Bitcoin and the contribution of computing power is duly rewarded. This payout makes the process—with the right equipment—incredibly profitable. It helped give birth to a huge and surreal industry.
You can mine Bitcoins at home and many people do. But at the same time, specialized mining companies have emerged, some worth tens of millions of dollars.
These companies build huge data centers or “mines” that consume huge amounts of electricity and perform insane calculations while hunting for digital gold.
Take a look at what one of these companies looks like from the inside.
These photos are of Genesis Mining, a company engaged in "cloud mining" or "cloud mining". This allows customers to use the cloud without having to purchase special hardware.
Technically, Bitcoin mining can be done on almost any computer, but it is usually not profitable unless you have the correct configuration. Many people mine, often creating large pools to improve their chances. But a model like the Genesis is another possible option.
The company initially operated in Bosnia and China, but now most of its capacity is based in Iceland.
This country has three very important qualities for mining: cheap energy, good internet connectivity, and a cold climate.
Climate is an incredibly important factor. After all, mining hardware generates a huge amount of heat and uses a huge amount of energy. If you can save on cooling costs by using natural temperature, it will result in significantly greater profits.
Genesis' power consumption is quite significant. CEO Marco Streng jokes that energy and believes the company could be one of the biggest users of electricity in the country.
According to Streng, based on the price of electricity alone and ignoring all other costs, the cost of mining one bitcoin is about $200. At the same time, one bitcoin currently costs $690.
But there are many other costs, including equipment, production costs and staffing. “I think it's fair to assume that [production] will probably hover around plus or minus 20% from purchase going forward,” Streng says.
According to him, when using cloud mining, there is a big issue of trust. After all, clients never actually see or own the mining hardware components—exposing themselves to the risk of fraud.
At the same time, scammers often use pictures of equipment from other companies.
Genesis mines more than just bitcoins. It has also started mining Ethereum, another type of digital currency that can support decentralized applications and “smart contracts” that execute automatically.
Ethereum is currently priced at $16.70, while electricity costs are $3.85.
Here's another shot from Genesis. More than 10 thousand GPUs in one room.
What are the working conditions like here, are they similar to mining in a mine? Chief Technical Officer Stefan Schindler.
After all, employees are constantly surrounded by computers that constantly hum, and the temperature reaches from 40 to 50 degrees Celsius.