BITCOIN MINING UPDATE

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BITCOIN MINING UPDATE

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At the beginning of 2021, I got the crypto bug and started investing in Ethereum and Bitcoin through Coinbase where I earned $10 in free Bitcoin when I signed up. My friend introduced me to Bitcoin mining as he has been doing since 2013. He had 8 or 9 mining rigs setup in his house and was making $100 per day. Mining Bitcoin is the process of verifying transactions on the block chain. By mining, you are lending your computer’s processing power to verify these transactions. It is how Bitcoin’s proof of work system operates. Since my friend started mining and investing, he had made over $100,000 on Ethereum and over $40,000 on Bitcoin. I was sold on the idea of mining but the problem was I couldn’t find a computer due to a combination of factors.

External Factors

  1. The Chip Shortage: The shortage in the semi-conductor industry affected all industries that use computer chips. We here about new car shortages everyday, but the same is true for computers and video game consoles.
  2. Bitcoin and other crypto’s were very popular during the early stages of the pandemic. Consumers were buying thousands of gaming computers and video game consoles to mine Bitcoin. Corporations were also using AI or bots to buy up graphic cards as soon as they became available online . Some companies completely pivoted from their original business plan to start mining Bitcoin in warehouses full of mining rigs.
  3. Elon Musk Pumping Bitcoin: Remember that Bitcoin mining friend I mentioned earlier? Coincidentally, Elon Musk announced that Tesla will accept Bitcoin as a form of payment while I was at my friends house. It was the day after I decided to buy a computer for the purpose of mining.

I browsed several avenues for purchasing computers. BestBuy, Wal-Mart, and other local stores were sold out of high performance computers. On Amazon.com and Ebay.com, these computers were listed for over $3,000. I finally found a gaming computer available on NewEgg.com. It wasn’t the best, but it was good enough for an ROI of 1 year or less. I bought a Sky Tech computer with the NVIDIA RTX 3060 graphics card for roughly $1,450 including shipping. The 3070 and 3080 were better graphics cards, but they were either $3,000+ or sold out.

Bitcoin Mining Setup

I quickly registered with NiceHash.com and installed their mining software. From start to finish, the setup was very simple and took no more than 15 minutes. I started mining in February of 2021 with an average earnings of $7.50/day in the month of February. With the ups and downs of crypto and the instability of miners on the network, my daily earnings ranged from $3 to $6. This is after the cost of electricity. With the computer working hard, it uses quite a bit of electricity. NiceHash.com makes it easy to calculate your net earnings because they offer a utility calculator. Simply look at your electric bill to see how much you pay in kw/hr, then enter it in NiceHash to get your net earnings.

Mining crypto uses a great deal of processing power. It can overheat your computer and wear out parts prematurely. It is never recommended to mine crypto on your personal everyday computer. That is why I purchased a dedicated miner. I also downloaded free software that allows me to place limits on the processing power and temperatures of my computer. To keep my computer alive and well for a few years, I purposely placed these limits which in turn reduced my earning potential.

Was It Worth The Effort?

To date, I have made $1,373,77 on my initial $1,450 investment. It took 9 months to get to this point and I expect to break even by Thanksgiving next month. On a bi-weekly basis, I transfer Bitcoin from my NiceHash.com wallet to my BlockFi account to earn 4.5% interest on my Bitcoin. Interested? Get up to $250 when you start trading with BlockFi here. In the end, I think buying a new gaming computer for the purpose of Bitcoin mining was worth it. It is a great way to make a passive income of $1,500+ per year per computer. One mining rig can pay for your annual car insurance premium or your total phone and internet bills for the year. You can even choose to enjoy online streaming services for free if you use your passive income mining earnings to pay for subscriptions.

Note: Using your work IBM or Dell computer, Macbook, iMac, or old desktop will likely not earn you money mining Bitcoin. You will lose money in electricity bills. You need a high performance gaming computer with a powerful GPU and CPU to actually make money in mining crypto.

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Hyder A.

Hyder is the engineer and blogger behind Finance Throttle, a blog that helps you accelerate your net worth through personal finance. With a Master’s degree and 10+ years of experience in manufacturing, Hyder is well versed in the topics of engineering economics and financial studies helping him to invest in equipment and reduce manufacturing costs. Hyder is passionate about cars and earning money as he bought a Porsche at 21, became a landlord at 24, and paid off $40,000 in student loans at 25. Along with his wife, they are currently on track in paying off their $282,000 mortgage by 2026 (Only 7 years!)

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