Captain’s Log 008 – Mindless vs Mindful Mining

Secondary Warp Field – Achievement

imageHas anyone bothered to take a look at the price of graphics cards lately? An Nvidia GTX 1070 is over $500! I have even seen them as high as $800 at the beginning of 2018. All the GPUs have been snapped up by, well, people like me! I have no shame. From my perspective. Earning passive income has been a small obsession of mine for a while. Some people manage this in the form of collecting royalties from a published book. I know there are folks that do this renting out their houses, but I decided to do it with cryptocurrency. There are many way to earn cryptocurrency, but in this case mining. In this post, I’ll take you on my journey building a mining rig, I’ll share with you some resources and I’ll tell you why I decided to build instead of renting hash power.

Like most people Googling “How to Mine Bitcoin”, I was nuts about the rage of making massive amounts of money! I stumbled across NiceHash [1] and quickly learned that the Nvidia GTX 1060 6GB graphics card in my day to day gaming rig would bring me in roughly $0.50-1.0 USD a day. Wow! That’s pretty awesome. All I had to do was let this thing run and in come the dollar signs. I saw this work over a month earning my first, call it, $50 worth of BTC. Logically I wanted to find a way to do this faster with more hash power and earn more. Here’s a nice graphic of the NiceHash concept. You’re not actually mining. You’re selling hashpower to renters whom in turn mine with your rig and pay for it in Bitcoin.

Image result for nicehash

Even before GPU prices hit all time highs, a GTX 1070 was still pretty expensive; around $3-400. Enter the NiceHash marketplace to order hash power. I had worked it out! Yes! I thought I could actually put in, say $50 in BTC to NiceHash, make an order for hashpower to go mine Ethereum. Then make enough from that to sell the ETH for BTC and end up with more than what I had put in. Mindlessly hoping I’d mine for less and make more. Translated I thought the cycle would repeat endlessly. Great idea if the markets are heading in your direction. Great idea if the difficulty of whatever you’re mining holds steady forever… Great idea if… So, you get the point. I actually tried this and failed. Not to say this is impossible. Mining or buying crypto in the hopes that it will one day increase in price is the mantra of a HODLER.

Here’s why I failed and you might too. The reason is fees and a poor understanding of how I’d actually make money. I spent a lot of time thinking about why I failed to make more money back than I put in, so like a good engineer I made a spreadsheet and went to the math. NiceHash charges a fee to place an order and you pay an amount in BTC per unit of hash per day. Check out my calculator here if you want! The calculator disregards the fees but you’ll get the idea. Usage is pretty simple. Put in the price of bitcoin and the marketplace rate of whatever algorithm on NiceHash you want to use. Then adjust the hashpower limit and amount you want to spend until the duration in hours or days matches what you want. Lastly, use another mining calculator online to determine if what you’re going to mine will net you more than what you paid in BTC. I’ve used whattomine [2] to do this. Remember to ignore electrical cost because as a renter of hashpower you don’t have it.

Keep in mind, this calculator doesn’t account for two things. The first is the fee that NiceHash charges and what I call “slippage”. Slipple is a term I coined referring to the percent of hashpower that either gets rejected by the pool or somehow doesn’t earn you anything. Keyword is somehow. After I made this sheet I learned that there would have to be a perfect storm of market pricing for both the price of the coin and what hashpower is selling for on NiceHash. There are some advantages to this system. If you want a lot of hashpower quickly, then this solution is great. I used it once to mine some siacoin early on and ended up with a boat load of it, which I then used to toy around with.

After all this I decided it was worth getting my own rig and to quit trying to play the “will mining X using rented hashpower make me money?” game. I wanted to build a mining rig but wasn’t quite sure how to do it. After searching for a resource I came across one of the best run blogs and resources for individuals wanting to get into hobby mining, and that is www.1stminingrig.com [3]. The fellow that runs the blog goes by the name Ciprian V, and it is obvious that he actually cares about helping others get in on the action. He is very knowledgeable and gives good advice. I credit his blog with arming me with the knowledge I needed to build my rig. I have built a number of computers in the past, but when it comes to a specialty computer there are extra steps to follow, specifically in the realm of BIOS settings. I saved up a few bucks and settled on a parts list, which I’ve shared below. Personally, I like to use PCPartpicker [4] because it help make sure your parts are compatible.

Here is my build: https://pcpartpicker.com/list/tRCr7W

Rationale for part selection:

  • CPU – You do not need a powerful processor.
  • RAM – Max of 4GB. Barebones memory for Windows to run.
  • Mother Board – Get one with the most PCIe slots you can.
  • Hard Drive – Anything will do. Cheapest SSD you can find.
  • Power Supply – PSU – Two 750 or 850 Watt supplies daisy chained together.
  • Accessories:
    • Risers. Get good ones! – Here’s an example.
    • Multipower Supply Adapter – Here’s an example.
    • External power button. – Here’s an example.
  • GPU – What you get is really up to you or your bank account XD.

For me, I wanted to get the most efficient and the most versatile GPU. I evaluated my NVIDIA and AMD options, and honed in on my choice. While the AMD RX 580 and 480 GPUs are descent for mining, I already had an NVIDIA 1060 6GB in my gaming rig so I knew that I wanted to try and stick with NVIDIA if I could. I was looking to build a 6 GPU mining rig and my first inclination was go get a 6 1080Ti’s. Except those things were going for over $1000 at the time and my budget was about $2000 for GPUs. I kept scaling my choices back and ultimately realized that I could get 4 GPUs at best, and I was eyeing the GTX 1070 and 1080 models. I ran the numbers for hash power and decided I’d be better off with the 1070s.

For performance metrics I went off of Ciprian’s 1stminingrig site. He really has done a ton of leg work getting these numbers together.

Fair warning about profitability. Do not base your entire research off of NiceHash’s profitability calculator. The thing really is a wild guess. True the calculator uses past data, but the markets are so volatile that you have to ask yourself. Is the past going to be any reflection of the future? Probably not.

To tell you why I chose the GTX 1070 over a 1080 was because of the confluence versatility combined with efficiency requirement. You may check profitability of a 1080 vs a 1070 and determine that you may be able to make more income with a 1080 much more readily than a 1070, but you may overlook one important fact. NVIDIA has outfitted the GTX 1700 with GDDR5 and the GTX 1080 with GDDR5X (5X) memory. 5X memory actually hinders the 1080 such that you are really limiting yourself to being the best at mining the Equihash and Lyra2REv2 algorithms. Ethereum, or Ethash, on a 1080 is problematic. A 1070 is better at Ethash mining than a 1080, and per watt more efficient at Equihash than a 1080 too.

The specific GPU I chose was the EVGA GTX 1070 SC Black Edition, Model#08G-P4-5173-KR. I wanted to be able to mine the most algorithms I could since as a hobby miner I wanted the ability to randomly mine that new up and coming coin at will. Of course, my mining rig’s primary purpose would be t reach return on investment and beyond, but I definately devote a little hashpower time to other cryptos. For instance, I heard about Ravencoin a while back. Dropped everything I was doing for a few days to go mine 1000RVN. No idea if that will ever become anything, but I figured why not? Plus it’s insane fun. Not knowing is what makes things interesting!

Building a rig is fun. There will be challenges. Do your homework! I will share one bit of very good advice. Take your time and don’t be in a rush. I destroyed a motherboard and a CPU because I was excited and rushed to build my rig. A mistake that cost me a couple hundred dollars in components. My rig is unique because I built the frame myself out of wood. Can you believe that people sell these things online for $100+?!? I build mine with $15 worth of wood and a few extra screws lying around my home. I made use of this 1stminingrig guide to help me through it. Although, fair warning, I don’t care how many BIOS articles you read get ready to play with it. 😉

Here is what I ended up with. No, I wasn’t going for good looking. Just functional hardware.

I’ve pictured my rig’s case with and without hardware installed. The case is simply a shelf backed with a piece of plywood. I secured all the components with ether velcro or screws strategically placed to hold things down to the wood.

A lot of people use MSI Afterburner but I happen to be using EVGA Precision. Both software allow you to do the same thing, which is tune the GPU’s core and memory clock speeds as well as voltages. I have used it to set all of my GPUs to +150/+500Mhz core and memory clock speeds, respectively. The EVGA 1070 SC Black Edition is already clock around 1784Mhz with its boost clock, and the additional settings bring it up to about 2000 Mhz stable. Believe me, these settings can take some patience and tweaking to get to a setting that doesn’t render the GPU dead afer 5 minutes of mining.

Here are some benchmarks I’ve collected for my rig with baseline settings by algorithm:

  • Neoscrypt – 3.308568 MH/s
  • Lyra2REv2 154.264 MH/s
  • DaggerHashimoto – 104.052 MH/s
  • Equihash – 1,061.98 H/s

With the +150/+500 clock settings by algorithm:

  • Neoscrypt – 3.6545344 MH/s
  • Lyra2REv2 166.396 MH/s
  • DaggerHashimoto – 121.196 MH/s
  • Equihash – 1,360.408 H/s

Here’s the increase in percentage I got for my hours of playing around with settings!

  • Neoscrypt – +10.45%
  • Lyra2REv2 +7.86%
  • DaggerHashimoto – +16.47%
  • Equihash – +28.1%

As you can see, the payoff is small for some algorithms and larger for others. Just learning how to play with GPU settings makes the venture worthwhile!

As of today, I have made about 27% of my initial GPU investment back. That’s $500 out of $1800 I spent on GPUs. Around last December I got my hands on 4 GTX 1070s for about $435 a piece. I intend to make the rest of the full amount back. I’d like to get another two GPUs and increase the rate at which I’m earning, even if it does prolong my return on investment. As of writing, the GPU I bought original is retailing for $550 at NewEgg’s website. That’s still a lot more than I’d rather pay. Hopefully with the slump in the market the prices will continue to drop.

I intend to continue the achievement warp field focus with additional ways to go about earning cryptocurrency. I think mining is the most stereotypical way of doing so, and I want to shed light on others. That is one purpose of CoinTrek, teach cryptocurrency achievement to others, support Ripple, and tackle the hard topics just like  Star Trek has and continues to do! I have removed my gauge from the sidebar. Since I’m not solely about earning a single Bitcoin anymore, I felt having it there was a moot point.

If you feel like helping me out on my journey, or you found this article useful. I would happily take a donation. Ripple and Ethereum are my cryptos of choice and those addresses can be found in the right sidebar.

ETH: 0xe85810d64a28c6ffc2351368beace84992a01e09
BTC: 3JQKyiMReYXHkGb48PvdJgd6wjBsBBKD78

As always. Second Star to the Right!

References:

  1. www.nicehash.com
  2. www.wahttomine.com
  3. www.1stminingrig.com
  4. www.pcpartpicker.com

One thought on “Captain’s Log 008 – Mindless vs Mindful Mining”

  1. Wonderful blog! I found it while surfing around on Yahoo News. Do you have any tips on how to get listed in Yahoo News? I’ve been trying for a while but I never seem to get there! Appreciate it

Leave a Reply

Your email address will not be published. Required fields are marked *