Curiousity finally got me on ‘mining’ a cryptocurrency. After a bit of research, I figured I’d give it a try. I had to decide on a ‘currency’ – bitcoin was out of the question due to difficulty, but others seemed interesting. Number one on my list was Dogecoin. I’ve heard it pronounced differently, either Do j (almost a sh sound) coin, or dog E coin – which makes more sense to me. Of course, all of this was to happen without spending any money and simply using the equipment I had.
I started with going to www.dogecoin.com and downloading the ‘wallet’ – the software used to store the information on your currency. There are online and offline wallets, the offline wallet is saved on your hard drive. The information on your coins is stored in a specific file attached to the wallet, aptly named wallet.dat, and this is the key point to your fortune. Lose the wallet.dat file and lose all coins. The software will also process all transactions (blocks) of dogecoin to verify all movement, including yours. Essentially you are helping process (or confirm) all transactions, which is what keeps the currency moving. The downside is your wallet needs to ‘sync’ with the network, which will take a little while. In my case almost a full day. But now I had a wallet and could get started with my experiment, and as mentioned, without spending any money on any additional equipment.
Unfortunately, that really didn’t work out very well. For one, being a complete noob, I had to figure out that there are different mining programs based on the different graphic cards. Which also meant I had to figure out that graphic cards (GPU) are typically used, and not your processor (CPU). In that process, I realized I probably have the sh**tiest GPU you can have in a NVDIA GeForce 210.
I tried a website first that promised CPU mining – idigdoge.com; which I accessed on my laptop. That experiment lasted less than a night. I left the laptop running over night and it was shut down the next morning due to overheating. I let the mining program run on my PC instead, and after about two days I had one (1) dogecoin. Ten Dogecoin are worth about a penny. So, not really the best way to go about it.
In fact, it’s much easier and more promising to ‘beg’ (my term) for coins through a ‘faucet’ (official term). Essentially there are websites (like http://freedogecoins.net/) that will give away free Dogecoins to promote the currency. You provide your wallet ID, enter a security code, and *voila* coins appear in your wallet. The amount can be anywhere from 0.01 to 10 dogecoin, with the latter obviously being a much better way of securing coins than CPU mining. These faucets depend on donations to keep handing out free coins, so a lot of them don’t survive for all too long and eventually dry up. Clearly not the way to secure a long-term fortune…
Enter GPU mining. As mentioned, my graphics card, being a NVIDIA, requires cudaminer as a program to ‘mine’. My graphics card is also extremely poor in processing power. Again, the noob in me needed several evenings after work to figure out how to properly configure the program to actually work. I ended up downloading several versions, watching youtube guides, reading blogs and posts, almost giving up and then finding individual tips on different websites and piecing the entire thing together. I’m sure there’s an easy way, but as the quote attributed to Thomas Edison says: “I have not failed. I’ve just found 10,000 ways that won’t work.”.
You also have to decide whether to solo mine or pool mine. Solo mining has far higher rewards, i.e. more coins once you process a block, but the processing requirements and duration until you succeed are so high that it’s not worth it unless you really have processing power. It makes much more sense to join a pool and add your processing power to the collective’s, collecting shares of the mining results. I tried a few different ones to see how’d they’d go, and eventually stuck with dogepool.net. I tried dogepolis.com, but just ended up losing 5 days worth of coins.
Now that I’ve figured out how to make it work, I looked at the way it would work. The processing speed is shown/calculated in hashes per second. The more hashes per second the better. The GeForce 210 chugs away at an astounding 7 kh/s. On a good day, and probably with a lot of encouragement.
But, I got in running and pulled in an amazing ten (10) dogecoins in one day. Effectively I had my own faucet now and could look forward to a penny a day. Of course, my computer is running constantly with the GPU processing away. At 300W (and 18 amps I believe), and electricity costs of approx. 7 cts per kW-hr, this is not exactly a money-making endeavour. Essentially I’m making $3.65 per year, but spending $184 on electricity. Not really convincing so far…
Obviously if the GPU could process MUCH more without a massive increase in electricity consumption maybe we’d be on to something. This would mean purchasing hardware, though – which I didn’t really want to do. If I did, however, a little research revealed the best bang for your buck in the AMD Radeon HD7950. There are faster and better GPUs available, but this one is under $400 and can process up to 600 kh/s. Unfortunately, this GPU is not the easiest to get at sticker price due to its popularity. Power consumption is comparable, if not slightly lower, so the operating costs would be about the same. If I were to apply the 7 kh/s=10 dogecoins to 600 kh/s, it should result in about 850 dogecoins per day, or about 85 cents. That would be $310 a year. So investing $400 in the card and $183p.a. wouldn’t convince me either.
One could assemble a so called mining ‘rig’, but now we’re talking a much higher investment, requiring a dedicated system, i.e. motherboard, power supply, GPU, CPU, etc. It could be assembled fairly easily, but even the cheap version with a single GPU as shown above would run over $1200. I did find a version I liked and if I had the patience this is the version I’d choose.
Obviously there is an argument that the value of dogecoins could explode and then it would all be worth it. But I prefer to remain in current reality.
I’m still curious. So, while continuing to read on GPU mining (and some really cool, but really expensive mining ‘rigs’), I also saw the next push in mining was ASIC (application-specific integrated circuit). Essentially this circuit/chip is designed specifically to mine coins (unlike a GPU which is multi-purpose) and can run much more efficiently at a far lower power consumption. There are, in my opinion, three levels of ASIC mining – single chip (basic), multi-chip (intermediate) and crazy-nuts (multi-massive-chips).
I took a look at the crazy-nuts version first. Why? Because they’re crazy-nuts. They also operate independently; you don’t have to tie it in to an existing computer or operating system. If I wanted to spend EUR5000 (about $6800) or more, this would be the place even though they’re only in a pre-order phase at the moment. We’re talking 50 Mh/s, with 3.3kW operating 24/7. Electricity costs alone would be approx. $2000 a year. First year costs come to approx. $8000 (shipping included). Same comparison as above has this rig mining approx. 72000 dogecoins per day (although an online calculator put the number at 229000). 72000 per day translates to approx. $72 per day, Payback is now 110 days, or about 4 months. Not bad, and if I had $8000 to spare, I’d choose this over GPU mining any day.
And coming back to reality takes me to the simple version. A single ASIC mining chip with a USB connection. The power consumption for this is virtually non-existant. 0.5W on a hot day. The hardware cost on the other hand is anywhere from $75 to $150 depending on whether you buy individual cards or several at the same time. Their processing speed is about 70 kh/s. The math doesn’t work on the return here either, this should pull in approx. 250 coins a day, or 25 cents worth. That’s 600 days for to break even at $150 purchase price. But by this time I’m frustrated with just doing math and wanted an actual experience. So I bought into the dualminer (you could mine either for Litecoin/Dogecoin or Bitcoin), which has a built in program and is essentially plug-and-play.
The set-up was as easy as described, the program worked right away and after entering the pool data, I was up and running. At an exciting pace (when compared to the GPU I have…).
This has me now pulling in about 270 coins per day. Still really pretty weak, but buying more of the individual USB chips is simply too expensive for the limited reward.
Enter the Gridseed 5-chip miner. This is effectively 5 of the chips that are part of the individual USB chip, so the processing speed is five-fold. I could expect 300 kh/s without changes to my hardware. These do require an additional power source – the W aren’t the problem, but they do require 5A. A common 12V 5A adapter (as used with most laptops) will do, though. The cost of a gridseed is about $250-$300, so the equivalent of $50-$60 per chip.
At an expected $1.25 per day, the ROI is about 220 days. Much better than everything except the crazy-nuts solution. I’ve already ordered one for testing, so I hope to have an update in a couple of weeks.