Is Crypto mining worth it in 2022?

With GPU prices falling by an estimated 25-30% in NVidia’s RTX 20/30 series in the last 3 months, and with more people being able to grab that special card they have always wanted, is it now the time for more people to get into the cryptocurrency market? 

For those of you reading this who do not have a mega-bit of an idea of what cryptocurrency is or how it works let me briefly explain what it is. Crypto currency was originally invented back in 2009 when bitcoin came into being and the first bitcoin blockchain was mined. Back then 1 blockchain would have been worth nothing but now 1 bitcoin will make you around £30,000. The way mining works is by using your computer’s graphics processing unit to solve a sophisticated math’s problem. The company who you mine for uses your GPU as an audit device to make sure double transactions do not happen when a person makes a purchase using bitcoin. 

 A real-world example of this would be having 2 credit cards linked to the same account and trying to spend all the money on those cards at the same time to illicitly cheat the bank out of money and gain more items than you could afford. Once the transaction has been confirmed and the hash has been decrypted, the owner of the GPU will be rewarded with a percentage of the block based on the card’s performance. 

The process of bitcoin mining also has another useful method; it helps mint new currency into circulation, because when one block of bit coin is mined it hands out new currency to miners who solve these problems.  

As years go by, the problems become harder to solve as technology evolves. Therefore, computers need top-end hardware to compete with other hardware to make sure they earn the most profit.to get a better understanding of how affordable (or expensive) mining is right now, look at the graph below to see the average performance-to-price of these GPU’s: 

All calculations referenced by Nice Hash mining calculator. 3070/3080 ti not included due to mining limiters from Nvidia. 

As we can see here GPUs are not making nearly as much as they were before the pandemic, but does that really mean you shouldn’t still think about investing in the crypto market? First of all, we shall look at what exactly you need to start your own bitcoin/Ethereum farm and the costs of running it. 

As a gaming GPU, the RTX 3060ti is a strong and sturdy flagship for modern gaming. This carries over into the world of mining too. Boasting an impressive hash rate of 60MH/s and only drawing 200 watts of power on average, it is now wonder why miners are choosing this cost effective and power efficient card. For just a fraction of the price of a RTX 3090 which comes in at around £1,200, the 3060 ti at £300 (MSRP) would serve as a good starting point for the mining novice. Of course, other costs would need to be factored into this such as all other components of the PC. This price is obviously varied from user-to-user however an average mining rig would cost about £300-500 for a base PC to put the card into. A good starting point would be a Dell OptiPlex which comes with 8GB of ram and an i5 CPU, the only thing needing replacing would be the low wattage power supply. A 3060 ti needs at least a 600w power supply unit in order to function, though it may be worth upping this to 750 for the other components. 

Next, we will look at what all miners fear: The electric bill 

A GPU mining operation needs to be left running 24/7 to get maximum profit. It also needs a secure rooted source of power otherwise it risks flushing thousands of pounds worth of equipment down the drain. To find out the costs of the electricity used for this operation I turned to the internet as all good tech journalists do, and prowled reddit for minutes until I found my answer. I got talking to an anonymous user who wanted to be known as Squarespere (I am as confused as you are). “I’ve seen my electricity bill almost quadruple in the time I’ve started” they said. Further adding to this they said, “It’s added an extra £30-40 on top of what I already pay per week.” 

I went on to ask them whether the cost of this outweighed the profits he made, to which they said “Mining is profitable, but not by a lot. I am mining because I know it is more worthwhile to have crypto than complain about my electricity bill. However, I would like to find a way to get either free renewable electricity or find some sort of hosting provider that is cheaper than £120 a month that will deal with power and Internet for me.” 

Square sphere was running 3x RTX 3070’s and 1x 1070’s. A fairly standard small rig but in the price range of around £2,000 with the recent graphics card outage in the last 2 years. 

On average, according to bitcoins own digiconomist energy consumption index, a person running a graphics card mining operation will be drawing 1,544 KW/h. Different companies offer different rates on their prices but to put this into perspective, at a constant 24/7 power draw, that is around £220 a month (the equivalent rate to that of a 5-bedroom house pricewise). This would also be the price for a small mining operation of around 1-3 GPUs. Some crypto caves have 10x the number of GPUs, drawing into the thousands of pounds mark when it comes to electricity. 

If you are lucky enough to be a student living away from home in private accommodation, you might have hit the jackpot when it comes to GPU mining, as properties normally come with all bills included and for a (mostly) reasonable set price. 

So now you know the toll it will have on your balance, the big question remains: 

How do I start mining? 

Firstly, you will want to set up a crypto wallet. This is the first main cause for concern when people think about getting into mining cryptocurrency. The reality is though it is no different than opening a regular online bank account, just under a weirder form of currency. For this we recommend using Coinbase for getting started as it uses offline, geographically separated, storage for 97% of its cryptocurrency storage. This ensures hackers would be unable to steal coins unless they had access to the physical drive, which is locked away. It also is insured so any cryptocurrency lost will be paid back in full if a data breach occurs. 

Setting up the wallet is as simple as pressing the download button on the website and creating an account. 

The next step is to choose the hardware you want to use. As aforementioned, as a minimum an RTX 3060ti should be an ideal place to start. As for hardware there are many mining options to choose from, but our choice is ‘Nice Hash,’ an extremely basic yet effective way to mine. It features SMS account authentication and even has a tool to tell you how effective your graphics card will fare in the current crypto economy. Downloading and installing is simple and linking your account to your wallet is even easier, by simply going to your Coinbase account and clicking ‘add new wallet withdrawal address’ you simply sign into your Coinbase account and now the two accounts are linked, with any money earned being transferred safely to the wallet. 

 To find out more about the trials and tribulations of those who already have or have had a hand in the world of bitcoin and Ethereum mining, I contacted some miners in my local area via a Facebook computing community page. 

I quickly got responses to the post I put up on the page, with a mixed bag of responses from people who had been in the business. 

First up I wanted to know what made people go into bitcoin mining in the first place. Coincidentally, a guy called Callum M. popped up in my DM’s and wanted to share how he first started on the mining software Nice Hash which was talked about earlier. 

He said, “As bad as it sounds Linus Tech Tips did a video on Nice Hash, and I’d been tempted to mine for a while and it seemed like a fairly reputable service.”  

“In terms of profits, they were wild at the beginning and at the high points last year, but since then difficulty has increased a lot and with the increase in electricity prices it’s not very profitable now, but it’s still a mild profit to me and the money spent on energy is doing double duty being invested into BTC and also heating my place.” 

Callum mines on a single RTX 3070 card and says he only mines when his PC is idle from gaming.  

 

Small mining rigs like this one taken from a mining page on Face Book are generating big profits for small-time crypto miners. 

 

When we think of GPU mining, one might often presume it’s a massive operation by a person with tons of cash to blow on 50 GPUs at a time. The reality is that it is becoming increasingly more common for individuals to get into crypto mining as a hobby to dabble their interest in, rather than a vast-cash mission. 

When asked if he had any tips for novices like himself who were just beginning to pique interest in the world of crypto, he said: “try and research for a good overclock and do not push the card too hard, the 3070 has a lot cooler running memory than the 80/90 degrees. In terms of where you store the cash, The only safe wallet is a cold wallet under your own physical control, but that is more of a general crypto tip.” 

Crypto mining can almost have some comparability to the craft beer revolution, in which everyone seems to want to have their own stamp on the world of crypto. With it all being a new and exciting rabbit hole to delve into which is accessible to anybody, it is no wonder that more people are pursuing a crypto lifestyle. 

For some people, crypto mining is like a second job. James W ran a large scale Ethereum mine in Devon and wanted to share his thoughts on his time in crypto. 

 

How, when, and why did you start mining? 

 

“I went into crypto mining back in 2019, firstly ran a single GPU in my gaming pc for Fun.
After a while I increased the output and had 36 GPU’s mining Ethereum, this was all done on the side of my full-time employment. Late 2021, just before the drop in price of ETH and with the upcoming changes to it and increasing costs of living i Maude the decision to cease.
I managed to recover 130% of my hardware costs selling second hand due to the shortages of equipment around the world.” 

Does a mining operation like that come with a lot of problems like hardware and software issues? 

 “I was quite lucky with the hardware, I never had any software issues, I would strip the rigs down once a month for cleaning and every 8 months I would replace the thermal pads and paste to assist in keeping them cool and mining a profit.”

“It did take a hit when the ETH gas fees took effect as this was changing almost every second of the day, so 1 minute it could cost next to nothing to withdraw / transfer, the next it would be something silly.”

“Luckily, it was a cost and not a percentage, so I just let it build up until I wanted to withdraw (usually once a month).” 

 So, for you it was pretty much a straightforward and effortless way to make money? 

“Yes, it was fairly low effort for me. However, I have heard horror stories from some. Some people have to put more work in than others, things do not always go to plan.” 

 

Cryptocurrency is currently booming in popularity in the UK with 6.1% of the population in 2022, now owning a form of cryptocurrency. This is an increase of 103% over the past 4 years when only 1.5M people (about the population of West Virginia) had a foot in the crypto game. Bitcoin mining has seen a surge in the UK in recent years, however it is still a far-cry from the vast mining pools in other countries. According to a recent study on Statista (a well-known, factually correct, statistics website) the USA is among the biggest importers and exporters of cryptocurrency worldwide, with 35.4% of the globe’s mining operations taking place there. 

In other countries Bitcoin mining has seen a surge due to it being an accepted form of currency. Due to the economic sanctions on its country, Russia has adopted Bitcoin to stop the Rubel turning to rubble. It is estimated that currently 11.9% of the population, or roughly 17 million people, currently own crypto there. 

Bitcoin mining has also been used as a political revolt from certain countries crypto mining laws. When China passed a law banning the use of GPU mining in 2021 to combat “fraud and money laundering”. Due to the anonymous nature of Bitcoin, it has become a haven for criminals to exploit as the coin can’t be traced easily, therefore hackers using ransomware attacks on individuals and companies use it as a payment method. For this reason, among others, China banned the bitcoin mining pools and introduced ‘yuan’; a new crypto currency invented by their government which could be abused less easily. By taking away the freedom to invest in different currencies, it forced people who have a bitcoin wallet and money stored to move their mines to neighboring countries such. Kazakhstan was one of these countries, which until recently had relaxed laws on its cryptocurrency.  

As we can see from the examples above, the highs and lows of crypto currency in recent years have many factors ranging from political and economic causes to costs of energy bills in different countries. For the next part let us look at the market prediction for Ethereum and bitcoin, and what experts have to say about it. 

Despite Bitcoin being up by 70% and reaching a high of £55,000 per 1 bitcoin, skeptical experts are predicting a fall over the coming months. Carol Alexander is a professor at the University of Sussex, specializing in finance. She predicts that bitcoin to tank to as low as £8,000 in late 2022, wiping out almost all of the financial increase it gained in the last year and a half. She said in an interview with ‘MSNBC’ “If I were an investor now, I would think about coming out of bitcoin soon because its price will probably crash next year.” She went on to compare this year to 2018 when Bitcoin saw its value plummet from £15,936 to £2,390. Other investing sites claim this will not be the case as cryptocurrencies such as Bitcoin now have significantly more investors than the year of 2018. 

The future of Bitcoin is an uncertain one and can be a rollercoaster ride. In the space of a few weeks, money can be multiplied or wiped out and that’s the risk you take when mining/trading bitcoin.  

Back when Bitcoin first started up all the way back in 2009, it was worth a whopping £0 and did not gain any real monetary value until July 17th of 2010 when it ramped up to a meager 7p. It was not until April 11th of the next year that it eventually hit the £1 mark. Fast forward 3 months from this and the price of bitcoin skyrocketed by 2,960% to £27. By the year 2016 Bitcoin was trading in stocks for £850 a piece. 6 months later they peaked at £16,430 and became a phenomenon in the media. 

With investors, governments and other businesses wanting their own piece of the E-currency market, more and more coins started popping up, which all promised different things. A few of these coins offer(ed) users’ currency for other methods other than mining. For example, solar coins (SLR) gave 1 coin per megawatt of energy generated per hour using only solar electricity. Users have to upload documents to show how much energy they produce and thus are rewarded. More crypto currencies are now using the Solar Coins approach when it comes to promoting eco-friendly mining. Although solar coin is currently trading at £1.70, it could be one of many coins that will pave the way for sustainable future mining. It also helps more people to get into the world of E-commerce who are not as financially able. 

Solar Coin aims to make the world of crypto a more sustainable and pollution-free market. 

With crypto mining currently producing around £40Bn of carbon emissions each year, it is a welcome change to see companies taking a stand against it. The crypto climate committee has put out a petition to shape the way forward with decreasing mining pollution. With 250 signatures from the world’s leading crypto companies, it aims to reduce 100% of all mining emissions by the year 2030.  

Crypto sites are planning to introduce a ‘proof of burn’ which means in future crypto websites will have to provide documentation to show it is a legitimate and eco-friendly site to mine and have other systems like ‘proof of stake’ to back this up. Proof of stake makes users use the coins they have already earned from mining to validate future mining operations. This creates a validator node to validate a transaction which will create a coin from the mining pools block chain. A miners validator node is selected at random and if it is not validated a person will lose some of the coins that they have put in.  

It is the equivalent of trying to come into a foreign country without an entry visa and providing a non-valid excuse as to why they should then be allowed entry.  

This two-step feature, if implemented, will crackdown on emissions from miners running illicit operations that are not eco-friendly powered. 

Although an emission-free crypto future is a long way off from becoming a reality, it is a sigh of relief for those who want to get into crypto but are more concerned about the environment. 

 

When it comes to choosing a cryptocurrency other than the big two (Ethereum/Bitcoin), there are more options than one would originally have thought possible. These other options also come with their own individual benefits much like how the Solar Coin did. Let us look at some of these other options: 

 

  • Polka dot – Currently trading at £12.70 a coin, it offers users the option to choose what pool they mine from which is more efficient for some cards. It also states it is driven by users who can vote on changes to the way it operates. 
  • Ape Coin – Currently trading at £17.67, Ape Coin has seen a rise of +60.95% in the last month. It offers users a unique ecosystem where they can attend events, play games, and buy merchandise with their coins, aside from just being able to transfer it to cash. 
  • Doge Coin – though not worth a lot at just £0.11, Doge Coin is different as it offers users an uncapped limit on how much of the coin they can mine. This is unlike Bitcoin with a limit of 21 million coins. Instead, it has a steady inflation rate of 10,000 coins per block chain. It is a coin that will not see much of a return in the next decade or so but one to just say you got it for the meme. 

 

New crypto coins are popping up on investment sites all the time, with around 100 being created each and every day. The vast majority of these have little or no value but almost 80 currently have a market capitalization of over £1Bn. Sometimes pushing the boat out with a new cryptocurrency that may/may not take off can be exciting. Though for those readers out there who are looking for a safer investment, we would recommend sticking with the top 2.  

When looking to expand into more E-coins in years to come, you should think of looking for an investors’ site to predict what the next big breakthrough will be when it comes to these currencies. Investment sites such as Etoro or Coinbase can help. These sites make it easier to see market fluctuations when it comes to mining and can offer users a safe place to practice investing their hard-earned coin, by practicing with fake coins at first and then using their own coins when they feel they are ready. 

Investing is always a gamble when it comes to any form of currency, but with cryptocurrencies you have already made many gambles to get there in the first place when it comes to costs, commitment, and equipment needed. The hard truth is that even with Bitcoin and Ethereum being stable right now, it is unlikely that they will see another massive surge anytime soon if given the current rate of inflation remains the same. 

 

Like we saw many years ago with Bitcoin and in recent years, Ethereum. Cryptocurrency mining can be a slow process that will burn out your patience and sanity along the way. It has its benefits and also it has drawbacks, like anything in life. It may not be the stable choice to make money but with GPU prices being at a low for the first time since 2019, and with more coins being introduced, now is a not-so-bad time to try it even just to kill a bit of free time. 

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