How I got into mining Ethereum (Part 1)

Photo by Xiang Gao on Unsplash

My first experience with mining was back in 2013. I had a gaming PC with two GPUs and decided to play around with mining Bitcoin. It was just for fun, but I ended up making a few hundred dollars worth, and then promptly sold it all for cash. Or at least I thought I did...

Fast forward to October 2017, and I happened to log in to my Coinbase account to discover that I had left $100 worth of Bitcoin in there. And that my $100 had turned into $800 in the four years it sat there. That's when I decided it was time to explore mining again. This time I decided to put together a proper dedicated mining rig instead of using my gaming PC, so I set out to find a good build and figure out what profitability looked like.

There's a ton of info on the web about mining, but it's not very well organized. It's scattered through various Reddits, forums, and blogs. That being said, the most solid info I found on what hardware to buy was this post: Best Mining Rig Hardware to Mine With: 2017-2018. Based on what I read there, I decided to base my build on six AMD RX 570 cards (I'll get further into the technical details of the rig in a future post).

To estimate the profitability, I used the mining calculator at WhatToMine. There's a bunch of calculators out there, but I like that this one lets you enter what kind of GPUs you have and then estimates your hash rate instead of asking you what your hash rate is (because obviously you don't know what it is before you build your rig).

After running the numbers, my approximate estimates were as follows:

• Total cost for the rig: $2,000
• Electricity cost for first year: $720
• Value of Ethereum mined in first year: ~$4,000

That last number is the trickiest part, because the value of Ethereum is constantly in flux. But all I had to go on was the current price, and at that price, the rig would pay for itself and give me at least $1,000 of profit in the first year. It sounded like a solid investment, so I decided to pull the trigger...

And then the great crypto bull run of November 2017 happened.

Stay tuned and be sure to follow me for the next post!