I want to speak a little about how I got into mining crypto currency and how things evolved. Perhaps the people who read this can learn a little about the why I chose to enter the mining world and maybe some of you on the fence will get some insight from this.
It’s important for me to note that while we do have quite a sizable network in terms of hash rate, we are still beginners in this world. We make mistakes frequently and try to learn from them as best we can. Documentation has been a large part of that learning experience so that we can avoid potential disasters in the future. By no means should my advice be taken as law. Do your own research. We’re still making mistakes every day and we do not want to encourage others to follow in our footsteps without doing their due diligence.
Cryptocurrency for me was the light at the end of a very dark tunnel. I grew up with parents that questioned everything and so for me, the financial system was a big target for a lot of my questions. I won’t bore you with the tinfoil hat conspiracy theories that many have, but sufficed to say I don’t think putting my life in the hands of a fiat system is beneficial. There’s just too much risk in it for me.
I was in metals for a long time as a hedge. Once gold EFT’s started kicking around I saw the writing on the wall. Perhaps I was a little late to that party, but gold and silver helped me avoid the fiat inflation trap the rest of my friends either didn’t care or didn’t know about. Bitcoin was early in those days and I have to admit to you that my early adoption of it was brief. I sold a fair chunk of coins for literally nothing. Something I kick myself today for. We live and we learn.
There were three key moments in my life where I seriously contemplated getting into mining. With each one of them something more pressing developed, or I talked myself out of it. I was working on three other businesses and it seemed like yet another one added to the pile was distraction I didn’t need. Looking back, I often thought about the money I’d have today if I had just smartened up and pulled the trigger. Three entry point. Three failures to deploy. Three fortunes lost. Well four if you count the Bitcoin.
Then one-day fishing with my father we were discussing the financial challenges older generations are having and will continue to have in the years to come. We discussed what might happen if interest rates started pumping to great depression levels and if pensions would be around when I wanted to collect one. I explained to him how it was funny, that if we were early adopters of cryptocurrency, we would like be saved.
Throughout the day we discussed different forces at work that cause this world of debt and inflation, and talked about how a digital currency would fare in the face of pressure from the established financial world. And then it hit me; It doesn’t matter. I was caught up in the idea that the blockchain could make people rich. That somehow it was an investment tied directly to fiat currency. It suddenly hit me that I was all wrong and I had a strong realization that I was lucky I had not gone down the path of mining or investing. Yet.
What dawned on me was that the blockchain IS value. That it should not be judged by the fiat offerings for it. The problems we have in our debt based financial system are inherent in its design. There is no other way for this to go but down. But blockchain technology fundamentally answers that problem. No longer can central powers inflate or deflate. No longer could the printing press provide bailouts and quantitative easing.
And with that I understood that the right time to get into mining was that day. That I was ready for this now. You might think my reasons for doing so are stupid but I felt an obligation to contribute to the verification of the blockchain. I had the resources and enough technical know-how to at least try and not doing so would have eaten at me for the rest of my life. Getting rich off it was not the primary objective. It was peaceful protest against a financial system that is the root of almost all suffering experienced on this planet. I had to be a part of this revolution.
And so with that our first orders of video cards were shipped from our distributor and the adventure began. How do we rack these? How much power? Holy shit that’s hot, how do we get this heat out of here? After a few months, the 200a panel started to look pretty small. We battled hot spots, power supply failures and density problems. Figuring out what risers work where, what software works best, coding automation and finally profit switching algorithms.
All in all, the experience has been one of great pleasure. I am often asked by friends and family if I would recommend them getting into mining and I typically tell them they’re better off investing long term. I heard that a lot when I was first getting into things and always thought it was some sort of ploy to deter new hash rate from entering the market. Now that I’ve done it, I’ll say this:
Mining is a job. It is not a set and forget project that runs in the background of your life. It’s like a puppy. And like puppy’s, they don’t work on your schedule. They demand your attention regardless of whether it’s convenient for you or not. You have to learn to raise the puppy, train it and feed it. The puppy will need to go to the vet when it gets sick. Mining farms are a little like that.
Mining rigs require your attention not because they get sick or pee on the floor, but because you are forcing consumer hardware to run at 100% of its capabilities 24/7. For every rig you add to your farm you are burning more and more wattage, producing exponentially more heat and you will have to figure out how to get rid of it. Components will fail, power supply’s will go up in smoke and video card fans will die. The bigger your rig count, the more frequently this will happen. And then there’s the chance the whole thing falls apart and you’re left with hardware and worthless coins. You’ll spend your free time reading crypto news, checking markets and filtering the FUD. You’ll learn very quickly that the sky is ALWAYS falling somewhere. So, when it comes to the question “should I get into mining” the answer is, it depends.
Do you have the skill/learning ability? Do you have the time to manage this? Or would you rather take that money and roll it into the crypto casino? It’s your call. I support any decision you make as long as you know the risks involved. In order to get into crypto currency in the first place you have to be 100% at peace with the thought of having your entire portfolio and/or validity of your hardware wiped at any moment. Just look what happened to bitcoin and whats happened with the release of the L3 asics for litecoin. It’s a continual arms race to the top that gets further and further way by the day. We all take a risk in the search of rewards.
I would also then encourage people to decide very early if they want this to be a business. To make real money in crypto requires significant capital. You don’t need to do it all on your first day, but it’s important to make a clear plan if this is a hobby or a business. It changes the picture significantly. The power and cooling requirements for 2 mining rigs is significantly different than 500. Distribution systems are expensive, cooling is tricky and you’ll be on a first name basis with the RMA departments of many companies in a hurry.
To someone interested in mining I would encourage them to invest a little in crypto first to get to experience the temperature of the bath before jumping in. Spend a month or two reading and getting involved. Throw a few bucks into bitcoin and experience the market. Make sure this is right for you. If at that point you have a handle on things and are willing to take the leap of faith, then I absolutely without question support the idea of getting into mining. Start small just like your initial crypto investment. Get up to speed on GPU and ASIC mining. Start identifying your mining strategy be it profit swapping, stable growth or rolling the dice at new unlisted coins.
But be careful. Once you take this pill you cannot go back. If you are like me it will go from a hobby to an obsession.
Welcome to addiction and good luck whatever path you chose.
Great article. I've actually been checking out the climate to see if mining is viable for me.
Unfortunately I live in an area with a pretty high electricity rate...and while I did work out a deal to get it reduced, it's pretty difficult with all of the GPUs and ASICs sold and/or overpriced.
very nice article thanks
Mining is more about patience than anything. Maximizing profits takes nerves of steel. It's easy to sell right away, but sitting on your stash and selling when the market is going up is where the real profits come from.