My Cryptocurrency Mining Experience

My Cryptocurrency Mining Experience

Before I started my life as crypto miner, I was just a graduate. I was still thinking my future career and direction of life.

I like freedom, I know that time is more precious than money so I don't want my time to be spent just on working. My parents used to be working all the time and they gave pretty good lessons for me already, hence I don't want to follow their footstep.

I knew cryptocurrency backed in 2012 where Bitcoin (BTC) became hot news due to its vigorous rise and fall at that time. I knew that I can earn some BTC by using CPU to do mining, but I was just an undergraduate so those console and web kinds of stuff are still a little too technical for me, so I didn't persuade it until I graduated. 

I recalled cryptocurrency when I continue Master study. I was going to do research on Artificial Intelligence (AI), more specifically Convolutional Neural Network (CNN). Hence I learned that I can accelerate my research by using GPU computing. So when I did research on GPU computing, I also found that mining is one of the common workloads other than 3D rendering an so on. 

That is when I started getting involved in mining since 2016. (Yes, I am a graduate, I can handle command console!) The mining trend has changed since the last time I heard of it. People started using CPU for mining, then they found that GPU can do the same thing more efficiently due to OpenCL and CUDA parallel computation. Soon after people are not satisfied with the GPU and developed ASIC machine specifically for mining, hence it is hundred or thousand times more efficient than GPU itself. However, it leads to the situation where only a few companies take control of the ASIC manufacturing like Bitmain, locking out CPU and GPU miners whose are more common in the community.

In order to prevent centralization of mining power (which may trigger 51% attack), some new cryptocurrencies had been developed hopefully to ban ASIC and allow CPU or GPU to mine only so that hashing power can be decentralized again. However, there is a problem. Miners also found that solo mining is very slow and risk-taking. More miners online mean less chance to be awarded, hence pool mining appeared so that miners can share their earnings evenly. This leads to centralization of hashing power as well, luckily there are more mining pools than ASIC makers so the blockchain is safer in some sense. Anyhow, back to today, the ASIC-resistant algorithms seemed to be not so resistant after all, the developer has their way to hack on the code.

Ok, end of the brief introduction. Here is my story.

The beginner.

Firstly I tried to mine Litecoin (I still not learned that Scrypt algorithm has ASIC already), using my GTX950 GPU, then I earned few pence in 2 days! I was so disappointed given that I have to pay for electricity more than I earned. Then I learned about ASIC and shifted my attention to other algorithms that are claimed to be ASIC-resistant. There are few algorithms such as Cryptonight (now Cryptonightv7 or CryptonightHeavy, like Monero), DaggerHashimoto (Ethereum), and Equihash (ZCash) that are worth mining with GPU depending on available hardware.

top = GTX 1060, bottom = GTX950

Doing mining means to follow computer tech information as well. Hence I found that my GTX950 is last generation GPU, there are newer Pascal GPU like GTX10 series which are more efficient. Also during 2016, AMD also announced Polaris GPU known as RX400 series GPU. Yay, I got many choices, also no ETH booming yet so no GPU shortages. But I was low on budget, hence I bought a GTX1060 3G for around 230USD. I can't wait to test it out, so I quickly unboxed it and slotted into my PC and compare the speed with GTX950. After my research hours, I just switch my PC into mining mode, that's brilliant!

top = RX470, bottom = GTX1060

Soon I learned that AMD GPU is far more superior in mining ETH, so I bought myself an RX470 GPU as recommended by web users at about the same price as GTX1060. I was so happy that it performed more than I expected after a few BIOS tweaks. Thank you, AMD but sorry, no AI training. A few calculations on earning and expenses showed that the ROI was about a year (assuming the mining trends stay constant and assuming it operates 24/7). I never pushed any PC hardware so hard before but then I realized, it is just a machine! 

A bold decision and the challenges.

At the end of 2016, the payrate is considered very low (around 1 USD/RX470/day), but still, the cash flow remained positive. I saw initial results with my trial investment, the earning curve remain positive, so I was very optimistic about it and decided to invest more aggressively in the 1st quarter of 2017. I ordered 20pcs RX470 GPU from one of the local suppliers. I said that is for internet cafe business to avoid the suppliers from speculation, and they actually believed it. (I am more brilliant than AI lol). Building mining rig requires specialized motherboards, CPU, RAM and so on. 

Then there was an unexpected delay because of Chinese new year, the Ebay seller had their shipment of PCIe risers delayed for a month. I was so frustrated every day because you will never know what will happen tomorrow in the cryptocurrency space, it can make you rich or broke in a snap of fingers (not Thanos but, you get what I mean). It all costed about 5kUSD, don't ask me where was my money comes from, is clean money.

After I received my PCIe riser I quickly set up the rigs, 5 GPUs each so is 4 rigs in total. Stability is a crucial factor too so I decided to install 5 GPUs instead of 6 GPUs per rig. Initial cost will be higher on extra components but it will be beneficial in the long run. 

I stayed in the hostel so I accidentally tripped the circuit breaker, then I found that the MCB is rated only at 16A. I also have few power meters installed in my extension cord and found out that the current draw of each rig can surge up to 5A (yes, 5A 240VAC per rig, on average is 4A), as such I can't run all my rigs. This was my 1st in my lifetime that draw so many power from the main socket (more than power draws of 3 electric kettles) Other than that, I also need to reserve the current capacity for other housemates so I only can run maximum 2 rigs at a time. It was also quite noisy, hence I sealed the gap around the door as much as possible. I already did my best on the software side, there's nothing much I can do to reduce the power usage while maintaining a good hashrates.

An unexpected paycheck

Okay, so it kept running for a while until the unexpected ETH booming, that was around May or June 2017. I can tell you, that was the richest moment in my lifetime, I said moment because it only lasted for 2 weeks before the GPU supply chain went chaos and mining madness, and the decline of the payrate. To be honest, my rig consists of 5 cards so the usual payrate is 9USD/rig, then suddenly in over few nights, the payrate skyrocketed to almost 60USD/rig/day. Yes, that's 12USD/card/day! And guess what, I got 20 cards! So 12*20=240USD/day, yeah just call me CEO! If this trend continues, the ROI (Return On Investment) will be reduced to only a month!

The point is after ETH skyrocketed, the BTC soon followed the footstep. Since I use Nicehash, I sell my hashing power in exchange for BTC, I earned a lot of BTC before the BTC rises. Unfortunately, I sold almost 70% of by BTC for cash in the exchange market so, I only left 30% of BTC for value investment during the BTC booming, what a shame.

During that ETH booming week, the local suppliers ran out of GPU stock in light speed. It was like, you asked for a GPU, then after a few seconds of deep thought, the GPU is gone. Luckily I just upgraded my PC into the true deep learning machine (yeah I earned some money so I afforded to buy some good stuff), it got 4 GTX1080Ti on board (with mining in mind of course) and AMD Threadripper 1920X (shame on Intel). Again, luckily that was done before the ETH booming.

Every high-end GPUs from Nvidia, GTX1080Ti, GTX1080, GTX1070, even the midrange GTX1060, all of them vanished from the shelf. But that's ok, because some people even tried to cross the states looking for AMD RX480, RX470, as well as the cheaper RX460 and RX450. Not to mention the online store, it was crazy! But the worse is yet to come.

So after a few consideration, I decided to fly to Taiwan to look for suppliers there (because I can earn back the flight ticket in a week so, why not?) You know what, The state of Taiwan was more chaos than I imagined, people over Vietnam, HongKong, even the China came to look for GPUs. Since the manufacturers are in Taiwan so they can deliver faster than any other countries. I also heard that some Chinese even used cash of values equivalent to a house to buy 50+pcs GTX1080Ti, that's insane.

The aftermath of mining craze

The supply and demand went imbalanced, causing the GPU price inflated for over 100%. An RX470 can be sold as high as 500USD (previously is 220USD-ish), Ebay is one of the "best" markets you can find, a used RX470 can be sold double its purchase price! Which on Earth are the new electronics capable of that? IPhone? IPad? CPU? Try to tell me. (sometimes RAM did too during RAM price hikes but not as crazy as GPU)

The situation became worse when it was announced that GDDR5 RAM price will inflate thanks to phone industry. So that roughly cover up the whole story of the GPU crisis and RAM inflation.

What's now?

I kept mining, until the payrate dropped day by day, until less than 1USD/card/day today. Yes, it is unsustainable by now because it didn't account for the market price fluctuation yet. I could have to pay for electricity and internet more than what I earned! So this is mining, fluctuation, and change of conditions are the norm of cryptocurrency mining, either adapt to change or die out.

RX470 rigs with 10 GPUs, shut down for good

I already shut down my RX470 rigs a few months ago due to the unsustainable payrate and the rigs are getting more unstable over time. Maintenance is one big problem, How will you be able to do the maintenance if you don't have time? I still need to focus on my research but the rigs keep shutting down or getting unstable hashrates. I got no choice but to shut them down for good.

Luckily, thanks to AMD, they got RX Vega, so do I. It is a beast in Cryptonight mining, now is Cryptonightv7 (why ASIC? why!). It is more energy efficient compared to RX400 cards, oh and is far more stable. Of course, my GTX1080Ti are still profitable but I need to use them for other purposes. I don't go aggressive like before, just wait and see the changes both in crypto market and hardware tech (heard that GTX1180 is a beast, if it runs out of stock again, don't blame me.)