So You Want to be a Miner, OK but…

Part 1

Mining cryptocurrencies is a very tight margin proposition right now. If you are just starting out or considering building a rig, there are some factors you need to consider before jumping in. You can definitely set yourself up for disaster as soon as you spend your first dollar.
Have a plan ahead of time and do some research, to find out some basic facts before building. Too many people build a miner first because they want to, and research later.

STOP ANY AND ALL THOUGHTS OF BUYING A RIG AND ANSWER THESE QUESTIONS 1ST

What is your electric company charge and what is you $/KWH after the electric company is done adding fees?

• Don’t just look at the published rate, take the total dollars paid in your monthly bill, and divide it by the number of KWH that you used that month.
• The electric company has taxes, fees, and of course the delivery charge that can almost double the cost.

You must know how much you pay for electricity before determining profitability.

What is the electric wiring situation of your home?

• Do you have a circuit that can handle the load of a rig?
• location of an outlet that has electrical capacity in a convenient place that won’t be disruptive to you or other members of the family.
• The best way to shorten your mining life is to aggravate your spouse with unwanted heat and noise or to continuously trip circuit breakers.

Do you have an available circuit?

How do you plan on handling the heat and noise generated by the rig?

• Mining rigs produce a great deal of heat and some noise that must be taken into consideration.
• The rig must be positioned in a way that excess heat can be vented to the outside during the warmer months. It will also produce about as much noise as a box fan.

Do you have enough time to monitor your rig and learn about mining?

• The days of “set it and forget it” are over, in order to remain profitable, you must tend to your rig.
• You must have a system that allows you to monitor your rig at all times. If your rig is on and not mining, that is money lost.

What is profitable to mine?

• A miner must be active in watching the profitability of different projects and being nimble enough to switch quickly when opportunities arise.
• Use www.whattomine.com to calculate the profitability of a coin by plugging in your electricity rate and specific GPUs.

Mining profitability sites help determine potential viability of mining.

What coin do you want to mine with your rig?

• If you have a preferred coin to mine, what is the best mining strategy and can it be a profitable enterprise?
• Is it better to mine the coin directly or better to mine a profitable coin and purchase the coin with the profit.

Can you afford to mine at a loss?

• The cost of the miner is only the beginning of your expenses. Every month you will get a bill that is higher than it had previously been.
• You are essentially trading the money that you pay for electricity for cryptocurrency. Often the price of electricity can be higher than the current value of the coins, can you afford to mine at a loss?
• For how long can you do this before you have to sell coins or shut down rigs.

Do you want to mine and hodl or are you planning on selling as you mine?

• Your financial situation will dictate your plan. Often, in order to maximize profit, a miner will have to hodl for some time before realizing your gains.

You can never know everything about mining without trying it yourself. It is important to do research in advance to assess the viability of home mining for your situation. Do not proceed with mining until you have answered all of the above questions. Most importantly, keep an open mind and be prepared to come to the conclusion that home mining is not a practical option for you.

My next article will explore how to buy and build a rig once you have decided to do so.