Thursday, April 4, 2013

Bitcoin Breaks $100, Litecoin Rising As Well

A little known fact is that I started mining Bitcoins back in June of 2011 -- right around the height of the initial Bitcoin bubble. I had some spare hardware handy, read an article, and decided to give it a shot. After mining a couple coins in a couple days and selling them for over $20 each, I did some math and figured as long as the price stayed above $3 or so and difficulty wasn't too high, I could make a bit of extra money with Bitcoin.

My initial set of hardware allowed me to hit roughly 2000 MHash/sec, which was good for over 1 BTC per day. As the price came crashing down, eventually bottoming out at just under $2, many people quit Bitcoin and so with an improved 2500 Mhash/sec and an electricity cost of about $125 per month for the PCs I was mining with, I started seeing as many as 4-5 BTC mined per day. At $2 I was right around the break even point, and other than a week or two I kept mining. Sadly (for me), I kept selling the coins to pay for power and other bills, and I lost 80 BTC with the Bitcoinica disaster.

Last January, I watched the price go from $3 or so back into the $10+ range and suddenly I was clearly making a profit again. Hindsight is always 20/20, but I sure wish I had hoarded a few coins, because in the past two months BTC went from $20 to the current price of $135! Over the nearly two years I've been toying with Bitcoin, I figure I've mined in the neighborhood of 800 coins (primarily with the Deepbit.net mining pool, if you're wondering). Had I saved those coins rather than selling, I could have paid off all my debt and half of my house today!

So why this post, and why now? With custom ASICs coming online and the mining reward halving late last year, Bitcoin mining is becoming increasingly questionable on GPUs, and CPUs are totally out of the equation. But there are alternate cryptocurrencies, like Litecoin. Due to differences in the cryptography algorithms backing the currencies, ASICs aren't likely to touch Litecoin for a while, and it was designed to actually be more CPU mining friendly. So, now I've decided that while my high-end Bitcoin mining GPUs will continue in that realm for now, I'm going to see about mining some Litecoins with the lower end GPUs as well as my various CPUs.
What does that get me? At the current difficulty, a single quad-core Intel processor will manage somewhere in the neighborhood of 50 KHash/sec. That may not seem like much, but do a quick run over the LitecoinMiningCalculator.com and look at the reward estimates. A single CPU mining at 50 KHash/sec will get you nearly 10 LTC per month. With Litecoin now trading at over $4.00, that's $40 per month of potential income, with one of the worst ways of mining for LTC. (Doing Bitcoin, that same CPU would only manage about 15 MHash/sec, with a potential monthly income of around $5.)

Where does all this take me? First, I've started mining LTC now at around 500 KHash/sec, which means potential earnings of $400 or more per month. Second, my Bitcoin mining is now making me around $1100 per month, and currently rising. So, while I might sell a few coins here and there, my plan is to only sell enough to pay for power if needed, and just keep all the LTC and BTC I mine for the foreseeable future.

I thought a year ago that Bitcoin would never reach $20 again, let alone $50 or $100. Now, with the massive increase in public awareness over the past couple of weeks I'm thinking $1000 might not be all that crazy -- and that's a tame estimate compared to the bulls over on Bitcoin.org forums talking about $10K and more for a single Bitcoin! Meanwhile, I can see Litecoin potentially following a similar path, and even if it remains valued at 1/25 of Bitcoin it's actually currently more profitable to mine LTC with the prices we're seeing.

If you'd like to know more, or if you're a friend who lives nearby and would like to give Litecoin or Bitcoin mining a shot, I'd be happy to build you a potent mining rig. I talked with a friend last night about this and ran some numbers, and I figure $2000 for a system that could mine at around 1500-1600 KHash/sec (or MHash/sec if you do Bitcoin) is entirely possible. I think BTC mining is set to get even more difficult as more people start doing it, plus all the ASICs, so Litecoin looks to be the better long-term proposition. That $2000 PC would end up mining roughly 300LTC in the first month, which would be $1200. In less than two months it would pay for all the high-end hardware inside, at which point everything else is profit! (Bitcoin would be more like $500 per month, and less if/when the difficulty goes up.)

Okay, there's a TON of terms and phrases used above that I didn't bother to explain, but let's end this simply: cryptocurrencies have serious potential to outperform gold and silver, so long as we have the Internet. If you want help setting something up, drop me a note and I'll be happy to provide some input. I'll even accept payment in LTC if you want a "no risk" proposition! My plan is to have well over 1000LTC stored up by the end of the year, and if all goes well at some point down the road I'll have several thousand LTC that are each worth the $135+ Bitcoin is currently valued at.

I missed out on stockpiling BTC because I was too timid, but I'm not going to make the same mistake with LTC! So come join the fun, and if you find this useful then please donate to one of the following addresses:

BTC: 1JSrAuxPUhD2rS6yYLiPPT6X8fvz7c7k1W
LTC: LXpEZcNJtikd263z7Ha3vrdYDcLU7hiKWv

15 comments:

  1. Hi Jarred, question:

    I'm in the process of building my LTC rig (entering the race a little behind, but still optimistic!) with 4 GPU's, and it appears from what I'm reading that i can also simultaneously mine on said rig via the CPU.

    So far my components are:
    MB+CPU: Asrock 970 Extreme3, AMD Sempron 145
    PSU's: SeaSonic Platinum SS-860XP2 (quantity 2)
    GPU's: MSI Radeon R9 290 (quantity 4)
    RAM: 8GB 1600MHz

    Is there any merit to setting up my rig with more CPU power (multiple CPU's, matching MB, or just a faster CPU) to increase my hash rate? Or would it not be cost effective? Ignorant question? Please enlighten, thanks in advance.

    ReplyDelete
    Replies
    1. Right now, there are a few CPU mining coins still around that can generate a reasonable return. Sempron will be pretty much useless for CPU mining, whereas i5-4670K can do around 700KHash on Quark-based coins and maybe 225KHash on X11. Fairquark or something similar might be worthwhile, and my personal opinion is that it's never bad to have a bit of extra CPU performance around -- it can come in handy on occasion. You might be able to generate $1-$4 per day of profit, depending on the coin, so in a few months you could pay for the $100 difference between the Sempron and an FX-8320. That's what my next rig will probably use (mostly because I like the AM3+ motherboards with four or more x16 slots!)

      CPU: tinyurl.com/amazon-fx8320
      Mobo: tinyurl.com/amazon-am3plus

      Delete
    2. Thanks for the prompt response Jarred, much appreciated. A faster CPU sounds like a sound investment to me, considering I might have my rig up and running for at least a few years to come.

      Question: what does it matter that the motherboard's slots are all x16 slots...will I have slower hash rates with "slower" slots, i.e. with an x1 slot?

      Delete
    3. x16 slots are rated by specification to be able to supply at least 75W of power; x1 slots are rated to supply either 10W or in some cases 25W -- I'm not sure there's an easy way to tell what any particular x1 slot can provide in terms of power, though. So if you get a board with three x16 and three x1 slots, in theory you can use three x16 to x16 unpowered risers, but you'll need to use three x1 to x16 powered risers. The problem as I see it is that the powered risers are not very high quality, and since you don't know exactly how much power your GPU actually pulls from the x16 slot, it's a case of "better safe than sorry."

      To explain further, consider that an R9 290X as an example has an x16 PCIe connection that can pull up to 75W, plus it has a 6-pin PCIe power connector that can provide 75W and an 8-pin PCIe connector that can provide 150W, for a total combined power of 300W If it only draws 250W, where does the power come from? Maybe it's 150W from the 8-pin, 75W from the 6-pin, and only 25W from the x16 slot...or maybe it's 75W from the x16 slot, 75W from the 6-pin, and 100W from the 8-pin! The former would likely be fine on a powered x1 to x16 riser, but the latter would potentially fail at some point -- and possibly damage hardware in the process.

      Delete
    4. Excellent explanation, thanks. x16 across the board then, and I'll stick to unpowered x16-x16 risers. Better safe than sorry eh!

      Delete
    5. Hi Jarred, as per our talk on x16x16x16x16 mobo's and your suggestions, I took a look at the Gigabyte GA-990FXA-UD7: seems if one plugs in 4 cards they will all run at x8. Thoughts?

      Alternatively, I've found only 2 other monster mobo's that can take 4 cards simultaneously at x16:
      - ASRock X79 Extreme11 (quite pricey!)
      - Asus Z9PE-D16 (still kinda pricey!)

      I guess it's not cheap to buy a mobo that can run 4 cards at x16 simultaneously eh...but I suppose we're only talking about a couple extra hundred dollars on the initial cost of the mobo...any thoughts?

      Delete
    6. It's more important to have the physical x16 slots (which can provide up to 75W by spec) than to have x16 bandwidth. The x1 bandwidth is still sufficient in most cases, so really you just need the power x16 is rated to deliver (75W vs. 10W/25W for x1).

      Delete
  2. So Jarred, I have just about everything for my mining rig but the PSU's and associated riser cables. I am proceeding with the following:

    GPU's: MSI R9 290 Gaming (x3)
    MB + CPU: Gigabyte GA-990FXA-UD3 + AMD FX-8320
    PSU's: Seasonic SS-860XP2 (x2), combined with a ADD2PSU

    Each of these Seasonic PSU's comes with what they call four 6P/8P PCI-E connectors, so I will in total have eight 6P/8P connectors coming from my PSU's.

    Since the MSI R9 290 has a PCIe port each for 6-pin and 8-pin connectors, would it be a good idea to use an unpowered 16x riser and simply connect 6-pin and 8-pin power from the 2 PSU's to the 4 GPU cards, so as to minimize power drain from my MB? Thoughts?

    ReplyDelete
    Replies
    1. You actually *have* to connect both the 6-pin and 8-pin PCI Express Graphics (PEG) cables on each GPU. The 6-pin supplies up to 75W, the 8-pin up to 150W, and the x16 slot can provide up to 75W. I don't know that there's a way to determine exactly where the GPU actually gets its power from, but an R9 290 can basically draw nearly 300W, so you'll be using all three connectors.

      If you're using x1 to x16 risers, you basically have to get powered risers or you risk not providing enough power. For x16 slots, however, they're required by the PCIe specifications to supply up to 75W. If the board can't do that then the board doesn't meet specifications and shouldn't be sold. In general, I've found unpowered x16 to x16 risers work fine.

      Hope that helps!

      Delete
    2. So when you say...

      You actually *have* to connect both the 6-pin and 8-pin PCI Express Graphics (PEG) cables on each GPU

      ...will I be connecting both the 6p and 8p cables on each GPU to the PSU?

      Delete
    3. Correct. Some PSUs have a single cable that connects to the PSU with two PEG connectors on the other end, others only do a single PEG connector per cable.

      Delete
  3. Awesome, that clears it up good Jarred...

    I'm having the hardest time finding unpowered x16-x16 riser cables of the longer variety...around 30cm...

    Would it be alright to use powered cables (albeit I'll have to swallow the higher price), and simply leave the molex connector on the riser cable unconnected?

    That way the cable will only draw up to 75w from the MB, and the potential rest of the wattage from the GPU's 6p and 8p connectors will be drawn from the PSU's...

    ReplyDelete
    Replies
    1. Using powered x16 cabled doesn't hurt (necessarily), but it shouldn't be necessary. One other point to note is that it's often necessary to force the PCIe slots to run as "Gen 2" (PCIe 2.0) instead of Gen 3 when using riser cables.

      Delete