Step by step, what to buy and how much to invest to enter the world of bitcoin and ethereum mining.
Hernán Marble
05/29/2021 8:30 AM
Clarín.com
Technology
Updated 05/29/2021 8:30 AM
In the context of a decentralized market such as cryptocurrencies, where there are no regulatory authorities or formal statistics;
It is believed that in Argentina there are approximately
2 million accounts that operate with bitcoin, ethereum and other digital assets
.
However, this data does not imply that there are 2 million active users.
Opening the account in a virtual wallet is always free and takes a few minutes, so it is common to use different platforms - such as
Ripio or Binance
, for example - to experiment, see what currencies they offer and learn the mysteries behind their operation. especially for beginners.
However, more and more Argentines are also betting on crypto mining to seek profitability in dollars, safeguard their savings and escape inflation.
This trend was materialized in the meteoric increase in the prices of computer inputs from January 2021, when the Ethereum price jumped from $ 610 to $ 1,200.
How to build a mining rig
The higher the investment, the higher the return.
Photo: Shutterstock
In the case of ethereum, one of the most mined cryptos in Argentina, to start making money it will be necessary to assemble a team made up of various components of traditional computers with a
microprocessor, motherboard, power supply and video cards (GPU)
.
The so-called mining rigs are essential to solve the calculations for obtaining the reward in the form of cryptocurrencies.
Currently they cannot be used for Bitcoin mining, but they can be used for other currencies such as Ethereum whose price is currently around $ 2,780,
after having touched 4,000 on May 12
.
Like a large computer with multiple video cards -
preferably Nvidia's 3000 and 2000 lines
- the versatile rigs have components that are available on the traditional market.
While the user may be tempted to skimp on the initial investment and buy cheaper options, these class of components are likely to lack the computing power to power your mining operation.
For example, the power supply is one of the most complex issues, since you have to control the temperature and the voltage so that the transistors do not degrade:
the cooler it is, the more power it will deliver to the plates for mining and a better economic performance
.
Although they carry risks, they tend to yield long-term returns.
Photo: Shutterstock
The disadvantage of these rigs is how complex the assembly and configuration can be
, mainly for those who do not have computer skills;
although there are more and more material and tutorials on YouTube to be able to do it.
With the tuning of the components,
the next step will be to choose the operating system
.
Because it has automated driver installation and can connect its components without intervention, Microsoft's software trumps Linux, even if it is the popular choice.
From there, miners will need to choose the software that works for their mining goals.
BitMiner, CGminer, and Ubuntu tend to be good options for beginners, while more advanced miners can choose more versatile software.
Microprocessor, motherboard, power supply and video cards, indispensable.
Photo: Shutterstock
While it is important to find cryptocurrencies that fit the equipment available to maximize performance.
Another factor to take into account is the price per kilowatt of electrical energy, since
the equipment will be on 24 hours a day, 7 days a week
.
In addition, they need refrigeration.
With the price of the kilowatt / hour plus the energy consumption data of each equipment, the basic cost per day can be estimated.
Then, the economic revenue that will be obtained with said equipment will be necessary, an account that results from knowing its hashrate and comparing it to the difficulty of mining the cryptocurrency.
That will give the minimum daily profit per team.
Crypto mining in the Conurbano
Julian Becerini, a
computer
technician
and electronics hobbyist,
began mining Ethereum from his home in Castelar, Province of Buenos Aires
, with an MSI RX 570 video card that he regularly used on his computer to enjoy video games.
"I was out of work, well, I'm still out of work. A cousin asked me what's up, how mining works, and I started to investigate.
I saw that it was profitable, that the issue was good. It was going to be another income for the wallet
, It wasn't bad, ”the 22-year-old told
Clarín.
And he added: “If total you did not have to pay anyone else, it was simply to put it together and walk away, obviously there was a whole background to see that everything is fine, do the maintenance, see that they work, configure everything, but
how I did it I didn't have to put in more money
, more than just electronics ”.
The blockchain, the heart of transactions.
Photo: Shutterstock
His cousin and partner, an architect named Ignacio, said that he got involved in mining out of "curiosity" and as a new way of investing money "without having to make a lot of effort".
"I always said that the best money invested is the one that moves and never did (laughs).
As I had some green and the dollar was going down, Julian told me that the plates were good and I was encouraged, "he confessed.
To carry out this project they invested about 700 thousand pesos
, which is equivalent to a rig with six video cards (GPU).
"We figured we
could get between $ 600 and $ 800 a month obviously depending on Ethereum's valuation,
" recalled the computer technician and electronics hobbyist.
The miners are those who run the nodes of a crypto network, and they are a fundamental part of the operation and integrity of the network of each cryptocurrency.
Its mission is to collect transactions as they occur, order them into blocks and add them to the chain, in the way that the
blockchain
works
, where each block must maintain a relationship with the previous one to be valid.
The network creates a difficult puzzle to solve (but easy to verify) and the first of the participating mining nodes to find the answer wins the right to create the next block.
In this way, the miners use their computational resources to find the solution to the problem.
In short, all technical efforts are focused on finding the correct hash: the “fingerprint” of a file or data set.
The puzzle is mathematically programmed, and there is no way around it.
On average, the process of finding the hash takes about 10 minutes.
The miner who wins this race and creates the new block receives value in ethers, the cryptocurrency of Ethereum
, as a reward, for example.
In addition to the fees included in the processed transactions.
The AFIP, on alert
As a result of this new form of investment adopted by more and more Argentines, state control bodies, such as the Central Bank (BCRA), the
National Securities Commission
(CNV) and the anti-laundering entity, the
Financial Information Unit
(UIF). ), they put cryptocurrencies under their radar.
This tax regiment
was also joined by the AFIP
, which officialized the launch of Form 8126 so that virtual exchange houses (exchanges) have the duty to report crypto transactions.
As there is no control over who issues or transacts,
it is not necessary to prove the origin of funds
.
This condition favors money laundering through the purchase of bitcoins and their placement in the formal market.
The same as when using virtual assets for the purchase of real estate, which is almost impossible to prove the origin of the funds.
Cryptocurrencies are also not insured by the government like bank deposits in the US are. That means that
cryptocurrencies stored online do not have the same protections that money deposited in a bank account has
, hence the volatility of their price. and cyberattacks are some of the latent dangers surrounding this currency.
In case of storing any of them in a wallet or digital purse provided by a company, and it ceases its operations or suffers a computer attack, no government will come to the financial rescue as it could with the money that is kept in the banks.
Global input shortage
In this context,
manufacturers of computer hardware do not hide their discomfort
around the use of their products to mine this digital currency.
The American company Nvidia, one of the benchmarks in the field of graphics cards (GPU), directly seeks to discourage this practice that threatens its business and generates shortages worldwide.
“There are a lot of
scalpers
-
speculators who buy all the available stock of a product until it is exhausted and then offer it at a higher price
- who when the cards arrive, buy them immediately to sell them more expensively and thus profit mainly from the miners, but also gamers ”, assured the NVIDIA technical marketing manager, Alexandre Ziebert, to
Clarín
.
To counter this onslaught, Nvidia announced that the powerful
GeForce RTX 3060
, originally designed for video games, were not going to be used en masse to stockpile this coveted virtual currency.
The cards' pre-installed drivers cut their mining efficiency in half
by limiting the hash rate by 50 percent.
“With this type of action we are trying to control this situation, but there are still other problems to be solved.
For example,
there is a global shortage of semiconductors
.
So the amount of GPU that we can do is not the amount that we would like to serve the entire market.
On the other hand, the prices are higher than normal.
So the cost price of a graphics card is 100% above what it would normally be ”, he acknowledged.
And he declared: “
If you want to play today, it is very difficult to get a graphics card
.
Currently because they do not arrive or the mining farms have already bought them all ”.
In Argentina, meanwhile, the situation is not far from the world scenario around mining.
“Retailers are desperate for products.
People are crazy, they do not mind paying a plate for 400 dollars when it costs 100
.
They know that by mining they get 100 or 200% profitability, ”said Sergio Monzón, owner of Air Computers, one of the main distributors in Argentina.
“The priority is the customer who was always there.
We give him 5 or 6 products but there are many that we cannot fulfill ”, he adds.
On the other hand, the availability of hard drives and SSDs in important markets such as China and Japan is running out, and
the target is for the new Chia cryptocurrency
.
Unlike other cryptocurrencies such as Bitcoin, whose mining requires a lot of processing power, Chia depends on storage capacity, hence the need for numerous hard drives or solid state drives (SSD).
And what little is available is sold at exorbitant prices.
That is why
Chia Network set out to create a greener alternative to the Bitcoin blockchain
, developing tests of algorithms that are based on storage capacity rather than electricity consumption.
Instead of a "proof of work", the blockchain relies on a "proof of space" and a "proof of time".
Storage-centric blockchains are considered a more energy efficient alternative to proof-of-work because they lack the energy-intensive transactions.
The lack of hard drives in prominent Asian markets is a sign of concern for other countries.
Especially if the stock that was compromised begins to be redirected to other parts of the world.
Although the situation has not yet reached the point of global shortages, new reports arriving from Asia confirm that
the prices of this class of products have already skyrocketed in values that exceed 60% in some cases
, and in fact the manufacturer Seagate already confirmed in their financial earnings report for the quarter that they saw a notable increase in demand that is related to the Chia mining.
SL
Look also
What is happening in China with cryptocurrencies and why the price of bitcoin falls so much
The rise of cryptocurrencies also creates a shortage of hard drives
