{"id":1073,"date":"2013-08-26T11:55:39","date_gmt":"2013-08-26T01:55:39","guid":{"rendered":"https:\/\/reckoner.com.au\/?p=1073"},"modified":"2017-09-30T12:45:15","modified_gmt":"2017-09-30T02:45:15","slug":"im-done-mining-litecoin","status":"publish","type":"post","link":"https:\/\/reckoner.com.au\/features\/im-done-mining-litecoin\/","title":{"rendered":"I’m Done Mining Litecoin"},"content":{"rendered":"
In my previous Reckoner feature about Litecoin<\/a>, I came to the conclusion that I had three options on the table at that stage of my experiment mining the crypto-currency:<\/p>\n Option 1<\/strong>\u00a0– sell up and cut my losses.<\/p>\n Option 2<\/strong> – keep mining at my current rate.<\/p>\n Option 3<\/strong> – buy more rigs and mine even more Litecoin with the hope that the price rises.<\/p>\n Option 1, the path of least resistance.<\/em> That’s the choice I ultimately ended up at.<\/p>\n My Litecoin mining adventure wasn’t profitable and \u2014if I’m honest\u2014a waste of time. To redeem something out of the experience, I can at least share with you what I did wrong. If you are thinking about mining Litecoin or some other sort of crypto-currency, you can learn from my mistakes.<\/p>\n The main thing everyone wants to know is “how much money did you lose, man?!”<\/em><\/p>\n Let’s cut to the chase.<\/p>\n My costs were:<\/p>\n Which is a total spend of $21,586.02<\/strong>.<\/p>\n My income was:<\/p>\n That puts me at a total loss of $8,183.24<\/strong>. However, I do have 894LTC in my wallet.<\/p>\n The current price of LTC right now is hovering around $2.50 (ugh)<\/em>, which means if I was to sell my entire LTC stash, I will have lost $5,948.24<\/strong> all up.<\/p>\n A good scenario is the price of LTC maybe<\/em>\u00a0hitting\u00a0$5 once it’s announced on Mt. Gox<\/a>\u00a0(see their blog post<\/a> which addresses this further). Which means, realistically, I will have lost $3,713.24<\/strong> in total.<\/p>\n Ideal circumstances? If I was to sell that LTC for $9.15 per coin, I could break even on the whole thing. If I sell for $10, I’d make $756. If I sell my stash for $72.50 per coin, I’d be able to buy a sweeeeeett Mercedes Benz A250 Sport<\/a>.<\/p>\n Yeah, that isn’t going to happen.<\/p>\n I was naive enough to think that the price of LTC would grow so quickly, that it could meet the minimum repayment on my card and cover the costs of electricity, rent & an internet connection. Unfortunately, this did not happen. I see now\u2014with the benefit of\u00a0hindsight\u2014that this goal was unrealistic.<\/p>\n I totally underestimated the sharp rise in mining difficulty too. I knew it would rise, but not at the rocketing rate it has. Between April and August, LTC mining difficulty grew by 437% – that’s insane!<\/p>\n <\/p>\n Image: Litecoin rig by Snootch<\/a><\/p>\n My setup could have been more refined. I could have been running rigs with 5 cards per motherboard, resulting in a slightly lower initial setup cost and slightly lower power consumption. I could have also flashed the graphics cards’ BIOS (and hence, underclocked the GPUs) for a good balance of power consumption and performance, ultimately saving more power.<\/p>\n With 7×5 card rigs, I would have spent $12,502.23 on gear and $1,910.67 on miscellaneous setup equipment. This would have saved me a total of $1,644, which at the end of the day would have been a noticeable difference.<\/p>\n There would have been a small decrease in power consumption by having less rigs with more cards, but not by a lot and it’s hard to work out the exact power usage in the real world, especially after system tweaks.\u00a0Let’s say I achieved a 10% reduction in my power consumption \u2014 a generous estimate based on the result of GPU tweaking and rig consolidation. That would have made my power bill $3,796, instead of $4,218, decreasing my loss by $422.<\/p>\n Tweaking the system and consolidating my rigs would have made a difference (to the tune of almost $2000), but not that<\/em> much of a difference in the overall scheme of things. I still would have lost over $1,000.<\/p>\n The key to crypto-currency mining (in Australia at least) is cheap power. Ideally, free power. Many of the people who purchased my gear are mining Litecoin and other coins, and when I asked them how they’re justifying the low profitability, they all said said they’re able to snag free electricity from somewhere. Normally stashing a few rigs at work, hoping nobody notices (hah). Good luck to them I say!<\/p>\n If you can find free power, here’s how it breaks down:<\/p>\n Spend $14,500<\/strong> to set up a farm that should generate around 600LTC month. If you don’t have to pay for power\u2014and assuming the LTC rate of difficulty increases at the same rate\u2014you should have accumulated around 7200LTC. If you end up selling that LTC for say, $6 a coin, how much would you make?<\/p>\n $28,000 in profit<\/strong>.<\/p>\n Turn around and sell the gear for at least half of its original value, and that number rises to around\u00a0$35,000.<\/p>\n Assuming your source of free power doesn’t disappear, or find out and call the police for stealing…<\/p>\n Image: Solar panels by Canadian Dirtbags<\/a><\/p>\n But what about solar power? The sun gives us free electricity! Let’s use it to power our Litecoin farms!<\/p>\n Over the course of a year, our 30x GPU Litecoin farm will use 73,634kWh of electricity. Charged at 18.225c\/kWh (still the cheapest power I can find in Australia), the annual power bill will be $13,419.<\/p>\n A solar system with enough average peak output to supply 8400W of electricity would cost about $10,000 (you can get 10kW systems installed for $10k these days, cool!). Solar panels that output 10kW will be able to supply all the power we need! Spend $10k to save $13.5k and the panels will last for 20 years giving out free electricity! Let’s go buy solar panels now!!!<\/p>\n Don’t get too excited, though. There’s a few harsh realities of solar power we need to step through.<\/p>\n First of all, the sun doesn’t shine 24\/7. At night, we’d need an alternative power source. Normally that’s the grid, but you could also install batteries. If you do, you’ll need enough of them to power 8400W for the time when the sun doesn’t shine, and then enough solar panels to charge the batteries and<\/em> power the farm itself.<\/p>\n You’d be looking at just $25,000 for the panels, let alone the insane amount of batteries you’d need (probably 40 of the biggest deep cycle batteries you can find, which will set you back another $35k). Spending $50,000 doesn’t make sense.<\/p>\n There’s wind power, which if you’re in a windy enough area, can supply power at night, but a 10kW turbine is huge and will set you back $20k easily. Good luck getting a permit to put one up anywhere in Victoria too. Thanks anti-wind farm nutjobs.<\/em><\/p>\n So the only real alternative is to get a discount on our electricity use by using solar when it shines brightly to give 8.4kW of power, then supplementing it with grid power when there’s not enough light. Solar panel output varies greatly depending on the amount of sunlight. Take these PVOutput stats<\/a> from a 10kW system out in suburban Melbourne.<\/p>\n\n
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What went wrong? What could I have done better?<\/h1>\n
Setup Efficiencies<\/h1>\n
You Need Cheap Power<\/h1>\n
Solar? Wind?\u00a0Exploring Alternative Power Solutions<\/h1>\n