The concept of crypto mining confuses people like no other. So I\u2019m gonna try explain in the simplest way possible.<\/p>\n
Think of mining as \u201crenting\u201d your computer to people on the Internet who use\u00a0cryptocurrency<\/a>.<\/p>\n Why do all these people need your computing power? To\u00a0process<\/em>\u00a0their crypto transactions (i.e. sending and receiving crypto) in a secure way.<\/p>\n This is because crypto transactions don\u2019t rely on traditional companies (e.g. a bank) or governments to process them. Instead, it\u2019s the miners who do the processing work. In return, they get paid for their services in cryptocurrency.<\/p>\n For example, if I send 1 bitcoin to my friend in London, it\u2019s not Visa or Standard Chartered Bank that makes this transfer happen. Rather, it\u2019s all the Bitcoin miners around the world working together.<\/p>\n Perhaps the coolest thing: technically, anyone can be a miner. Just like how anyone can publish a blog post on the Internet \u2014 no need to ask for\u00a0permission<\/em>\u00a0\u2014 all you have to do is install crypto mining software and start.<\/p>\n Yes you could, but you probably wouldn\u2019t be profitable. Because your laptop is a general-purpose computer \u2014 not specifically designed for crypto mining \u2014 you\u2019d spend more in electricity bills than you\u2019d earn. Your laptop would wear out pretty quickly too. <\/div><\/div>\n I\u2019ll share a pic of our mining rig later.<\/p>\n The concept of \u201ccreating\u201d money fascinated me. At that point, I had already invested a bit of money into\u00a0Bitcoin and Ethereum<\/a>, and had a basic understanding of mining. But knowledge and experience are different things \u2014 I longed to try it for myself.<\/p>\n It still sounds a little absurd to me. A random bunch of guys in a small room, building a machine to generate money that can be used anywhere on the Internet. Maybe I have a bit of an\u00a0inferiority complex<\/a>, but the thought of doing something from Malaysia that impacts the world has always been a dream. Helping create money for the world? Yeah, I\u2019m in.<\/p>\n (Just so we\u2019re clear, I don\u2019t mean money that\u2019s issued by banks. I mean money in the broader sense of the word \u2014 something you can use to pay people. It was perhaps unclear in September 2017 that crypto would be successful, but it\u2019s much clearer now.)<\/p>\n I suspect Captain and Gamer had similar motivations. Yes, we knew these things were technically possible, but would we be able to do them ourselves?<\/p>\n Time to put it to the test.<\/p>\n We started with an extremely basic mining rig. A mining machine might be a special type of computer, but it\u2019s still a computer \u2014 with a CPU, motherboard and hard disk. So like any computer geek, we went shopping in\u00a0Plaza Low Yat<\/em>\u00a0for components.<\/p>\n Everything we bought was cost-optimized: the cheapest component we believed that\u2019d still be usable and reliable. Things like the monitor, keyboard and mouse don\u2019t matter at all for mining performance, so we bought cheap, second-hand ones to use. No need for a proper enclosure either \u2014 we just modified a plastic shoe rack I got for RM 30 (USD 1 = RM 0.24) from Giant Hypermarket.<\/p>\n Except for one thing: the graphics cards. Since the bulk of crypto mining happens in the graphics cards, we bought 2x of the best graphics cards available: the Nvidia GeForce GTX 1070, which cost >3x the price of all the other components combined. If crypto mining can teach a life lesson, this is it: Just the\u00a0essentials<\/a>\u00a0for most things are fine \u2014 focus your resources on your core mission.<\/p>\n Our initial investment came up to RM 2,300 each.<\/p>\n We spent a lovely Sunday afternoon putting the hardware together, and a few more evenings figuring out the mining software. Everything was available (legally) online for free, including guides and FAQs for when we got stuck.<\/p>\n Then we switched it on:<\/p>\n Our plan was to test for a while, figure out if we were making money, then add more graphics cards to earn more. Mining Profitability Calculators online estimated it\u2019d take us one year to break even \u2014 if prices remained stable.<\/p>\n Crypto prices\u00a0crashed in 2018 though (Ethereum only recovered in early 2021), so we never invested any more. We just let things run \u2014 two graphics cards working quietly in a room, grinding out magical Internet money.<\/p>\n At some point in 2020 \u2014 after mining for more than two years \u2014 we decided to shut off our mining rig for good. The electricity costs vs mining profits at that point meant we weren\u2019t breaking even.<\/p>\n Crypto mining grew into a\u00a0billion-dollar industry<\/a>. There are multiple publicly-listed crypto mining companies today, running huge mining farms \u2014 think entire factories filled with thousands of mining machines. This means hobby miners like us aren\u2019t competitive anymore. Higher electricity costs in Malaysia also mean it\u2019s harder to make a profit from here.<\/p>\n (On an industrial level, I believe there\u2019s a huge opportunity in \u201cwasted\u201d energy that can be converted into digital assets. If you\u2019re in the\u00a0energy industry<\/a>\u00a0and wanna chat about how crypto mining can help optimize resources and increase profits, feel free to\u00a0contact me<\/a>.)<\/p>\n For individuals, if you\u2019re interested in crypto, buying Bitcoin\/Ethereum directly on an exchange is the best way to get started.<\/p>\n Anyhow, the wisest move we made was just to hold all our mining profits in Ethereum. We paid for our electricity bills in cash, never touching the Ethereum in our wallet. I\u2019m proud to say we had conviction about the future of crypto, especially during the crypto winter years of 2018-2019.<\/p>\n Four years on, most things have changed. The three of us used to work in a\u00a0social enterprise\u00a0together \u2014 which I\u2019ll always remember as some of my most meaningful work.<\/p>\n Captain remains in that space, but is focused on digital learning now. Gamer has moved into freelancing, working on Human Resources projects. I went full-time into crypto in 2018, helping set up\u00a0Malaysia\u2019s first\u00a0and largest digital asset exchange.<\/p>\n From seeing each other every day, we probably see each other once a year on Zoom now. If you\u2019ve ever left a company, you\u2019ll understand that most colleagues are \u201csituational friends.\u201d When the situation changes \u2014 if someone resigns \u2014 you realize you actually didn\u2019t have very much in common. But for the three of us, we still had our WhatsApp group. Supposedly to chat about mining, but it allowed us to keep in touch too.<\/p>\n At Ethereum\u2019s current prices (~ USD 3,100), we almost 4x-ed our initial investments: turning roughly RM 3,000 (including electricity bills) each into >RM 11,300. Nothing to shout about in the crypto world where people can make\u00a060x gains overnight<\/a>. Also, if we\u2019d just bought Ethereum directly instead of building a mining machine, we\u2019d have 10x-ed our money.<\/p>\n As for building cool things with good friends \u2014 whether they make money or not \u2014 that will forever be priceless.<\/p>\n<\/span>In summary, here\u2019s what mining looks like:<\/span><\/h2>\n
\n
<\/span>Why mine crypto?<\/span><\/h2>\n
<\/span>Building our mining rig<\/span><\/h2>\n
![\"crypto](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2021\/11\/10191216\/crypto-mining-rig.jpg\")
<\/a><\/p>\n<\/span>Three years later…<\/span><\/h2>\n
<\/span>How much did we actually earn?<\/span><\/h2>\n