UPDATE: The author of this article, Shawn Plep, sold all his mining equipment and cashed out in early 2014. LiteCoin and other cryptocurrencies became too unprofitable.
If you’ve followed this site for any length of time you realize that I enjoy using the internet to make money. Mostly, I’ve done this by building affiliate sites (by selling products through affiliate networks, or individual products). It’s always made me some money. But never has the opportunity to actually mint money arisen, until the advent of cryptocurrencies.
By now, you probably know what a cryptocurrency is, because Bitcoin (the most famous form of digital money) has been in the news lately. Financial news sources, major news networks, and mainstream business pundits have all commented on BTC in the last month. This is due to the recent wider adoption of Bitcoin by consumers and merchants – and also due to the massive and somewhat surprising rise in the value of Bitcoin. (About $1000 as of this writing.)
Well, the ship has sailed on the opportunity to mine Bitcoin. But you can still cash in on its notoriety and it’s value by mining other digital coin. For the purposes of this article (and ongoing experiment) I will be mining Litecoin (LTC). I’ll update you, dear readers, on my progress – including how much I end up with as profit (in USD). But the first step in this endeavor is to build a Litecoin mining rig. Interested? I hope so.
This first part is where all the risk lies, but with the price of LTC higher than ever it can be profitable in a short time to mine LTC. The first thing we need to do is to build our “mining rig”. Just like gold miner have rigs, cryptocurrency miners have computer rigs that do the work for them. (Our mining rig is being built with Litecoin in mind, but we can use it to mine other currencies as well.) The mining rig doesn’t have to look fancy, nor does it have to have to be like other computers in any way. What we’re going for is maximum mining power and minimum power consumption.
Another important consideration is keeping the rig’s temperature within a safe range (so as to not burn out our components). Oh yeah – and since we’re investing a lot of money in the rig, we want to make our investment back as soon as we can. Since it was Black Friday weekend, I took advantage of some of the sales. It was difficult to find the exact components I wanted, but I ended up (pretty much) with what I planned on buying.
The most important component for a rig is undoubtedly the GPU (Graphics Processing Unit). You probably call them graphics cards or video cards. For a miner, they’re the thing that does all the calculations. Some cards are better than others at making the calculations necessary to mine Litecoins. There are a few comparison charts online (such as this one) that will help you see the rate of kH/s, power consumption, etc. I decided to go with a card slightly higher than middle of the road cards, and I was searching for a deal as well. I had my eye on the 280x. After searching all the usual sites (Amazon, Tiger Direct, Newegg) I eventually found a deal on a Sapphire Radeon TOXIC R9 280X. I got three of them.
I then ordered a motherboard with four PCI express slots. (I plan on adding another 280x board in the near future, to maximize the processing power of my mining rig.) The processor I got was a really basic Sempron 145, and I added 4GB RAM. (I probably would be fine with just 2GB in fact.) The CPU doesn’t do the mining work; the real work is done by the graphics cards. So if it looks like I skimped on the motherboard and processor…I did. I just need something basic to control the GPUs.
There is no hard drive in my system. For one thing, I don’t want to deal with even more power consumption. Secondly, this system is only doing one specific task and can be run off USB. So I am using a spare 8GB USB stick I have to put the Linux OS and mining program on.
I also ordered some powered risers (to connect the 280x cards to the mobo) and a couple of big cooling fans.
Last but not least, I needed at least one high-quality power supply. Instead of one, I ordered two power supplies. I wanted to make sure to get quality PSUs, and also to have enough power for all the stuff I’m running. (I wanted 1300 watts, and ended up doing it by getting two 650watt supplies.)
Sapphire Radeon TOXIC R9 280X (Three of these)
You can put all this into an actual computer case – but you don’t have to. I plan on setting this rig up in my garage on a table, and using a plain old dish-drying rack to hold the GPUs, and set the motherboard underneath. Once I get it set up and mining, my plan is to let the rig run for 24/7. According to my calculations (taking into consideration all my costs, the likely hashrate my rig will have with all three of the 280x GPUs, and the current price of Litecoin) my investment will be paid off in about a month.
Until I get all the parts in near the end of next week, all I can do is wait. Unfortunately I joined the LTC rush kind of late – and a lot of other people had the same idea judging from all the sold-out mining cards online. But I believe there’s still a lot of opportunity not only in Litecoin but also in other cryptocurrencies.
In future posts I’ll explore that some more, and will also share my mining progress. Next post, I’ll detail the actual build and setup of my Litecoin mining rig. By next post, if you order the same items I ordered, you will be able to follow my step-by-step instructions and have a working Litecoin miner with no effort.