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Should You Buy a Cryptocurrency Miner?

Under A Crypto Moon By Terry Evans

Lots of people are hearing stories about making thousands of dollars each month off of their home cryptocurrency miner, so it is natural to wonder if this is the right move for you. In this article of Under A Crypo Moon, Terry Evans explains the pluses and minuses of owning and running your own crypto miner.

Adventures in crypto mining

Our story begins in early 2018, after the second major crypto currency downturn. I was looking to invest some of my crypto gains into mining crypto currencies. Not wanting to just throw money at this endeavor, I began my research. In this article we will explore some of my findings and describe some of my personal experiences.

My first decision led me to a sort of chicken or egg type of situation. Which coin do I mine, and do I use a purpose built (breadbox) ASCI miner, or build a custom rig built from off the shelf video cards? The reason I say it is a chicken or the egg type scenario is, deciding on an ASCI miner would limit types of crypto that could be mined. The question is, do I decide on the machine type or the coin type first. I decided to go with the ASCI machine because of the plug and play convenience of the device. As I will soon learn, a down side of these types of devices was they have little resale value if what they are designed to mine loses value. At least with a video card-based rig, the individual cards can be resold or repurposed to recoup some of the investment if things do not go as expected.

Once I has decided on an ASCI miner, I wanted to choose a new model to enjoy the longest window for profitability. At that time the best manufacture of these proprietary miners was Bitmain, and their newest device was the L3+. The L3+ is a script miner that mines coins like Litecoin and Dogecoin. Although these devices will not mine Bitcoin, I like the Idea that I am using the underdog algorithm.

Now that I have narrowed down exactly what I want, it’s time to go shopping. Although the L3+ had been released to the market, it was still cutting-edge tech and there had Onley been one production run at that time. I had two choices, pay a premium to get one from Ebay, or prepay Bitmain to manufacture one for me. I decided to buy one directly from the manufacture in China. The only currency they were accepting for payment at that time was Bitcoin Cash. I already had accounts at several cryptocurrency exchanges, so obtaining the BCH was no big deal. I sent the funds to Bitmain and received a confirmation email indicating that my new device would be ready for shipment in about two weeks.

About two weeks later I received an email informing me that the product had shipped using UPS and I should expect delivery in about a week. Sure enough, about a week later UPS left a sticker on my door informing me that they had my package at their local terminal, but there was $130.00 postage due. Later that afternoon when I got to the UPS shipping terminal, I found out that the fees were related to customs and port fees. Although I was not expecting this extra expense, I felt that I had little choice but to pay the fees. The only problem was the location does not accept cash. I had to come back with a cashier’s check. What a pain.

Now, I am back home with my new device. Setup was a breeze. As these devices can be quite noisy, I decided to install it in my attic. All I needed was an ethernet cable and a power source. After plugging the device in, I pointed it at my Nicehash account address. That’s all there was to it. Later on, I replaced the devices firmware, but that’s another story.
The first two or three weeks were all right, not great but all right. Then profits started to drop. After running my rig for just two months, I was forced to turn it off. Several things had happened at once resulting in the device becoming unprofitable. The price of Litecoin continued to drop. This had the largest impact on the devices ability to generate revenue above the electricity it takes to run it. Another event that happened at this time was a scheduled halving of mining returns. Every so often the number of new coins distributed as mining rewards is cut in half. And while these other two events are happing thousands of new devices are coming in line, causing mining difficulty to go up.

At the time I had to shut the rig down I had come nowhere close to recouping my initial investment. To make things worse, the resail value of the L3+ has dropped through the floor. This device that had cost me $1500 plus another $130 was now going for about $300 on Ebay. I could not bring myself to sell it at such a great loss, so I decided to just hang on to it.

Fast forward about two years to the end of 2020, and crypto is back. When it became evident that there was another major bull run in progress I decided to see if my miner had become profitable again. When I did the figures, I found that not only was it profitable again, it was now much more profitable. The first-time that I turned the device on I was only making two or three dollars a day over what it cost to run. Now, the device is making $13 to $15 dollars a day over the cost to run it. Now, because the devices are so profitable, there used resail value has also gone up significantly. They are now selling on Ebay for about $3000.

Although I would have made much more money if I had just reinvested my returns in crypto, I do not regret my decision to buy a crypto miner. I feel that it has been a worthwhile learning experience. I would counsel anyone considering purchasing miners from China to look into the hidden expenses. I understand that the fees have gone up significantly and they are requiring social security numbers now to take delivery. Now that I have recouped my initial investment and have firsthand experience managing a crypto miner, I might sell it while it is worth more than what I gave for it. Like I said in the title, it has been an adventure.

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