- Lance Wright took up mining as a hobby and started by using old computer parts he had.
- When ethereum’s price went up, he realized it could be profitable, so he began to build up his gear.
- He now has four rigs, each with a variety of graphics cards. He shares their pros and cons.
Lance Wright first heard about bitcoin in 2010. He was 14 years old when he helped his uncle assemble a mining rig using a central processing unit. Together, they used it to mine bitcoin for about a year.
“He’s a network engineer, so he’s always been into that kind of technology,” Wright said. “He thought it was really neat. Eventually, he just said, ‘Oh, this is funny money. It’s not real. I’m going to give up on it.’
He added: “We both don’t want to talk about how much we probably had in our wallet and lost.”
Years later, Wright hopped back into mining using graphics processing units. He built various rigs in his garage out of his house in Hampton Roads, Virginia.
The rigs allow him to mine ethereum and support the cryptocurrency’s blockchain by processing sets of transactions known as blocks. In exchange for supporting the network, miners earn rewards in the form of ether. It’s a project that can be pricey but eventually profitable if done right.
Building up a rig that would become profitable was a hobby for Wright because he loves working on computers. His day job is as a software engineer, a systems-integration developer, specifically.
“You make applications that connect to applications. So it can really vary,” Wright said. “I’ve helped make warehouses. I’ve helped make AI for NATO. I’ve also helped make battleship software. I’ve been all over the place when it comes to development.”
He’s also the founder of Sayou, a single-member LLC that develops software to support companies and recruiters who employ people with disabilities.
Wright had long been interested in computers, their parts, and program development. So building mining rigs was something he tacked on to his passion, especially because he wanted to own crypto but had a bad experience investing in it.
During the bull run of 2017, when cryptocurrencies like bitcoin and ethereum were hitting record highs, Wright threw in $ 200 of his cash to buy bitcoin, ether, and a crypto called quantum. He was a broke 21-year-old college student at the time, so it was a substantial amount for him to fork over.
“I basically lost everything,” Wright said. “I remember that money just dropping further and further and further, but I surprisingly never sold it. I think it was also because I didn’t invest too much that it didn’t hurt too bad. But I wanted to get more into it. “So that’s actually when I started getting into crypto mining.”
He said he believed that the price boom crypto experienced in 2017 was motivated by hype, a factor that would soon be accompanied by real-world adoption. So he wanted to keep building his positions in crypto.
In January 2018, Wright decided to turn to mining as a way to dollar-cost average, or regularly buy.
“One of the few ways that I actually made money during my college time was I’d sell gaming computers,” Wright said. “So I always had an abundant number of extra PCs or graphic cards. And I thought this would be a great way for me to kind of invest a bit more by just using these computers that I already have and start mining on them.”
Because he had a bad experience buying unknown altcoins, Wright decided it would be best to stick to blue-chip crypto, and ethereum was at the top of his list.
He earned an average of 0.36 ether a month from Ethermine between December and February. This is equivalent to about $ 1,118 a month, based on ether prices as of April 19 and a screenshot of his tax account software CoinTracker, which Insider viewed. At this pace, and based on his costs shown below, it would take more than nine months to break even if he were starting from scratch.
Building up the rig
He started by using extra PCs he had lying around and began to add multiple graphic cards until he built up four separate rigs consisting of different types of graphics cards.
“I’m also testing using cheaper and cheaper equipment. And I had no issue buying used or something that even seemed a little bit sketchy,” Wright said. “I would try it out. It was a hobby for me and I enjoyed it, which did cause a couple of fires.”
For all four rigs, Wright told Insider he spent about $ 10,400. Below is a breakdown of Wright’s graphics cards and the average price he paid for each one. For used cards, he would turn to eBay and sometimes Facebook Marketplace to buy a few cards every three to four months.
Having many graphics cards to play with, he quickly found out that pushing a rig above its capacity was a bad idea. The main culprit for the fires was a cheap power supply. The lesson he learned? Buy a good-quality one, even if it costs more.
“My biggest mistake was when I decided to actually build the current rig that I have 12 of them on. I didn’t understand at the time how circuit breakers worked,” Wright, who shares his mining insights on TikTok as Aim4kingship, said. “And I put too many graphic cards on one circuit, and it kept blowing the circuit all the time, and I had to go outside and flip the switch.”
The second lesson he learned was that putting cards from different manufacturers in the same rig could cause the operating system to crash.
He realized it was easier and more cost-effective to get a smaller and cheaper motherboard, so he began to divide up the rigs. The cost difference between a motherboard with higher capacity was about $ 200 for 12 slots versus $ 20 for a used six slot at the time he purchased them.
As for the buildup of graphics cards, he started with three AMD RX 580s, which wasn’t extremely profitable. But once he got the rig going, he realized he liked the cards.
Many miners look past the AMD RX 580s because they’re not the best, he said. But that’s because they’re looking at the overall profit. Instead, they should be focused on the return on their investment, which factors in the price of the card and its power usage, he added.
“When I did the math, it was one of the best graphic cards you could buy at the time for the price,” Wright said.
The cards became especially profitable when ether’s price began to rise, he added.
Below is a breakdown of his four rigs:
Rig one: Holds 12 of the AMD RX 580s.
Rig two: Holds two Nvidia GTX 1070s and one Nvidia GTX 1080.
Rig three: Holds one AMD RX 580 and RX 6600.
Rig four: Holds the three Nvidia RTX 3090s.
As for major takeaways from using different cards, Wright said the AMD 580 cards could give you a better bang for your buck but they required more effort to set up. They may also need additional software to achieve better results.
On the other end, the GTX 1070s cost him more than the RX 580s, but they haveh, or process, slightly less than the latter, he said. But they required zero upfront work to start mining. The Nvidia also worked right out of the box. It was extremely efficient but very pricey, Wright said. They can also have memory-heating issues, he added.
The average electricity cost for the four rigs comes to about $ 229 a month, based on a rate of $ 0.10 per kilowatt-hour. The environmental cost of mining’s electricity consumption is a long-running concern, and some nonprofits are advocating for greener ways to pursue this venture.
This cost can eat into a miner’s profits, which also fluctuate depending on a given crypto’s trading price.
Crypto mining is like trying to catch a moving target. Profits vary depending on the crypto’s trading price. The cost of equipment can also be different based on supply and demand.