Cryptomining 300 - My Q1'22 Performance

Here's my operating income from my Q1'22 Crypto Mining.

Hi there,

Today I’m giving you a Cryptomining progress update from one of my two mining rigs, with a Q1 Financial Performance Update. Yep, its that kind of update.

As always, you can find TL;DRs and graphics where they dont need to be explaining the concepts.

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In Case You Missed It

• Crypto Wallet 100 - The Researched Rant

• PoS vs PoW - What's with the techy acronyms being everywhere?

• Crypto Business Income - Taxes and Accounting

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Sections You Can Skim To

• WHAT is Cryptomining?

• HOW did you get it setup?

• HOW did your Cryptomining Operation Perform?

• WHAT’s Next?

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TL;DR: Cryptomining is using your computer to make automated calculations on a blockchain, and getting rewarded for it.

For those of who didn’t read the first founding article of this newsletter, I invite you to read my Cryptomining 100 brief below.

I call it a gateway experience that got my into crypto beyond surface level transactions.

Cryptomining 100 - What is it all about?

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TL;DR: Buy a graphics card, configuration some software, and forget about it.

I previously wrote about how I got started. It’s a length read but it has a lot of screenshots for you to walk yourself through it.

Cryptomining 200 - How I Started in 15 Minutes

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TL;DR: $1k Rev, $300 cost, $700 profit for Q1, for one rig.

See details below.

OPERATING REVENUE

ETH Mining Performance (Rounded)

• January - .09 ETH

• February - .11 ETH

• March - .11 ETH

Q1 Total - .31 ETH //// $1,017.30 as of 3/31 ETH value (3,281.64)

Disclosure

• Note: In the first week of January, I made a hardware upgrade to increase performance.

• Note: I am not a subscriber to continuous data logging, so the data presented requires some level of analytic deduction. Refer to the Ethereum Blockchain Transactional Logs here. - Note on a Note: This only includes transfers, but not daily activity, and transfers initated by me irregularly.

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OPERATING COST

Energy Consumption (Rounded)

• January - 424 kWh - $80

• February - 564 kWh - $107

• March - 612 kWh -$116

Q1 Total - 1699 kWh - $303

Source: Minerstat Energy Consumption, corroborated with VeSync Smart Plug Data (above) Meter and Southern California Edison Energy Billing

Fees Paid (Rounded)

• Platform Fees: For my three wallet transfer during the period, I incurred 0.002 ETH, or $5, in fees, paid to the Ethereum Network.

• Software Fees: For the cost of using Minerstat, it cost me ~$6 for the quarter

Q1 Fees Paid: $11.

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OPERATING PROFIT

Using 3/31 ETH value (3,281.64)

• Q1 Revenue- $1,017

• Q1 Costs - $311

Q1 Earnings - $706

Disclosure

Earnings above are estimates if I converted ETH to USD. However, I do not make USD conversions and instead have elected to do the following:

1. Converted to Solana

2. Converted to BTC

3. Retained some ETH to use some protocols I’m exploring

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TL;DR: Your biggest operating risk is daily energy consumption.

Here’s a simplified decision tree for you:

1. ENERGY: What are your energy cost rates, and how is that determined for where you live?

   1. If it’s Tiered - Do not mine

   2. If its TOU or you have solar - Consider mining.

2. HEAT: Do you have physical space to put a heater that will run 24/7?

   1. If you don’t have a need for heat - don’t mine

   2. If you don’t have space (for midsize rig) - also don’t mine

   3. If its cold where you live or you have a garage - Consider mining.

3. PATIENCE: Are you okay with an average 5 - 8 month payback period?

   1. If No, don’t mine

   2. If Yes, consider mining

The scaling factor for a crypto operation is Graphics Cards. Assuming $200-$250 is spent on a barebones computer, you’ll need to spend $300-$2000 per graphic card, depending on what you can get your hands on. The good news is that more expensive graphic cards bring more daily profit to you. The bad news is that they require more power. However, no matter what graphic card you buy, you can expect a pay back period of 5 - 8 months.

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TL;DR: Made performance updates, and now I have the desire to expand.

There’s not much else I can do now besides optimize or expand. And I have neither the energy, nor the will, to continuously do that. So what I do is wait for Cryptomining ETH Twitters to go nuts about performance updates and then I’ll make my move.

Other wise, I keep this operation an incredibly passive, zero effort endeavor.

Performance Update

I have what you called “LHR” cards, or graphic cards that have artificial capped performance set by the manufacturer. These artificial limitations were intended to reduce the mining performance by 50-75% of its original speed. However, thanks to the great Web3 Mining community, mining software has overtime unlocked a lot of the performance, going from 50%, to 60%, to 70, to now 80% of original performance.

Before:

After

This nets in about 10% performance increase, with almost 0 amount of work done on my end. Minerstat does a great job updating, I just had to change my configs on my end to optimize the mining speed.

In the future, I’d like to do the following:

• Expand the hardware and double its size over the next few months

• Convert the mining rig into a validator rig which entails setting it up as a Node.

Hope you enjoy this one,

Cheers!