Since Bitcoin is not printed and distributed by any government, “Bitcoin miners”, using specialized computer hardware/software, solve math problems in exchange for earning Bitcoins. This process is used to confirm transactions, and also find new Bitcoins and put them into circulation. (Note: the absolute maximum limit is 21 million Bitcoins.)
This provides a predictable way to issue the currency and an incentive for people to become miners. But Bitcoin mining is both a cost- and an energy-intensive activity. It requires big investments in technology and results in huge electricity bills.
What if you could mine Bitcoin using free electricity? If you don’t need to pay for electricity, then you would substantially cut your costs, and make mining a lot more profitable. So, is worth it to mine Bitcoin with free electricity?
How to Source Free Electricity for Bitcoin Mining
Nowadays with the heightened interest and the math problems in mining growing exceedingly difficult, outfits with more computing power have come to dominate this activity. It’s gotten to the point where mining centers have become the majority of the network. These are locations around the world where mining takes place on a large scale, usually where energy is either inexpensive or free.
In the meantime, enthusiasts in developed countries with expensive electricity get creative in order to to reduce expenses to make Bitcoin mining worth it. The best case scenario is when you get free electricity for Bitcoin mining. How is it possible? Well, there are different options:
- Public electricity at school/office;
- Alternative sources of energy (e.g. solar panels, windmill farms, hydroelectric power);
- Free electricity for electric cars (charging stations);
- Countries where electric power is subsidized by the government (e.g. Venezuela).
There are many mining centers in certain areas of China where there is free hydroelectric power. But the country is looking to curtail Bitcoin mining, which may send operations elsewhere.
Energy is inexpensive in Iceland, because it is mainly harvested from renewable sources like wind and hydroelectric power. The small population of the island, just 340,000 people, use about 700 gigawatt hours of energy annually. The suggested Bitcoin centers, meanwhile, are expected to consume 840 gigawatt hours of electricity per year.
Everyone knows about hyperinflation in Venezuela, where McDonald’s Big Mac now costs half a month’s salary. But local people have found a better alternative to escape hyperinflation. They’ve taken Bitcoin as an alternative, and mining has become big in the country. With few utilities that its citizens can still afford, electricity happens to be among them. In fact, electricity in the country is hugely subsidized and virtually free. Such a setup has created an opportunity for struggling citizens, as miners can run many transactions and earn at least $500 a month. This can feed a family and provide them with their basic needs – groceries, medications, etc.
How to Get Free Electricity at Home
Energy bills can sometimes get so high, especially if you re mining crypto at home. Bitcoin mining using free electricity in your apartment – can one actually pull it off? One way of gaining energy independence at home is through solar energy. Solar energy is one of the most cost-effective means of powering our world.
A key component in converting sunlight into electrical energy for domestic consumption is the solar panel. It’s made from strips of reflector material, such as glass strips, along with other elements, that make possible the conversion of solar energy into electricity. Solar panels are rated according to the amount of electricity they can generate, mostly in Watts.
Installing solar panels can be done in stages, if money is an issue at the beginning, because it’s possible to expand the system as your energy needs grow, or as your budget allows. Therefore, you don’t have to wait until you get the money to buy a lot of solar panels to be truly energy independent. Starting small is probably the best way to go. On top of that, there are a lot of incentives, like rebates and government tax credits designed to encourage more homeowners to go solar.
Using Free Public Electricity for Mining
If you are a university student who lives on campus, you probably don’t pay for electricity, but get it for free from your school. And this is one of the reasons why mining gets popular on college campuses.
Exploiting a crucial competitive advantage and motivated by profit and a desire to learn about the technology, students around the world are launching cryptocurrency mining operations right in their dorm rooms. Mining with free electricity is so appealing!
Alex Gilarde, a senior at Fairleigh Dickinson University, started GPU mining with free electricity in 2012: “When I started mining cryptocurrencies and going onward, I would do it in my parents’ house and at our own school, actually after school. I would leave my laptop in different corners of the school”. His long-term perspective on the activity led him to spend $4,000 to $5,000 on hardware to build his mining rigs. Alex Gilarde makes use of free electricity to run his three heat-generating mining rigs. He compensates with computer fans and by turning his dorm room AC on to keep the temperature down, which is an extra cost for the school and an added profit for the cryptocurrency miner. Besides, by monitoring the temperature, Gilarde has his graphics cards spread out so they don’t use too much power, and monitors his energy usage with a cloud-based tracking system.
Mark, a student at MIT in Cambridge, Massachusetts, joined the online marketplace for individuals to mine cryptocurrency for willing buyers in 2016. His desktop computer, boosted with a graphics card, was enough to get started. Thinking he might make some money, Mark downloaded the platform’s mining software and began mining for random buyers in exchange for payments in BTC. Within a few weeks, he had earned back the $120 cost of his graphics card, as well as enough money to buy another one for $200.
By March 2017, he was running seven computers, mining not only Bitcoins, but a few other popular altcoins around the clock from his dorm room.
There are a lot of student miners around the world who ran or currently run dorm room crypto-mining operations. Initially, almost every student began mining because it was fun, cost-free, and even profitable. As their operations grew, so did their interest in cryptocurrency and in blockchain, the underlying technology. Mining, in other words, was an unexpected gateway into discovering a technology that many predicted would dramatically transform our lives.
What dorm miners don’t pay in electricity, they pay in discomfort. Even without the radiator running in the middle of winter, the temperature in your room can be well above desirable. Be prepared that your portable mining rig will produce a lot of heat.
When Nicholas Abouzeid, a senior at Babson College in Wellesley, Massachusetts, began mining from home in high school, he ran the software off his Macbook Pro and kept his bedroom window open to regulate his laptop’s temperature. “It would get to 35 degrees in my room, and I was shivering in bed, but my computer was very happy,” he says. A few months before leaving for college, when he built his own computer to mine crypto more efficiently, he surrounded it with fans to disperse the heat.
A Japanese man who lives in a company dormitory decided to take advantage of this mining opportunity with his electricity costs equal to null. He started to mine crypto in his dormitory room about six months ago. He said he first investigated the limit of electricity, if any, he was allowed to use for free. With the collaboration of his colleague, he bought a bunch of dryers and let them run all day and all night. “I was worried that the dorm manager would notice it,” he said, “but I was able to figure out the amount of usable watts.” He said he calculated that it would cost more than $200. Sora can mine 0.8 ether in a month. Once he converts it into fiat, he makes $500, a good bonus to his monthly income.
The Japanese miner is planning to extend installing miners in the rooms of his close colleagues, as the company dormitory includes 100 employees, even if the electricity bill rises a little, it can pass unnoticed.
Is it worthwhile engaging in Bitcoin mining if my electricity is free? It’s now possible with the free power from charging stations.
A lot of miners are looking for cheap electricity, and if you own a Tesla, you get electricity for free at Tesla’s charging stations. So it didn’t take long for a clever Tesla owner to fill his trunk with mining computers. A Model S owner built a cryptocurrency mining rig in his electric car.
The purpose of this contraption was to use the free access to electricity with the Supercharger network. Technically, it is not clear if one can draw electricity from the Tesla to power those mining systems, which is what this owner is claiming. It remains a mystery though how he draws the 2.8 kW of power required from the battery. One can only use free energy if their Tesla falls under the unlimited free Supercharging program, which represents most Model S and Model X vehicles.
Of course, that presents its own issues. Ethically, it’s not what the Supercharger network is meant to power and therefore, some might find issue with people using it to power mining rigs instead of long distance driving.
Also, it would require an increased use of the battery pack, which is not good for durability.
Finally, that rig would create a lot of heat inside the Model S. Aside from preheating your car while making a few bucks, it’s not clear what use someone would have for that heat. Apart from having some kind of access to free power, which again is riddled with drawbacks, the setup doesn’t really offer many advantages.
Mining with Free Electricity – Is it Profitable?
Mining costs, however, have gone through the roof in recent years. GPU cards have seen their prices skyrocketing as growing demand wasn’t met by a proportionate increase in supply. The additional computing power required to mine Bitcoin is also taking its toll on electricity costs.
To profitably mine Bitcoin today, you need an application-specific integrated circuit, or ASIC – specialized hardware designed for Bitcoin-mining efficiency. An ASIC can have 100,000 times more computational power than a standard desktop computer equipped with a few graphics cards. But ASICs are expensive – the most productive ones easily cost several thousands of dollars – and they suck power. If Bitcoin prices aren’t high enough to earn more revenue than the cost of electricity, the pricey mining hardware cannot be repurposed for any other function.
If you have access to free electricity, then cryptocurrency mining could be a very profitable business.
But only those with specialized, high-powered machinery are able to profitably extract Bitcoins nowadays. While mining is still technically possible for anyone, those with underpowered setups will find more money is spent on electricity than is generated through mining. In other words, mining won’t be profitable on a small scale unless you have access to free or really cheap electricity.
Types of Bitcoin Mining Hardware
Although this was the first type of Bitcoin mining hardware accepted into the mainstream, it is now considered the least powerful. You’d be using the CPU of your computer to mine BTC. By adding GPU hardware to your computer, you will be able to enhance the hash rate. However, the Bitcoin mining difficulty has increased so much that people can hardly make any profit for CPU/GPU mining.
FPGA Bitcoin Miners
FPGA stands for Field Programmable Gate Array. It is a circuit designed for configuration after building. This allows a hardware manufacturer to buy chips in bulk and customize the chips for Bitcoin mining before installing them. The performance of this hardware is far better than that of CPUs and GPUs.
ASIC Bitcoin Miners
Of the three types of Bitcoin miners, ASIC is the best. ASIC stands for Application Specific Integrated Circuits. They are designed for the sole purpose of mining Bitcoins. They are extremely fast and consume relatively little power compared to the others. Although they are expensive, the miming speed of these miners is mind-blowing.
If you want to set up your Bitcoin mining rig, the best system for you should be the one you can afford and make a profit from. Each miner has advantages and disadvantages. You can use a mining profitability calculator to decide which hardware is best for you.
Bitcoin Mining Methods
Here are the three main ways to mine Bitcoin and start earning money:
Using a Mining App
The easiest way to start Bitcoin mining is to simply download an app that does everything for you. Bitcoin Miner is a Windows 10 app that’s free to download and use on Windows 10 PCs and tablets and also works on Windows Phones.
Once the Bitcoin Miner app is downloaded, users simply need to enter their wallet address in the Payout Address settings screen and then press the Start button. That’s all there is to it.
The more powerful your device is, the more Bitcoin transactions it will be able to process. This means that a Windows Phone may not earn much BTC but a Windows 10 computer that can perform heavy duty tasks like video editing and playing advanced video games does have the potential to earn quite a bit.
Mine Bitcoin in the Cloud
Cloud mining involves signing up for an account on a third-party website and paying them to mine Bitcoin and other cryptocurrencies for you. Typically, the more money you pay, the more cryptocurrency your account will be able to mine.
Cloud mining contracts usually last for a minimum of a year or so though some can continue for an indefinite period of time. Mined cryptocurrency is sent to your designated wallet address on a regular basis which makes it a cool way to earn residual income on a weekly (or sometimes daily) basis. The cryptocurrency that’s mined almost always covers the cost of the initial payment.
Building a Bitcoin Mining Rig
ASIC miners are generally quite expensive and sell for several thousand dollars. Running such a device also consumes a lot of electricity so it can take a while, often over a year of continuous mining, to begin earning a profit. But if you don’t need to pay for electricity, then you can start making money right after paying off the hardware.
The most popular brand of ASIC miners is Bitmain with their Antminer miners. They often release newer models of their miners that are more efficient at mining Bitcoin and consuming less energy. And, they provide consumers with comprehensive support and setup guidelines aimed at helping both advanced miners and complete beginners.
When using an ASIC, you’ll also need to download advanced software and join a pool. The software will tell the ASIC what to mine, where to mine, and who to send the mined BTC to while the pool is a group of other miners that choose to help each other mine together and share the rewards.
In order to get an idea if mining is profitable, you should start with calculating the profitability. Electricity is the major ongoing cost of Bitcoin mining. The price paid per Watt will greatly influence profitability.
Select a suitable ASIC (e.g. a budget Antminer S5 that you can buy for $250-300), enter this information to a calculator as well as other parameters to get the profit estimates.
Altcoin Mining with Free Electricity
In contrast, alternate currencies like Ethereum are “ASIC-resistant,” because ASICs designed to mine ETH don’t exist. That means that ETH can be profitably mined with just a personal computer. Rather than rely solely on a computer’s core processor (“CPU”), however, miners pair it with graphics cards (“GPUs”) to increase the available computational power. Whereas CPUs are designed to solve one problem at a time, GPUs are designed to solve hundreds of problems simultaneously.
You can mine alternative currencies with personal computers and graphics cards. You can either use your desktop (or even a laptop), or build your own computer. And your gaming graphic card might even meet the hardware requirements for mining.
Looking at other profitable altcoins to mine depends on such factors as the specifications of the hardware you will use to mine and of course knowledge about the altcoin and its technology involved.
Vertcoin is aimed at being owned by a sole user and is not centralized by banks, institutions or mining hardware geeks. They are also developing 1-Click Vertcoin Miner for easy access mining from home and you can earn coins by being a part of their network. Their stealth addresses concept is new and is designed to provide security and address privacy in the public ledger.
- Their developers are aiming to make this mining possible on PCs used by common consumers.
- They have a setup guide on their site for various specifications of your PC and operating system (Windows, Mac or Linux).
- Total generation of coins: 84 million.
- Block time: 2.5 minutes, Block rewards: 25 coins per block.
- Hashrate: 764.8 Gh/s. The Vertcoin chart, as analysts predict, is somewhat similar to stock charts of Bitcoin, Ethereum and Facebook Inc. As the price of VTC is around $4.5 and has surged to $5, it is definitely one of the coins to look at for mining. Also, the time it takes to mine is faster, and network access is easier , which makes it a must have in your investment.
They provide privacy by ring signatures, ring confidential transactions, and stealth addresses. It is so private that all the addresses used in the transaction and the amount of Monero transferred cannot be known and is kept hidden from everyone. It is based on PoW but its protocol is not based on Bitcoin, in fact, it’s based on the CryptoNote protocol.
- Total generation of coins: Infinite.
- Block time: 2 minutes, Block rewards: 5.35 coins per block (reducing).
- The algorithm used: CryptoNote.
- Coins are not pre-mined.
- Block Size: variable, changes according to demand, Block count: 1,494,663 (as of 25th Jan 2018).
- Hashrate: 661.39 Mh/s.➢ CPU and GPU, Win, Linux OSX support.
Hodl coins can be mined easily by anyone as it can be done by CPU. It has a unique concept of locking coins and then earning interest based on the number of coins mined and locked. The standard rate of interest given on every block for 30 days is around 5% APR, which compounds for each block added.
- Total generation of coins: 81,962,100.
- Block time: 154 seconds, Block rewards: 50 coins per block.
- Algorithm used: 1GB AES Pattern Search.
- Coins are not pre-mined.
- CPU only, Win, Linux OSX support.
When mining for cryptocurrency, computational power, along with low power costs, is king. Miners around the world compete to solve math problems for a chance to earn digital coins. The more computational power you have, the greater your chances of getting returns.
Though dorm room mining may seem trivial, it’s creating a new generation of cryptocurrency experts. Many miners say their experiences taught them crucial lessons about the technology, and some have already substantially profited as well. And those who have free electricity have a much better chance to make a quick profit mining new coins.