How to Mine Corn at Home
It is winter time and it is cold. A lot of individuals are considering mining as a way to heat their house as well as DCA into Bitcoin. Mining is incredibly difficult to be successful at, but home miners have an advantage over larger miners as the barrier to entry is much lower. There is a wide assortment of equipment available for varying prices. Also, most homes already have infrastructure put in place that allow miners to turn on machines with minimal modification.
What goes into mining?
Mining is pretty straightforward though it does come with its pain points. You buy a computer, plug it in, and watch as your electric bill skyrockets. Simultaneously, you begin watching Bitcoin flow into your wallet. The requirements to be able to do this are pretty simple. You need an area that is somewhat isolated from where you and your family are because the machines are loud. You also need a way to control the heat the machines put out because they can overheat unless you are moving the air somewhere else.
Most miners require 240v electricity. Think of your dryer or oven outlets. Most houses have 240v electrical outlets that can be used to power miners. The one exception is the Antminer S9, which was released in 2017 and now can be used as a space heater as it is not profitable anymore, and can run on 120v.
Miners take a tremendous amount of electricity which means that you are limited by the capacity of the service delivered to your house as well as the electrical panel in your house. Most electrical panels are rated for 100-200 Amps (There’s a million resources out there to learn about amps, watts, and volts). You need to keep in mind that other electrical appliances consume electricity and subtract whatever the max of all them turned on at the same time is from your total capacity to determine how many miners you can fit into your home.
Converting cables to fit dryer plugs is incredibly easy and can be done after watching a YouTube video. For most individuals, the infrastructure needed to power a miner is already there. Sometime though, a licensed electrician should be called to install the proper infrastructure if you want to have your machines running in a more convenient spot.
Once you have your machines plugged in and connected to the internet, things should be pretty stable and straight forward. You can make things complicated by modifying your machine and or trying to repurpose the heat to heat your home. Modifications are fun to play around with, but can get expensive very quickly.
Why Mine at Home?
Mining is great for people who enjoy headaches. It’s a fantastic way to piss off the spouse and get a divorce. It’s a great project for the kids to learn about Bitcoin and electricity. Ultimately Bitcoin mining is an incredibly fun process for individuals to learn about a whole different side of Bitcoin. If you’re lucky, things will be straightforward. If you are unlucky, you could be dealing with months of headaches and pulling your hair out. Machines sometimes break and going through the warranty process is never fun.
Residential electricity rates are generally not the best with the national average being around $0.10 kWh, so the profitability just is not there for most people. Many home miners do not think much about profitability but it is incredibly important. We know where Bitcoin is going and want more Bitcoin in the long run. Mining is essentially taking a long position on Bitcoin with the expectation that the investment in that equipment will yield more Bitcoin in the long run than just buying it. Once you ROI on the hardware, everything earned after that point is pure profit.
Mining is about exploiting inefficiencies in the electrical grid or free power situations. Everyone has different conditions they are operating in, and sometimes it makes a ton of sense to mine at home. One of the big benefits of mining at home is it teaches people electrical literacy both by learning how your home is wired, but also how you are billed by your electric company. For me personally, home mining has been an invaluable learning experience.
Some people want to buy Bitcoin ethically without putting all their personal information at risk on an exchange. Mining is a great way to do this, but the premium you are paying may not make it worth it depending on your electricity rate. Having a basic understanding of the economics of mining is important before embarking on this journey.
The premium for ethical Sats may make more sense if you are creative and repurpose the heat from your miner to heat your home in the winter. I personally heat my home with miners and it has been a lot of fun. Sat generating heating systems is a great reason to mine in most environments. Mining at home gives you control over your machine and the conditions they are running in. This is an incredibly attractive way to begin earning Sats.
When you begin mining, you will want to purchase more machines. You will also start seeing the world around you differently and researching where the cheapest residential electricity rate is. It is addicting.
When Not to Mine
I spend a lot of time telling people they should not mine if they do not have the best circumstances. Mining is not for everyone and it definitely is not as easy as it is often presented. It’s called Proof of Work for a reason. One of the biggest reasons not to mine at home is high electricity costs. Every utility company prices their electricity differently so a lot of individuals make the mistake of purchasing equipment and finding out their rate is not ideal. Taking the time to research the all in cost including taxes, delivery fees, etc is important.
This is why hosting is very popular because many people can deploy more machines at a lower rate than at home. Hosting comes with counterparty risk and does not have all the advantages of home mining or mining at a commercial property that you own. There is risk involved and there is no way around this. If you consider hosting, looks for ways to mitigate risk by going with providers that have a proven track record in the industry and can clearly answer your questions.
Mining is a time suck and if you don’t have a lot of time to fiddle and agonize over your machines, it is probably best that you do not mine. It can quickly become a full time hobby, especially if you want to get creative with your setup.
Profitability
Like I mentioned earlier, profitability is important. The average residential electric rate is on the rise, meaning that it is becoming less economical to mine at home. Many home miners make the mistake of calculating profitability during bull markets, and getting sucked into the emotions of wanting a machine that can earn $25 in profit a day on $0.11 kWh power. When the bear market comes, that same machine can and probably will be unprofitable. That is why it is important to understand that cheaper electricity is always better.
This is not a flaw in the hardware, or the network incentives that many individuals are priced out of mining at home. Competition in mining, and in energy markets is incredibly important to network decentralization and geographic miner distribution. If you are set on mining on a higher residential electricity rate, it is really important to realize that the profitability of that machine can dramatically swing up and down depending on your electricity prices, the Bitcoin price, and the Bitcoin difficulty adjustment.
If the prices moons, more miners will want to buy hardware and turn them on. The difficulty adjustment will shoot up making those profits diminish. The economics of Bitcoin make things naturally competitive. If you are bullish on Bitcoin, it means that you are also bullish that the difficulty will continue to increase, depreciating the value of your hardware.
Mining calculators are helpful for getting an idea how much your equipment is bringing in daily, but only offer a snapshot. It is important to know that the income your machine generates daily will change throughout its lifecycle and will overall trend downwards.
Bad Ideas that are popular
There are a few things that I hear frequently from individuals that I consider really bad ideas. One is, “Does it make sense to get solar to lower my electricity cost.” Solar is not conducive to mining because mining is too energy dense. Solar is too inefficient and expensive compared to other more reliable and efficient energy sources that it makes zero sense to have it touch anything related to mining. If you already have solar, it makes sense to consume the power it generates to mine rather than to sell back to the grid, but it in no way is a great way to subsidize mining. It irritates me to hear this because I hear individuals at mining conferences and in mining circles spreading the idea that solar and mining go together. Mining and solar go together in the fact that miners can consume electricity powered by large subsidized solar farms that are a complete misallocation of resources to exist in the first place.
Another bad idea I hear a lot of individuals talk about is mining at a loss as if it is an altruistic act to secure the network. I do not think you are making the slightest impact of securing the network by mining on a single machine. If your goal is to use electricity to secure the network for no meaningful profits, you are much better off storing copies of the Bitcoin blockchain on harddrives and running multiple Bitcoin Core nodes. Bitcoin’s incentives are fantastic and doing a wonderful job of securing the network. Mining is expensive and you can do much more by allocating the money you would have spent on mining to fund Bitcoin developers or Weinicus’ memes.
I hear individuals sometimes talk about mining Bitcoin on graphics cards or a spare laptop. While you can do this, it really makes no sense. If you want to mine Bitcoin but not take it seriously, you can buy older generation hardware to get the same effect and actually earn a little bit of Bitcoin in the process. Do you though.
This next one drives me crazy. Most utility companies provide flexible demand based pricing where you can get lower electricity rates during off peak hours, and higher rates during on peak hours. Generally this looks like a pretty substantial different in price between times when a lot of people are running their AC full blast as well as other appliances. Individuals think that it is a good idea to opt into a plan like this and curtail their miners during on peak hours to take advantage of lower rates. The problem with this is that by consistently turning your miners on and off, you are going to break them and it will not be worth it. If you electricity rate is too high, it does not make sense to mine.
Creativity
Noise and heat are two big issues with mining. Home miners are constantly finding ways of either using these to their advantage or mitigating them. Home miners are incredibly creative and find brilliant ways to make mining make sense. Individuals living in climates that get cold can repurpose the heat that miners put off to heat their homes in the winter. The cost of running these machines can actually lower the cost to heat their homes when offset by the income they are earning. Individuals have also used miners to heat hot tubs and pools.
Picture taken from Travis Brickle in Home Mining Wizards
Which Miner should I choose?
Everyone runs miners in different situations and has different requirements for what they want to do. Likewise, there are a fair amount of different miner types you can choose from. The S19 is like the Honda Civic of Bitcoin miners as it has aftermarket firmware support that allows you to customize your machine a lot more than a Whatsminer. Whatsminer on the other hand rarely breaks and will make you a lot happier in the long run.
Almost all miners require 240v outlets. Some of the newest generation miners such as the M53 require 3 phase power which means you cannot run the miner in your home.
To make it simple here’s a list:
If you want a space heater that runs on 120v, choose the Antminer S9
If you want to do goofy things with aftermarket fans, home immersion, etc, choose the S19
If you want to be happy long term and buy a machine that you set and forget, but a M30S++
What Electrical Infrastructure is needed?
This part is a great excuse to learn about how electricity works. Home miners almost always become amateur electricians which is an incredibly useful skill. Here’s a list of steps to learn to figure out what you need.
Determine which model of miner you plan to run and what the electrical consumption it will use
Determine where you want to put it
Determine if you plan to use existing infrastructure such as a dryer plug or wire a new outlet
Instruct an electrician on your requirements, or do it yourself and read a lot of articles on electricity.
Most home miners do not need PDU’s (power distribution units) which are essentially big power strips. If you are running only 1 miner, it usually does not make sense to use a PDU unless you want to go all out and be able to turn the miner off remotely at the plug and monitor the power draw. This is another wormhole and can get pretty pricey pretty quick.
If you are planning on running multiple miners, a PDU might make sense to buy instead of wiring separate outlets for each individual miner. My advice though is to always start with one and build from there as you get over the learning curve.
The Future of Home Mining
Many individuals will have different opinions on home mining in the bear market than in the bull market. Most miners right now that are mining at home are unprofitable. This last bull market, even with higher electricity prices, most home miners were mining profitably. Home mining has changed a lot over the years. Bitcoin miners are becoming much more efficient, but also more power dense. As the mining market becomes more competitive and saturated, residential electricity rates will become less competitive.
It is clear at this point that mining at home is great for heating your home and there’s a ton of creativity being dedicated to this. The overall future is unclear for home miners, but I have a ton of faith that people will continue to be creative and find ways for it work.
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