All About Cryptocurrency (Sort Of)

Okay, so I realize that crypocurrency mining is not exactly a home automation topic. But I think if you do one, you may well have an interest in the other. And many of the skills you learn from HA (optimizing power consumption, designing systems to run on their own, building computer that run 24/7 for years, etc.) might make you very valuable as a miner.

So what is cryptocurrency mining anyway? Unless you’ve been living under a rock/away from any kind of overblown financial/tech news, you’ve probably heard of Bitcoin and something mysterious called the Blockchain. You’ve probably also witnessed people pitching Blockchain or Anti-blockchain views with fervor bordering on the religious. Blockchain will solve hunger! It will make the financial industry obsolete! Or, Blockchain will destroy the world’s economy! It’s the next gold rush/tulip panic/insert bubble metaphor here!

So what is the Blockchain anyway? Basically it’s a technology for transactions between different people/computers. To make it work, people have to use their computers to solve very complex math problems. When they solve the problems and keep the whole thing afloat, this is called “mining”, and they get rewarded with cryptocurrency. So basically, you volunteer your computer’s time to solve math problems very, very quickly, and you get cryptocurrency in return.

How do you solve these math problems? And whose math problems should you solve? It gets very complex, but essentially, you use very powerful computer hardware–either a GPU normally built for gaming, or a specially-built, very expensive, and ultimately quite silly device called an ASIC. Let’s stick with GPUs for the moment.

Say you have a home automation computer that you also use for gaming, and it has a nice GPU already. Or say you want to see what this cryptocurrency thing is all about, so you buy a nice GPU and drop it into your HA computer. What next?

To do cryptocurrency mining for real, you’ll need a mess of other things–a “wallet” to store your coins, a “pool” of other miners to work with, etc. If you want to skip that and just see what it’s all about, I recommend using one of a few new services which abstract away all the nitty-gritty of mining and reduce the whole operation to a few clicks. 

The best of these are Honeyminer and Nicehash. They scan your hardware, use it to mine any number of different cryptocurrency coins (and there are lots), and then pay you in Bitcoin which you can readily convert into real (sorry, “fiat”) money. If you want to peek under the hood, you can also use these tools (especially Honeyminer) to learn about what’s actually taking place, and then swap out the tools for the actual underlying software they’re built on. Or you can just keep using them, and enjoy the slick interfaces, etc.

So how much can you make? It depends on what the (crazy) markets for cryptocurrencies are doing at any given moment, but with a decent GPU, you can usually make between $0.60 and $3 per day with your computer running in the background.

What’s the catch? You’re paying for the electric power it takes to run a crypocurrency mining device. So factor that in as you plan your profits. The less your power costs per kWH, the more you’ll make mining. And that’s where it gets interesting. Just like optimizing lighting costs with LEDs, or using a Nest thermostat to switch off the AC when you leave, or designing lights that are only on when you’re home, cryptocurrency mining is all about POWER CONSUMPTION. And as an HA person, you’re already good at thinking about that!

Why not try underclocking your GPU, with a program like MSI Afterburner? Switching on your computer via your HA system and mining only when you’re on your utility’s off hours rate? Dropping in a Platinum+ PSU to eek out a few extra watts? Grab a Kill-a-Watt and start optimizing!

Let me know what you think of crypo in the comments. If you want to try one of the programs I mentioned, here are affiliate links, or you can visit their websites directly.