They began in Poznan’s dormitories making first racks out of vegetable boxes. In their student days they had mined few bitcoins daily… and did not keep any of it. Nowadays they prepare dedicated hardware which is one third more efficient than this on the market and at the same time consumes one third less energy.
What is a must-know if you are about to start your journey with mining? What budget do you need to have in the beginning? What is daily cost of electricity and how fast did first mining hardware purchase costs come back? About all this you can learn from Marcin Żywica from ŻET Technologies
How did the beginning of your mining journey look like?
First contact was very unusual and happened during… classes at the University. More precisely during classes about investing in new technologies. It wasn`t obligatory subject and it is a pity that it isn`t until today. The goal of such subject is to get a closer look on how to use new financial platforms, especially from IT point of view. We were told i.a. about forex market, how it works and what algorithms rule it. I remember that once we were introduced to an enigmatic cryptocurrency – Bitcoin – and how to produce it. At that time it was normal to mine few bitcoins daily on one computer. It really stuck in our memory, unfortunately none of us demonstrated enough imagination to save these coins. At that time it was simply a digital and worth few cents token. However, we are thankful that we had opportunity to experience first-hand what cryptocurrencies are and what mining is. Thanks to that, we are where we are.
Beginning of mining was rough but somehow it moved on. Years 2013-2014 were very interesting period for bitcoin. Big price variability, legendary fall of MtGox and big bubble with its peak at 1200$ – recently overtaken btw. Than equally big correction with its bottom of 100-150$. A true school of (cryptocurrency) life. We`ve decided to try mining: we bought first miner – simple pc with two iconic graphic cards R9 280x. What is interesting, costs returned in just 60 days because we typed Blackcoin to mine (BLK). However it was more of a luck rather than our feeling of market and technological potential.
When you began in 2013, how did mining look across the globe and what has changed over these three years?
Changes are enormous. Above all, there are more currencies to mine. In the beginning there was only bitcoin. In time new alternative projects were brought to live, so called altcoins – alternative cryptocurrencies. New algorithms were compiled, on which most currencies were based, and so we went through SHA256 phase, script x11 ending on today’s phase of Dagger (ethereum), Cryptonight (monero) or Equihash. In upcoming years new projects are likely to appear which today exist only in heads of genius programmers. It is important for all society to march forward. Mutual coexistence ought to be key to further cryptocurrency improvement.
How did the mining evolved itself? We enclose graphic charts for the most popular currencies from February 2014 and February 2017. It is hard to pick one common feature. Much has changed but why? Most of nowadays currencies did not exist three years ago. What can be spotted and at the same time is fundamental is that more professional cryptocurrencies start to appear, They are steered by experienced managers and programmers. Imitative currencies, which don’t come up with any innovations, are eliminated by natural selection. Budgets of top cryptos, which you can currently mine, are counted in millions of dollars. Their market capitalization is counted in hundreds of millions and network`s hash rate, a feature which guarantees undeniable functioning of cryptocurrencies, is counted in tens of thousands.
What would it mean if one tried to mine on his or hers personal computer? Could there be a profit?
Unfortunately these times have gone forever (I guess). All branch directs to more professionalism, effective – that is profitable – activity and need of specializing computers – miners. Only they guaranty profitability. Nothing stands in way to mine cryptocurrencies on pc but not to earn money.
What is a worth knowing before starting mining? And what seems to be equally important what budget do we need to have?
If we consider beginning journey with mining we should start from the basics: read about blockchain, bitcoin, what a cryptocurrency is and what are its functions. Than you have to search for information how exactly coin emission process looks like. This is enough for the beginning. Hardware maintenance is automatic enough that there is no need for advanced knowledge of programming, cryptography or computer skills. Elementary skills are absolutely enough to become full blood miner.
In the begging it is worth to spend about 10 000-12 000pln. It is a price of classic miner with 6 graphic cards, which will provide reasonable profits. Such miner is capable of producing 1000zł monthly income so predictable purchase costs comeback time is about 12 months. I`ll add that most compact constructions start above 5000zł and the biggest ones can cost even 50 000zł!
Energy is one of the basic features when calculating mining cost estimate. Reducing Energy consumption as well as its costs is very important matter for every miner. In fact, from person with miner to specialised mining pools everyone ought to aim at Energy consumption reduction and getting the most cheap electricity. Such optimization can rise profits up to 20-30%!
The best method is to optimize miners Energy efficiency. Thanks to professional knowledge we are able to reduce Energy usage almost up to one third at the same time increasing power of a miner up to one third. It is enormous difference.
It is worth to negotiate contract with your power provider. Just few cents on a kilowatt make a difference. One can think about photovoltaics – with bigger than usual power needs – it can be bought on market. But we are talking about really enormous amount of Energy.
Mine Bitcoins or also other currencies?
Today choice is wide. It is worth to type coins with technological potential. These are mostly currency which I talked about: with big budget and talented personnel. This is Bitcoin, Ethereum, Zcash, Monero, DASH. There are few currently. What is important our miners allow to mine every one of them. Flexibility is a great advantage. We aren`t stiffly tightened to one coin.
When it turns to be useful, we can make decision to change currency A to currency B. The same in the future: if a new and interesting cryptocurrency emerges, we will be able to implement software, which will help us to mine it using our hardware. Every one of ours miners has application to change cryptocurrency with just one click. It is a very comfortable and functional solution significantly improving usage of machine.
How does profitability of cryptocurrency changes? Is it possible to create own mining plan, which will be actual for at least couple of months or is it necessary to adapt to situation every day?
Cryptocurrency world is characterized by huge change dynamics – it is a technological niche. Price of currencies changes unstoppably all day.
Two factors are necessary to calculate mining profitability:
- Actual market price – tells us how much coins, which we emit, are worth
- Total network hashrate – describes emission level
Of course it would be impossible to learn those characteristics by your own for all currencies, which is why special profitability calculators can save us. We can easily calculate actual mining profitability. Moreover, we are expanding skills of automats, which monitor actual profitability rate and when needed they will switch miner to the most efficient currency. Full adaptation of this technology is scheduled by 2 half of 2017r.
Miner perspective is more comfortable because emission cost is simply cost of Energy. Daily power usage for miner worth 10000pln is approximately 10pln (considering home fee 50-60gr). Our perspective is less comfortable because it is up to us to calculate prices for miners. Until now a gold rule has always been accurate: the longer you hold miner the higher prices you`ll get for your coins. Price of majority of top cryptocurrencies systematically rises with growth of technological adaptation that follows coins.
Interesting from miners point of view are especially such moments when currency has its debut on market, has its first major software update or is in Hossa phase on exchange. I`ll give an example: The end of October Zcash`s premier – a long awaited crypto. During first days from premier one could have great financial profits. Firstly because the available software was in a fatal state and many miners didn`t manage to get over it. It means that the hashrate was relatively low and it was possible to mine many coins. Secondly market price was extremely high. Zcash costed even hundreds of bitcoins. Only owners of this coin could be the miners who produced Zcash at the very beginning. It was a very comfortable situation for them. I won`t deny that such situations are the most desired ones in this profession.
From what you say we can conclude that often one person mines less. Is there any way to earn despite having small budget?
There are two methods of mining: mining pools and solo mining. What is essential in blockchain is that it promotes bigger groups of miners. This is why for all big cryptocurrencies you need to join a mining pool.
To illustrate: our chances for mining solo one Bitcoin block are like one to few billions whereas in one of the biggest mining pools such chance is like one to millions. Whole process is based on theory of probability and variation. This means that we can produce coins after five minutes as well as after 50 years. It is better than in practice to join existing mining pools. We are developing our own pools on polish servers and then we gain in proportion to our shares in mining pool. If we own 1% of pool`s hashrate we will receive 1% of emitted coins.
You provide hardware, apps, give opportunity to join mining pools. Is there anything else you could offer to potential clients?
Yes. Our goal is to provide tools for the whole blockchain infrastructure, on which cryptocurrencies are based.
Excluding miners and their optimization we also take care of software updates and create applications supporting mining. Moreover, we provide advisory services in the field of cryptocurrencies the so called “digital rescue”. We show cryptocurrencies, talk about them and teach about almost every aspect of it: from basics like usage of bitcoin, personal wallet installation, backups, advisory in building miners finishing on maintenance. We are also often visited by people interested in cryptocurrencies and we simply exchange our opinions and potential development courses.
In the future we are planning to start working on few bigger projects. We want to compile documentation and software. Our goal is to give society something really cool from us. We also plan to improve classes for students about cryptocurrencies and blockchain such as theoretical and practical parts like mining currencies, building own mine, creating nodes, unforking blockchain and many other useful stuff.
Do you think mainly about polish market or expansion on aboard markets?
We think in a double way. Thankfully technology today allows to contact easily and trouble free. Applications supporting remote desktop technology allow us to connect with every miner despite facing long distance (some are located in china). The distance is not a problem. We are active both on polish and English sites. We also have social media channels and once again in polish and English language.
The only obstacle is transporting miner to customer. Unfortunately blockchain technology did not come up with an idea how to quickly transport miner from location A to location B.
What are your predictions for the upcoming years when it comes to cryptocurrency market?
Definitely positive. The branch develops and it is a fact. More people are getting interested in this topic not only business but also science societies more often and willingly explore cryptocurrencies. There isn`t a week when an interesting article or news about coins or blockchain doesn`t appear. No one is surprised that science or financial institution decided to allocate money for development of this technology. Number of users systematically grows as well as level of consciousness.
Comparing year 2013 with current situation a great progress can be seen. There is nothing left to do but going in this direction and wait for a moment when our wage will be calculated in bitcoins or other cryptocurrency and majority of data registers will be storage in blockchain.