As of 1/27/14 Spotswood is no longer selling the mining tray pictured below, instead he is offering an open-frame version which sells for $100.
A few weeks ago I started mining for Bitcoins to learn more about Bitcoins and cryptocurrencies in general. Since I already had some extra AMD video cards my initial hardware investment was zero making it easy to get started.
Since I’ve started mining I haven’t stopped and I’m now considering building a dedicated Litecoin mining rig with better hardware.
Currently I’m mining on spare cards in my primary computer and with summer coming I would prefer to move my mining operations to the basement where the extra heat (and noise) won’t be such a nuisance.
I’ve found coin mining to be an interesting, fun, and challenging hobby making it worthwhile for me to pursue. I certainly don’t have any plans to retire from coin mining anytime in the near future but I do think the potential rewards outweigh the risks.
Many people in the Bitcointalk forums or on Reddit will suggest simply purchasing Bitcoins or Litecoins instead of investing in a mining rig. Personally I think the hobby of mining for coins is much more fun than just buying the cryptocurrency.
I also feel there is less risk involved with building a GPU mining rig. If the bottom of the coin market drops out I can still either sell my mining hardware, or use it for gaming, etc whereas if I had purchased ecurrecy I might have nothing left whatsoever.
Why I Plan to Switch from Bitcoins to Litecoins
I plan to make the switch from Bitcoin to Litecoin mining for a couple of different reasons.
1. Based on their current price and difficulty Litecoins are more profitable to mine than Bitcoins. You can plug in the numbers and see for yourself using Dustcoin.com’s mining profitability calculator. Their calculator computes mining profit based on hash rate, power costs, difficulty, and coin prices.
2. ASIC based Bitcoin miners are becoming more prevalent. As more of the ASIC miners hit the market mining for Bitcoins using GPUs will essentially become obsolete, many consider them to already be useless as Bitcoin miners but I’ve still been able to turn a profit. Litecoins are resistant to ASICS so it’s likely that GPUs will remain viable in the near future.
As more ASICs come online it is anticipated that more GPU miners will make the shift from Bitcoin to Litecoin which will in turn cause Litecoin difficulty to skyrocket making mining less profitable. If difficulty increases and Litecoin value does not go up then it most likely will not remain profitable to mine for Litecoins. Although many people speculate that Litecoins could see a big increase in value if their adoption becomes more widespread.
Litecoin Mining Overview
EndWorldSuckDotCom provides a good general overview of Litecoin mining and profitability calculation.
Litecoin Mining Rig Hardware Costs
If you’re looking for a low budget rig you might want to look elsewhere. The hardware listed below is based on a slightly modified design of Cryptobadger’s Litecoin mining rig.
My modifications include the addition of a custom chassis which will provide a professional, and organized look to the rig.
If you’re looking to save a few bucks you can opt for the plastic milk crate recommended in Cryptographer’s guide but I don’t care for the look of the crate rigs.
I also opted to include a 1000W power supply (+$30) to provide the option to add a 4th card in the future. Having additional wattage available also prevents the power supply from having to run near it’s maximum output (where they are least efficient).
1. Powered PCIe risers to reduce load on the motherboard
2. High quality Corsair memory
3. Low Profile USB drive for the Linux boot drive
Estimated Hashing Rate and LTC Generation
According to the mining hardware comparison page the 7950 card is capable of 600-685 kHash/s depending on the tweaks in use. These estimates put the total Scrypt hashing power of this rig at somewhere 1800 – 2055.
Using figures from the Dustcoin profit calculator the rig should generate 3.04-3.47 LTC/day.
Income Estimates Based on Current Prices ($3.14 per LTC)
|Low Estimate||High Estimate|
|Daily||$9.54 (3.04 LTC * $3.14)||$10.89 (3.47 LTC * $3.14)|
|Monthly||$290.18 ((3.04 LTC * $3.14) * (365 / 12))||$331.41 ((3.47 LTC * $3.14) * (365 / 12))|
|Yearly||$3,484.16 ((3.04 LTC * $3.14) * 365)||$3,976.97 ((3.47 LTC * $3.14) * 365)|
Estimated Power Usage
The specs for the MSI R7950 list a maximum power draw of 200 watts per card. The AMD CPU is rated with a TDP of 45 watts but in reality the CPU draw will probably be less since Litecoin mining puts very little load on the processor.
The motherboard, chassis fans, and CPU fan are somewhat difficult to estimate when it comes to power draw.
|Component||Estimatd Power Draw|
|Video Card||600W (200W x 3 cards)|
|Motherboard / ETC||100W|
The best way to accurately measure operational power draw is to use a watt meter such as the Kill a Watt power meter.
Calculating Operational Cost of Electricity
Based on the estimated total power draw of the mining rig we can do some simple math to determine the expected cost for electricity to operate the miner.
1. Convert power rating of Litcoin miner from watts to kilowats
745W / 1000 = .745 KW
2. Multiply kilowatts by the hours the miner will run per day to get kilowatt hours (kWh)
.745 KW * 24 Hours = 17.88 kWh per day
3. Multiply kWh usage per day by cost per kilowatt. Electricity costs can normally be found on your electric bill. (I pay .19 cents per kWh which is considered high for most areas)
17.88 kWh * $0.19 = $3.40 per day
4. Multiply daily cost times 365/12 for monthly usage cost
$3.40 * (365/12) = $103.42
From these calculations you can see that the power draw of the mining rig, and how much you pay for power have a huge impact on the profitability of a Litecoin mining operation. If you don’t pay for power, or have a method to obtain it from renewable sources (solar, wind, etc) then you have a significant advantage over other miners.
Electric costs can also be reduced by increasing the efficiency of the miner itself by undervolting, reducing heat, and using a highly efficient power supply (80 plus platinum).
Analysis of Overall Profitability and ROI
Now that we know how much it will cost to build the Litecoin miner, and how much electricity it will burn during operation we can run the numbers for overall profitability of the miner.
I highly recommend using your own estimates for power costs based on your local electricity costs. Cost per kWh can vary greatly between different parts of the country.
Please take the estimates below at your own risk, these numbers are based on the value of Litecoins today.
Litecoin prices are constantly fluctuating and can be highly volatile. These numbers also do not take any downtime for power outages, hardware failure, or other issues into account.
|Hardware Costs||$1,558.87||Based on table above|
|Estimated Hashing Power||1927.5 KH/s||Average of low / high hash estimates from table above|
|Litecoins Generated Per Month||98.85||LTC /Day from Dustcoin Calculator * (365/12)|
|Total Income Per Month (Based on 1LTC = $3.14)||$310.39||Litecoins per month * $3.14 (current LTC price)|
|Estimated Monthly electricity cost||$103.42||Calculated in previos section (Based on my local power cost)|
|Estimated Mining Pool Fees Per Month||$6.20||Subtracted 2% pool fee from total income per month (depends on pool)|
|Estimated profit Per Month||$200.77||Total Monthly Income – Monthly Electricity Costs – Pool Fees|
|Time to pay off investment||7.69 Months||Total Hardware costs / Estimated Profit Per Month|
These estimates of ~$200/month equal about a %12 return based on total hardware costs. The downside is that it will still take about 8 months (best case) to recover the initial investment. During this time there is a lot that can happen.
1. Litecoin prices could drop – Based on my electric costs Litecoins must stay above $2.30 in order for me to produce a profit.
2. Litecoin difficulty could drastically increase – If difficulty increases due to more miners (which is expected) this would reduce Litecoins generated per month affecting profit. Some speculate that if difficulty increases so might the value of Litecoins though.
3. Hardware becomes obsolete – Faster , more efficient hardware could be released before the hardware costs are recovered. In this scenario you could be forced to sell your video cards on eBay and purchase upgraded cards.
To Build or Not to Build
At it stands today Litecoin mining is certainly profitable but there is a fine line between price and difficulty required to keep it this way. If you have existing hardware you can dedicate towards building a miner you will reach the break even point sooner. For those of you like me who are looking to upgrade it is reasonable hardware investment if you interested in mining for more than just the profits.
If you have a bullish outlook on Litecoins then this may seem like a great deal given the potential gains. There are many things that can go wrong to prevent this miner from paying itself off. If Litecoin mining, or ecurrency mining with GPUs in general takes a dive then you’ll at least have some hardware you can repurpose or even sell.
If you found this guide useful feel free to send me a tip!