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Everyone seems to want in on this cryptocurrency boom, bitcoin topped fifty eight thousand dollars
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for the first time ever in February 2021 Bitcoin spiking, as we learned just moments ago that Tesla
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bought one point five billion dollars of the cryptocurrency Bitcoin, crossing fifty thousand
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for the first time ever.
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Give me a straight line, judge.
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But it's one hundred thousand, I think in 2021.
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The more people that own and use it and then begin to transact on it.
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The more valuable the Bitcoin is itself.
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Ether The world's second biggest cryptocurrency has also been hitting new record highs this year
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and even the price of dogecoin, a cryptocurrency invented as a joke that doesn't have the same
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serious function and institutional backing is something like Bitcoin surged more than 50 percent
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after an Elon Musk tweet.
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While it's easier than ever to buy a small fraction of one Bitcoin using, for example, an app
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like Coinbase. That's not the only way to get your hands on crypto cash.
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You can also mine for it.
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Before the pandemic took hold in the US, we went to a block chain production studio in Brooklyn to
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learn how to mine for Bitcoin's biggest rival ether.
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Here's how it works and how much it costs.
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Digital mining is kind of like real life mining, except that instead of shovels and dynamite, it's
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accomplished with software and computers.
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A miner is essentially just running a computer program that solves a complex math problem.
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Solving that math problem is how crypto transactions are verified so that money correctly
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moves from A to B.
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The miner who solves the problem first is awarded crypto cash by the algorithm for their bookkeeping
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efforts. In the 12 years of history, not a single entry on its block chain has been fraudulent.
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Now they processed probably close to 10 trillion dollars of transactions and not a single false
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entry in the, you know, that same 12 year period of time.
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What percent of banking system activity was false?
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It's probably close to seven or eight percent to achieve that kind of security while being
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completely permissionless.
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Anyone can actually transact on this.
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I mean, that's a pretty incredible feat.
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Can you explain to me what we're looking at right now?
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So this is an Ethereum mining rig, and this is just like any other computer that you would build
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on your own only instead of having an actual case that all the components live in.
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It's in an open area like this.
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And you need to do this because when the GPs are running, they get really hot and it's important to
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have like a lot of air circulation.
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Lee learned how to mine watching YouTube videos.
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This is back when he was still mining in his spare time.
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And so the main components here, this is your power supply.
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This is your motherboard.
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This is what wires up all the logic on the computer.
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You need to have an operating system running on your motherboard.
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And so this is an SSD, isolated, hard drive.
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And I have a specific operating system called FOS installed on this.
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This is an Nvidia Gforce GTX 1080 GPU.
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And this is a graphics card that people use mostly for gaming.
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But these are also really good for mining crypto currencies.
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Once this is sewed into place, we need to plug it into the power supply.
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And then we need to plug in the data so that graphics card can read from the computer
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and then plug this guy in.
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So what's this last plug here?
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So this is a SATA cable.
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This is so that I can get data out of the motherboard.
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So once it's all wired up like that, this is ready to go.
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We can just turn it on and we'll start mining.
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You just turn the computer into a rig.
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A mining rig. Yes.
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All in this rig cost roughly 1400 dollars because of the parts that you see here.
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The only other thing left to do is create a wallet, a wallet is a digital address for crypto
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cash, and then how long does it take for it to actually start minings?
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This should just automatically start connect to the network and knows your address.
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You'll see it start going in a couple of minutes.
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When the rig is mining, what it's actually doing is running what's called a hashing algorithm.
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So it's computing millions of math equations to work out all those digital transactions.
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But this mining rig isn't doing all these math problems in a vacuum.
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It's actually competing against miners all over the planet to be the first person to verify a
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block of transactions.
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Someone wins this race roughly once every 13 seconds, and whoever wins is awarded to ether.
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They also get a transaction fee, which averages out to about 2.3 ether.
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But there's a mining pool fee that has to be paid, which is about one percent of the block
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price plus the transaction fee.
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When you combine all three at today's prices, that comes out to about sixty four hundred
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dollars. And is everyone using the same hashing algorithm?
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Everyone uses the same hashing algorithm.
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It's completely democratic.
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It just depends on the hardware that you have and the cost of your electricity.
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So the only advantage you would have is if your GPU runs faster than someone else's or your
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electricity is cheaper.
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Yeah there's no way to shorten to shortcut it.
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This rig with only one graphics card can run roughly twenty seven million math equations every
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second. That sounds like a lot, right?
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But on the theorems network right now, there's 400 trillion math operations happening every
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second. So Lee's rig in Brooklyn accounts for around one 15 millionth of the entire Ethereum
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network. That's why people join something called a mining pool.
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A pool lets a single miner combine their hashing power with thousands of other miners all over the
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world. They could be in Afghanistan.
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They could be in Dubai.
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They could be in Europe or South America.
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You're all sharing your resources together and it doesn't matter where you're physically located.
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So you are working together with these people to compete to solve a block faster than anybody else.
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It's one giant competition between everyone that's on the network.
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So it's a race between you and your computers and the computers in your mining pool versus the
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computers and other mining pools.
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let's fast forward an hour teaming up with my mining pool.
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Here's how much I managed to rake in as a miner.
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OK, so is it actually worth it to spend all this money on gear and electricity in order to mine for
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crypto coins? Let's look at the map.
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Our one graphics card rig costs roughly fourteen hundred dollars.
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Tack on five more graphics cards and we're forty four hundred.
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If we run this rig at full capacity with all six GPUs, it can earn about 0.348 either per month,
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which is roughly five hundred and fifty dollars.
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These rigs require quite a bit of power.
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So electricity cost is a big factor.
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Where you live in the United States also plays a major role and how much it cost to mine.
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Since there are stark differences in electricity prices from state to state, Alaska, Hawaii,
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California and Connecticut have the steepest electricity costs in the country.
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New York is also one of the priciest states where electricity bills are concerned.
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So it doesn't necessarily make sense to mine here in New York.
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But it's a totally different story where electricity is less expensive.
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Just take Washington State.
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It's got some of the cheapest power sources in the U.S.
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So there the profits can outweigh the costs.
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Outside the US, the prices drop even lower.
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A study released in twenty eighteen by Elite fixtures show the countries like Egypt and Kuwait
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are among the places where it is least expensive to mine for Bitcoin.
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But one important thing to keep in mind is that the size of the prize that miners win
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exponentially decreases over time, back in 2017, it was five ether, but it's been cut down a few
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times since then. Rewards are now 2 ether.
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But again, you get a transaction fee for each completed block and those fees, something they
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call gas prices, keep going up.
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So there's definitely still money in mining for Ethereum.
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And unlike Bitcoin, there's no cap on the total number of ether coins you can find.
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The supply is endless.