How much exactly does it cost to build a mining rig for bitcoin and cryptocurrencies?

I'll be outlining exactly how much it cost me when I built my first mining rig.

I'll also be covering a little tip that I picked up on how to buy graphics cards at the recommended retail price and not the highly inflated prices we have at the moment.

This has a huge impact on the final price and really does make or break your TTP (time to profitability).

There are 3 main costs to building your first mining rig. Hardware, software and the electricity cost.

These prices are fairly static what your pay today you know about - but the big risk in all this is how much bitcoins/cryptocurrencies will be worth in future.

No one knows's the answer. This is exactly why I chose to build a crypto mining rig instead of just buying bitcoins and altcoins.

The simple fact here is that even if the market crashes I will still have my initial investment in hardware.

This logic is the basis of this entire website. Mine 2 the Max was conceived all because of this idea and my aim with the site is to make sure you build a highly profitable mining rig.

The first thing to being profitable is knowing how much you're going to spend on building a mining rig and how long it's going to take to pay off that hardware before you start making money.

With those facts in hand, let's dive into the costs.

meme robocop - i'll buy that for a dollar



1 Hardware costs



The most basic mining rig you're going to need the following hardware:


PC Components

Motherboard
RAM
CPU
Hard Drive
Power Supply for the motherboard

GPUs

Graphics cards
Power supply for graphics cards

Other Items

Mining rig case/frame
PCI-E Risers
Power cables
PCI-E cables
Power Monitor


Here's exactly what my first mining rig cost me:

Item
Date
Quantity
Price
TP Link Monitor Plug
12/02/2018
1
 ​$48
PCIE Male 2 Male Cables
30/01/2018
1
 $17
Mining Frame
24/01/2018
1
 ​$43
Breakout board
24/01/2018
1
 ​$17
Breakout Board
24/01/2018
2
 ​$28
PCIe Risers
23/01/2018
1
 ​$46
PCIe Power cables
23/01/2018
1
 ​$46
Y Splitter
23/01/2018
1
 ​$12
Server PSUs
23/01/2018
1
 ​$124
Bitcoins (this was fake bitcoins coins from ebay for fun!)
12/01/2018
1
 ​$7
1080ti
26/01/2018
1
 ​$1026
1080ti
23/01/2018
2
 ​$1892
 $ 3,306.00
Nicehash Estimate
 $15/day
T​ime to Profitability
220 days

I highly recommend you use something like excel to plan your cost like the above table.

I made some wise decisions with a few of the parts.

Graphics cards were purchased at RRP - this is a hard task to find cards at "normal prices" but I managed after a lot of wiating - see further down this article for some tips on how to pick them up at a good price.

The next wise decision I had was the server PSU's. The equivalent "platinum-rated" desktop PSU's would have been triple the price.

Here's my guide on server PSU's for mining.

Not so wise decisions were made on PCIe cables. I wanted to build my rig in a hurry and was not prepared to wait for the eBay Chinese shipping even though the price was right. Instead, I did a search on eBay for sellers within my country which was a mistake.

I should have just waited the 2 weeks for the Chinese supplier - this would have cut around $100 on the build price.

Also note that I already had a PC that was capable of running multiple graphics cards so I did not need a motherboard, CPU or RAM - this was a big saving.



2 Software costs



Software costs are minimal. I mine with nicehash which is free mining software, in fact, I think most mining software is free unless you're looking to do something custom or on a huge scale that might require some code development.

nicehash faces



The other software costs to your first mining rig will no doubt be a genuine copy of Windows 10. This can be picked up at rock bottom prices. Microsoft seems to be giving away their OS. You can now pick up a legitimate $22 copy just leave a comment below and I'll tell you where.



3 Electricity Costs



I've written a whole article on power consumption for GPU mining. The TLRD is that you need to be able to calculate your power consumption using kWh (kilowatt hour) that your electricity company charges and factor in around 20kWh (very roughly) to get your daily electricity cost.

Read the whole article if you want exact figures or use the nicehash profitability calculator which has been a big help to me when I was calculating my TTP.



4 Time to profitability



TTP is something I made up, coined the phrase a while ago but this is the amount of time it will take before you are profitable.

Time to profitability.

The way you work this out is by calculating your daily bitcoin earnings minus electricity cost.

Once you have this figure you take the total cost of your hardware and software and divide.

In my rig example, it cost me $3302 to build my mining rig (this is a low figure).

Using the nicehash calculator I'm at present making $15/day after electricity cost.

So $3306/$15 = 220 days or 7 months approximately.

On day 221 I'll be making $15 a day upfront! That's $450 a month. There's no better investment in town - and as mentioned if the market crashes I still have my initial investment locked into the hardware.



5 That secret tip!



GPU's are extremely hard to find at normal price. Everyone wants to try and get their hands on GPUs at the moment due to the profitability of bitcoin mining. Prices have been crazy but there are a few tips you can use to pick up GPU's at almost recommended retail price. ​

As this site is still new there's not that much traffic so I am prepared to tell you how I am buying GPU's at normal prices.

Go direct to the manufactures.

Both Nvidia & EVGA offer there top line graphics card direct on their own website. They both have an option to "notify you" when in stock.

This means as soon as there's stock your instantly get an email stating so and you can pick up a graphics card at a reasonable price.

The other ways I've been buying cards is by using websites like

www.nowinstock.net
www.isinstock.com

now in stock



Both these sites monitor retail sites and will update your when cards become in stock.

The third and final option is setting up a google alert for search terms like "1080ti In Stock".

This can work but I've had limited success.

Let me know if you find alternative ways to picking up cards at good prices I'm always open to suggestions!



6 The tax man, uncle Sam, HMRC, IRS


This can be a real gotcha!

This could be the hidden cost. At the moment I have no way of declaring my bitcoin mining profits - that's because I've kept all the profits I've made using nicehash in bitcoin and other cryptocurrencies.

But there is a nagging feeling in the back of my head that the tax man will eventually catch up and want their cut on my profits. It is safe to say that I am not yet profitable but when that day comes I should really factor this into my costs.

As a rule of thumb 20%-30% is probably a safe tax amount you'd expect to have to pay. The real difficulty the tax man has at the moment if tracing who owns cryptocurrency.

By bitcoin very nature it's a decentralized technology - the only way I can take a guess where the tax man will start is at the exchanges.

You usually have to register your name, bank, and a card with an exchange so when you exchange and cash out of your altcoins and crypto - that's possible when the tax man will intercept your earnings.

What's the way around this?

Well, I've never been one for tax avoidance - you can see that in the footer of this website - I run a registered company in the UK.

If your just a kid in their bedroom or running a small mining operation then there's a good chance your activities will go undetected.

If you pay for items in bitcoin or other cryptocurrencies then this is probably the best way to avoid the tax man completely.

That's why their are estate agents operating in places like London that accept bitcoin didn't you know?


As cryptocurrencies become more popular over time we're going to see coordinated efforts from governments who will attempt to control and tax cryptocurrencies.  At the moment though it's a bit like the wild west with things like ICO's and bitcoin exchanges being hacked.


Don't let this stop you from mining though, just make sure you store your mined coins in a secure wallet.


Conclusion


It's really worth calculating costs before you start out on this journey.  The main reason is your electricity bill and the initial investment.  Your going to take quite a big hit with both these items and you need to be aware of your TTP.  


Without knowing the TTP you may loose interest in mining or just simply give up halfway though the adventure.  Set off on the right foot for success.  This is also a great tip for life in general.  Be prepared!


Thanks for reading!

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SCOTT MILLAR  //  IT Rockstar