In 2016, Mark Setlock, who was only 14 years old, heard about cryptocurrencies through a cousin of his who was an entrepreneur.
“I was starting a business and when I bought their products, I actually got a discount if I bought in bitcoin Setlock says of his job selling batteries.
His cousin did not understand at the time what a cryptocurrency was, but he wanted the discount, since he bought in bulk. Being young, Setlock didn’t think much of it. It was not until 2020, when his friend asked him for help setting up a mining team, that he became interested in the crypto world.
Setlock was studying at the University of Michigan at the time and his friend invited him to his dorm to help him set up an Ethereum mining rig. Ether mining, like other cryptocurrencies, supports the Ethereum blockchain by processing transactions and producing blocks. In exchange for supporting the network, miners get rewards in the form of ether. The payment can be profitable if the profits exceed the costs of hardware and electricity.
“He noticed that the dorm offered free electricity,” says Setlock. “So he bought a couple of cheap graphics cards and built a mining rig himself.”
The setup consisted of three AMD 580 graphics cards, which were limited in capacity. Setlock remembers that they barely earned a couple of dollars a day.
“He didn’t take it too seriously. And he ended up having to move and couldn’t transport his mining equipment, it was too big,” explains Setlock.
Since he had helped his friend set up the platform, he was able to keep it. Setlock took the opportunity to keep using it while he kept improving it to be more profitable.
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“And, of course, I took this opportunity, especially since I make content. I think it would be a great idea to create videos,” says Setlock.
He runs a TikTok account with the username Financeunfolded, which accumulates more than 787,000 followers. His videos mainly focus on investing and saving, including his experience with cryptocurrency mining.
By December 2021, he had already transported the bulk of the mining equipment to his studio apartment, but thought it was not worth starting if profits remained too low. So he invested in new cables and some higher performance graphics cards.
Getting new graphics cards wasn’t easy at a time of chip shortages. So he resorted to marketplace of Facebook, a second-hand platform in which he was able to climb little by little by buying additional cards.
He explains that he bought another two second-hand AMD 580 at 230 euros each to have a total of five. He also bought two Nvidia RTX 3070s for €740 each, one Nvidia RTX 3070 Ti for €650, and three Nvidia RTX 3090s for €1,750 each. These last three models were brand new and unopened, but they were also a few hundred dollars over retail value. In total, these improvements cost him 7,800 euros. He says that he used the money earned from being a content creator on TikTok to pay for these upgrades.
“I was happy to pay the premium price to get my hands on quality equipment that I knew I could trust to run smoothly and have it right away,” Setlock tells Business Insider in an email. “Also, since I still have all the original boxes and packaging, the resale value of my GPUs will be higher in case I want to sell them in the future.”
Below you can see a table that breaks down what each card can earn according to data from the Minerstat website as of April 14, and based on the trading price of BTC of about $40,046.37 and ETH of about $2,999.35. These fees may vary based on the trading price of bitcoin. The latest figures can be viewed by entering the GPU hardware model number into the Minerstat calculator.
These figures match Setlock’s daily earnings, based on screenshots sent to Business Insider, of more than 27.39 euros per day or 822 euros per month. Setlock does not earn its rewards in ETH. You are connected to a pool called NiceHash, which mines in ether and pays you in bitcoin because that is what you want to hold for the long term. NiceHash charges a 2% commission.
He also bought risers, which are cables that allow more GPUs to be installed on the motherboard.. And he added a second power supply because not all GPUs could run on a single power supply unit.
As for the electricity bill, the team uses about 213 kWh a week, according to Setlock, citing data from its smart plug that measures energy consumption. This represents an average of 30.43 kWh per day and, at a rate of 0.13 euros/kWh, the estimated cost of using electricity is about 3.94 euros per day or 118 euros per month. According to account to Business Insider, He offsets some of these costs by harnessing the heat the equipment generates in his 120-square-meter apartment.
“In winter I was able to heat my entire apartment with the graphics cards thanks to the heat generated by mining cryptocurrencies. So I didn’t have to use the heating,” says Setlock. “And also, if the graphics cards got too hot and I needed to cool them down, I could just open the window because my mining rig is right next to the window. And that cools the mining equipment for free, without having to pay more for heating or cooling.”
Right now, ether miners are preparing for the migration to proof-of-stake consensus (proof of stake) which will make the platform faster and safer. But this means that mining ether will no longer be tangible. In preparation for that transition, Setlock recently changed his pool to HiveOS because it allows you to mine other altcoins. You can also avoid the 2% commission charged by NiceHash because this pool allows the user to connect up to four computers for free.
“I’m not too worried because I’m only going to mine the second most profitable cryptocurrency Setlock points out. “And I can even start mining some altcoins which are obviously higher risk, but could be much more profitable than mining a blue chip coin.”
While other miners are selling parts of their ether equipment, Setlock says he is buying it at cheaper prices to keep building his own so he can keep mining altcoins.
Mining options with a lower barrier to entry
In February he decided to try helium mining, which uses proof of coverage (PoC) instead of proof of work. This means that rewards are given for checking coverage and confirming the location of other access points in your vicinity. These rewards are paid out in the blockchain’s native crypto, HNT.
“It’s a much lower barrier to entry, much cheaper to get, and I like being able to diversify what I’m mining,” according to Setlock.
A helium miner is not as expensive or complicated to install as an ether miner. There are about 20 manufacturers that sell models. Depending on the region in which the device will work, the manufacturer will vary and so will the price. Retail prices range between 370 and 740 euros.
Setlock turned to Facebook Marketplace, where he paid €695 for a Bobcat 300. The Bobcat 300 retails for around €400, but the retailer shipped them in six to eight months. He was willing to pay the highest price to have it sooner. He calculated that the extra six months of mining would make up for the extra cost.
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“In my opinion, paying the premium price for the helium miner to get it up and running faster was definitely worth it,” Setlock tells Business Insider in an email. “Waiting six months at the rate of 2.80 euros per day would mean 500 euros of lost earnings when the helium miner itself is sold for 400 euros. Also, it was important that I get hold of it quickly so I can make videos related to the miner for my followers.”
The quiet little miner connects to an internet router with an ethernet cable. The device should be placed next to a window so that its antenna is not blocked.
The drawback is that this operation is difficult to scale because the miners cannot be placed very close to each other. This means that only one device can work in each household. And the benefits per unit vary greatly depending on the number of other devices you’re monitoring, as well as the strength of the antenna and the surrounding terrain. Barriers such as buildings or mountains can affect the signal and limit the device’s ability to achieve maximum performance. Setlock lives on a high floor and believes this helps his antenna’s range.
Setlock’s helium miner earned him about 2.1 HNT in the last two weeks, a screenshot of his earnings shows. As of Friday, HNT was trading around $20.52, according to CoinMarketCap. These earnings may fluctuate in dollar value based on the trading price of HNT. At its highest point, in November 2021, it traded at $52.71.
The third miner Setlock experimented with comes from a project called PlanetWatch. It’s a small device that tracks air quality and sells that data to weather companies. Reward the holder with PLANETS tokens. The miner sells for about 556 euros and requires an annual license of 250 euros.
“This is honestly a high-stakes project. And what it does is aggregate air quality data with the goal of selling it to weather stations, governments and researchers,” Setlock says.
I have been using this device for about a month. Until now, he has won an average of 46 PLANETS per day, based on screenshots of Setlock’s earnings for the first week of April. PLANETS was trading at about $0.08, as of Thursday, according to CoinMarketCap. This means that he was potentially earning about 3.41 euros a day. However, he points out that the rewards fluctuate and can sometimes reach 6.48 euros per day.