My Attempt at Making Money Mining Cryptocurrency Without a Fancy Miner

Milo
Milo
Mar 29 · 19 min read
Bitcoin sitting with some cash
Bitcoin sitting with some cash
Photo by Dmitry Demidko on Unsplash

What is Cryptocurrency?

The first time I heard about Bitcoin, I rolled my eyes like many others have done. “It won’t last,” I said. “How can you have a currency that isn’t backed by anything of value?” That was way back when it was possible to mine Bitcoin for low cost on a personal computer. As the price rose, I would say, “I guess I should have mined or bought some, but it’s going to crash, so no need to bother now.” The price continued to rise, and I never questioned my decision not to invest in it because I knew the bubble would pop, and it would all come crashing down when people realized it had no actual value.

Coin Exchanges

Now that we have an idea of what cryptocurrency is, how do we get some? For me, my first stop was at the most accessible place, a coin exchange. These are online businesses that provide a digital marketplace for the buying, selling, and exchanging of various cryptocurrencies. Multiple websites offer exchange services with an easy to sign-up process. With the four exchanges I tried, I found that after the sign-up process is complete, the buying and selling can be a bit more of a challenge.

Coinbase

When it comes to dedicated exchanges for cryptocurrency, the most well-known is Coinbase. They are currently the largest exchange in the US. The user interface (UI) is easy to navigate, and they have dedicated apps for Android and iOS. The sign-up process required me to hold my driver’s license to the phone and let the camera take a picture of it. In my case, no matter how well lit the driver’s license was, the app kept denying it, which was frustrating. Eventually, I was able to get my account set up and verified. Funding the account and connecting it to my US bank was easy enough. I deposited and purchased $100 worth of bitcoin.

Bitpanda

Since I am currently living in Europe, I tried Bitpanda, a European company based out of Germany. The sign-up process was simple enough, but it went downhill from there. In order to buy currency, I needed to complete a series of verification steps. The first was signing up, which accomplishes nothing since you are not allowed to buy cryptocurrency just by signing up. The second (bronze) level caps the amount of currency people can buy to €50 a month. All I needed for that was to add a phone number to my account. Since I wanted to fund my account with €100 like my US account, I needed the next level. To do that, they require people to provide ID. This is done through an online video call to one of the verification services they use. I joined the video call with my Irish ID, my US passport, and any other documentation I thought they might need to prove that I am who I am and can legally live in Ireland, work, and bank in the country. The person on the other end was not helpful or friendly or useful at all. When I asked if there was someone else I could speak to, who might be able to help me, she hung up. It is also further proof that customer service jobs will be the first to go when AI gets better. Anyway, I canceled my Bitpanda based on how terrible the customer service person was at the other end of the video call.

Luno

Like Bitpanda, Luno will allow people to sign up for an account easily, they just don’t let you do anything after that. Also, like Bitpanda, they don’t like the idea of an American living in Europe using their service either.

response from Luno of not delivered
response from Luno of not delivered

Kraken

Still looking to buy and sell crypto and fund my account in euros, instead of dollars, I turned to Kraken. The verification tiers allow for a larger deposit and withdrawal amount at T2 than Bitpanda. And the ID verification process with Kraken simply involved uploading a copy of my ID vs a video call with a rude German customer service agent. They use a similar tier system to Bitpanda, where the first tier is simply signing up, but the 2nd tier allows for up to €2000 funding. Since I only wanted to fund my account with €100, I stopped at that tier. The Kraken UI isn’t as user-friendly as Coinbase and even though they offer two-factor authentication, they don’t make it easy to set up and activate.

Wallets

A cryptocurrency wallet is similar to an exchange. In fact, an exchange can also act as a wallet, while wallets cannot necessarily act as an exchange. It is basically the same as the wallet in your pocket, except it is more difficult to use and charges you a fee every time you insert or remove currency from it. Okay, actually, it is more like a credit card than a wallet. There are three main types of cryptocurrency wallets.

Wallet in a grip
Wallet in a grip
Image by Steve Buissinne from Pixabay

Online Wallet

The first is an online wallet with an exchange similar to Coinbase or Kraken previously mentioned. Besides allowing the exchange of currency, you can also hold cash or currency in the exchange as a wallet. Think of it like going to your bank account online and transferring money in and out. That is what this would do. The difference between an online wallet and your bank, however, is that your bank is FDIC insured (US banks) by the government. If someone steals the money out of it, the government will cover the cost up to a certain amount. A cryptocurrency wallet or exchange is not insured like a bank. So, if someone steals your money from it, the government will not cover that loss.

A Mobile Wallet

This is an app on your phone. The primary purpose of a mobile wallet is as a safe storage place for your cryptocurrency. For example, if you mine Bitcoin, you can have the mined coin go directly into a mobile wallet.

Hardware Wallet

The third is a hardware wallet. The hardware wallet is even more secure as it is not connected to the internet, so it can’t be hacked or stolen from a phone. A hardware wallet is usually a device the size of a USB flash drive that stores your private keys.

Paper and Desktop Wallets

There is also a paper wallet and desktop wallet. A paper wallet is an actual piece of paper with your currency information on it. Think of it like the old days when buying stock shares in a company and receiving proof of ownership on paper. And a desktop wallet is installed on your computer.

Mining Apps and Software

The main way to make money crypto mining is with dedicated mining machines such as ASIC miners. However, it is possible to install mining apps on a computer or use small USB ASIC miners. The question, of course, is: can these be profitable when calculating the cost of electricity to run the computer and equipment, compared to the currency earned?

Minergate

Minergate is a program that can be installed on a computer to mine different cryptocurrencies. Minergate can also be installed on 32bit Windows systems, so I installed this on my netbook and my 64bit gaming laptop. When downloading, my computer’s antivirus software flagged the program, so I had to disable it during the installation process, then re-enable it after the program was installed. When setting it up, the program lets people select from the coins to mine if they want. Or users can let it select for you. Right now, the most profitable coin on the app is Monero. And like me, if you use your computer at the same time, it gives you the option of selecting the CPUs for mining so you can put it on a lower number if needed while using the computer and switch it to a higher setting if you are letting it mine while not using the computer. I was also able to install Minergate on my old 32bit netbook, which was handy as I could just plug that in and let it mine 24 hours a day.

NiceHash

NiceHash is similar to Minergate in that it is a software program that can be installed on a computer to mine different cryptocurrencies. This one seemed to get the better reviews of the two on Reddit. However, it can only be installed on a 64bit system. The installation process and the setup was longer, as it needed to scan and benchmark my system. And I received a few errors while it was benchmarking that I had to fix and work past. Then once installed and running, they sent an update that started giving me an error: No compatible devices, and I had to find an older version and switch back to get it to work. After struggling to get it working, it seemed to mine more or a higher value of coin than Minergate; however, it wasn’t long before I began having issues with the installation and had to follow a long list of troubleshooting steps to get it to work. Users don’t have the option of selecting the coin to mine, it will do it automatically. Also, like Minergate, I had to disable my antivirus software to get it to install.

Script Mining

Script mining simply involves downloading an application that runs a command to mine cryptocurrency using the GPU of your computer. For this, I went with one called ccminer, an open source miner that mines Litecoin. This involved downloading the script, editing the wallet info, and directing it to the mining pool I decided to use. I also used a similar process to mine some Zcash. The installation process and resource usage were the same between the two, so I ended up uninstalling it to focus just on Litecoin.

Dedicated Hardware Miners

These are now considered the best way to make money mining Bitcoin because of the hashrates and electricity cost. Hardware miners, referred to as ASIC miners, are machines that have one purpose, and that is mining cryptocurrency. Multiple companies build dedicated miners. Think of these as devices like computer-sized servers that can be set up and let run continually to mine Bitcoin or other cryptocurrencies. The catch with large ASIC miners is they have a high upfront cost.

Cryptocurrency mining machine
Cryptocurrency mining machine
Mining setup | Image by Лечение Наркомании from Pixabay

USB Stick ASIC Miner

I do not have a good location in my apartment or studio for a large ASIC miner, and I did not want to spend the money on the upfront cost. However, wanting to try a dedicated ASIC miner, I ordered a Scrypt USB-Stick Miner for mining Litecoin from a company called futurebit. The miner cost around $65. The nice thing about it is that it is a small device that plugs into the USB port on my laptop. Also, since it does the mining work, my computer isn’t slowed down when it is running.

Phone Apps

When I first started this process, there were a few apps available for phones. These have all been shut down by the app stores. I would not recommend trying to find one at this point as from what I can tell, any apps offering to mine bitcoin on a phone are not going to return any useful results.

Other Options for Making Money from Crypto

It is possible to make an income from Cryptocurrency besides mining it. This generally involves receiving it as a currency or buying and selling it.

Robinhood

Robinhood is known as a stock trading service and is not necessarily considered an exchange. However, they do offer the option of buying and trading cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and a few others. You can’t send cryptocurrency to people or use it as a wallet as you can with Coinbase and some of the others. But if looking to simply buy and sell cryptocurrency, they offer it as a service with the bonus that they don’t have the fees of other exchanges similar to the no-fee stock trading the service offers.

Receiving Payments in Cryptocurrency

Since Bitcoin and the others are a currency, you can receive it as a payment or gift from others. For my business, I offer the ability to purchase gift vouchers on the website using Bitcoin. The process was reasonably easy to set up with a WordPress plugin connected to my Coinbase account. So far, no one has bought a voucher with cryptocurrency.

How Much am I Making

It has been around two years now since I started this dive into the world of cryptocurrency, and I’ve found a few methods are better than others when it comes to making money.

Litecoin Mining

Using a mining script on my laptop with the previously mentioned graphics card, I am averaging 0.000000551461 Litecoin per hour. I rarely use this method as it is resource-heavy for my laptop. This is making me about 0.00008693 USD per hour when it is running. Less than a penny and totally useless, as it slows down my machine, making working difficult. The lesson here is, you can’t mine most cryptocurrencies using a standard computer graphics card anymore. And my Moonlander 2 is worse at recouping the cost, averaging around 0.00005900 per hour. To date, I have made $3.52 in Litecoin using both these methods.

Minergate

This one probably runs the most as I have it set on an old netbook that I don’t use much and can set in the storeroom of my business and let it run. On average, I am mining 0.00000071367865USD per hour. Out of these methods for mining crypto, Minergate has been the one I’ve used most since I can run it on both my netbook and occasionally on my laptop. To date, I have made $1.22. Minergate has provided me with the least return on investment, even though it is used the most.

NiceHash Miner

Yes, NiceHash is a pain to install. I received errors that I had to work past, my antivirus program doesn’t like it, and it is resource-intensive when running in the background. Having said all that, NiceHash has been the most profitable of the apps I’ve used. I made $3.74 so far using this one, averaging $0.05 cents per hour when running it. I haven’t received the actual payout yet because of the threshold needed, plus I don’t run it often due to resource constraints, so we will have to wait and see how the payout process goes.

Robinhood and Coinbase

Following the same strategy used for buying and selling company stocks, of buy low and sell high, I have purchased and sold Bitcoin, Ethereum, and Litecoin, which has resulted in a total income of $22.61. But I should add that the average buy and sell amount has been pretty low, averaging a buy of around $35.00. I still have that feeling that the market will crash when it comes to cryptocurrency, so the largest single investment I’ve made was a buy for $200, which I then sold a couple of days later for $206.62. Having said that, if I had been more daring and added an additional zero to that purchase, I would have done much better when selling.

Trying to Get my Money Using ShapeShift

Now that I have mined a bit, it is time to trade my Bitcoin for dollars. I logged into my Jaxx Liberty Wallet to see that I had $25.80 worth of Bitcoin, plus $3.50 in Litecoin. The amount varies depending on the value of the currency, which fluctuates. The mining apps I have are set to go to the Jaxx Liberty Wallet to store my currency. I already have a phone, so there was no additional cost, such as I would need with a hardware wallet.

My feedback to ShapeShift

Overall

After all this time and energy dabbling in cryptocurrency, how did it all go? Not very well, actually. After spending $65 on the Moonlander 2, I have made only a fraction of that cost back.

Photo by Annie Spratt on Unsplash

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Milo

Written by

Milo

Milo Denison is a former office monkey, a freelance writer, and his most recent book “How to Manage Your Manager” is out now www.milodenison.com/books

The Capital

A publishing platform for professionals in business, finance, and tech

Milo

Written by

Milo

Milo Denison is a former office monkey, a freelance writer, and his most recent book “How to Manage Your Manager” is out now www.milodenison.com/books

The Capital

A publishing platform for professionals in business, finance, and tech

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