3 months ago, I knew very little about cryptocurrencies and dogecoin wouldn’t even exist yet. I had heard about bitcoin before, but I hadn’t looked at it in detail at all. I didn’t know about the big price increase and crash in April 2013, or any of that stuff. But hearing that it went from 30 dollars to 600 dollars(and later all the way to 1150) in 1 year was enough to grab my attention. I was on the fence a few times about trying out mining and seeing the price increase had me kicking myself for not getting on it sooner. So from here on out I would spend the next few months to make sure I would take the time to get involved so I wouldn’t miss another opportunity.
So it begins…
The first thing I did was bought a few BTC for around 650 on Coinbase here. This was pretty stupid of me, as I really had no idea what I was getting into at the time, but I got lucky that I got in before all the hype had completely taken over. But since it was close to half of my savings, it did make me pretty nervous to see it dip down to 500 a few times since then. It has been steady at 800 for a few weeks so it seems like I got in at a decent time.
So I had bought a few BTC, now I wanted to take it to the next level and actually start mining the stuff. I spent a few weeks researching how I would do this, and I saw that BTC was pretty much impossible to mine and all the ASICs were on back order, but LTC (Litecoin) was pretty profitable. With 3 7950‘s, I could get 1LTC a day (As of November 25th 2013). At the time, LTCs were going for 40 bucks each, so this seemed like a great opportunity.
Buying My Mining Machine
So I put together my system with 3 7950′s on Amazon (I signed up for the free Amazon Prime trial so I could get free 2 day shipping on all my stuff), and had it by November 27th. My goal was to make sure that if mining became unprofitable, that I could use the computer to replace my 4 year old desktop, so I put beefier components than necessary so if I started to use it I wouldn’t have to pickup anything else. CPU and RAM can be a lot more basic than what I chose, but here is what I got, some of this stuff is out of stock now:
Video Cards -- Most Recommended for Mining are the 7950s -- Hard to get the other 7950s so I went with these 3x Sapphire Radeon HD 7950 3GB DDR5 HDMI/DVI-I/Dual Mini DisplayPort PCI-Express Graphics Card with Boost 21196-00-20G - Out of stock, you can try the other cards I have listed here.
Ram -- Overkill for mining Corsair Vengeance 16GB (2x8GB) DDR3 1600 MHz (PC3 12800) Desktop Memory (CMZ16GX3M2A1600C10)
Power Supply -- One of the most Efficient Power Supplies, Keeps Electricity costs down -- Seasonic PLATINUM-860 ATX 860 Power Supply
CPU -- Overkill for mining AMD FD8320FRHKBOX FX-8320 FX-Series 8-Core Black Edition
Motherboard -- Has 3x PCI x16 Ports for Cards, so you only need to get unpowered extenders ASRock MB-990EX4 Socket AM3+/ AMD 990FX/ AMD Quad CrossFireX& nVidia Quad SLI/ SATA3&USB3.0/ A&GbE/ ATX Motherboard
SSD -- Overkill but not that much more Samsung Electronics 840 EVO-Series 120GB 2.5-Inch SATA III Single Unit Version Internal Solid State Drive MZ-7TE120BW
Wireless Card -- Wouldn’t recommend this without extenders to move your Graphic Cards out of the Way Cheap Wireless Card w/ High Reviews
Extenders to help reduce heat -- PCI-E Express 16X Riser Card with Flexible Cable - Out of Stock -- Risers may be hard to find now.
The total for everything was 1,646.54. If I went with a cheaper hard drive, RAM, CPU and motherboard I could have saved 150 more. The 3 video cards themselves were 300 each, so the minimum won’t move much from 1400-1500ish for this setup. I would not recommend skimping on the power supply, it is very important to have a platinum rated supply for mining as it reduces overall power consumption of your machine and saves you electricity costs.
Lets Start Mining!
So I had my machine, now I needed to set it up so I could start mining. I installed Linux Ubuntu, set up the drivers and scripts necessary to start mining with CGMiner. I then signed up for a mining pool (At the time it was LTC though), and filled in the stratum details, and off it went. Things were going pretty good for the first week. I was making a little over 1LTC a day off of the 3 cards going at 520khz each. Some people get much more off of 7950s, but after tweaking with the overclock settings and crashing a card a few times, I just left it alone, as I didn’t wish to damage the cards. Going from 520 to 600-700 was possible with certain models of 7950s, but my model was not as recommended for mining and it could put a lot more stress on the card which I didn’t think was worth it.
Starting in the second week, a lot more miners were starting to come online for LTC. The hype wave was catching up to me, I was a little ahead but it didn’t take long for LTC to start dropping to below 1 LTC and even 0.5-0.7 LTC a day. The price of LTC would start dropping soon a well, going from 35-40 dollars to 20-25 dollars, so the forecast for making back my money on the machine was beginning to look bleak. I had to start looking at other options.
Along comes DOGE
Dogecoin was introduced on December 10th, 2013. I started reading about it, and I loved how everyone was using it as a parody for Bitcoin and LTC, as it really showed how ridiculous everything seemed to be. The community was great and everyone was super nice, which is very unusual for an anomymous internet community. It was a great motivator for me to learn more about how cryptocurrencies and scrypt coins worked. Before I just cared about getting my coins, now I wanted to know why and how I was getting my coins.
The cool thing about my litecoin miner, is that it could be used for any other scrypt coins, which includes DOGE, and it was really trivial to switch over. I would just need to change the URL and login details of my launch script and it was ready to start mining DOGE.
On December 19th I started mining Dogecoin. It was the first real coin after LTC that I got into and it was awesome to see me getting 50k+ coins a day vs 0.5 coins a day in litecoin. With the above factors, I knew something about Dogecoin would separate it from the others, in fact here is a quote I made on reddit from over a month ago:
“People keep thinking that there is only room for 1 cryptocurrency to be accepted. But they don’t realize that bitcoin/litecoin are paving the way for any of these currencies to be used for everyday purchases, because after one is implemented, it becomes trivial to implement others. They would mostly piggy back on the same infrastructure.
For me, I am keeping my dogecoin/litecoin as well as bitcoin. A few hundred bucks lost if I am wrong, but worth the gamble I think.
Dogecoin may seem like a fad but I think it also has a lot of other benefits over other cryptocurrencies as well. The psychological factor alone of seeing thousands of coins instead of 0.000003 coins from a few hours of mining will draw more people in. Hell, people are excited for 3 dogecoin tips and offering to do tasks for a few hundred… and are going to all these faucets that offer 5 coins. But in reality this is just fractions of cents, but people are flocking to it. The less seriousness and playfulness of it makes people less intimidated by it as well.
Dogecoin will be #2 I think, unless there are technical factors which will limit its growth over Litecoin.”
I still think this may be true today. Litecoin is great, and is the only reason Dogecoin exists as it currently does, but dogecoin has the advantage of drawing so many people in. If you look at the size of the litecoin(18000) vs dogecoin(43000, and only around for a few months!) subreddits alone, you can begin to understand why I may think this. And shortly after I started mining dogecoin, I decided to make a website dedicated to the coin, as you can see here.
So How Did the Mining Go?
So I paid 1650 for the machine, how much did I make? I haven’t made actual cash per se, as I haven’t cashed out anything, but this is how my Portfolio looks:
So pretty close! If I were to sell all my coins, I would be able to get around 1600 USD for them, minus some exchange fees. So mining pretty much paid for itself. I probably spent an extra 150-200 on electricity though, so this puts the break even point a little higher. By the end of February I should be ahead as long as the price of DOGE doesn’t crash, and if it grows (Which I think it will), I should be even further ahead.
The key is to stay on top on what new currencies come out and be ready to switch off a coin if the difficulty becomes too high. Look for new coins that aren’t just copies of other coins, but coins that have something interesting to offer. Doge was the first successful parody and its playfulness drew in many people. The community is gigantic and super friendly and I expect it to be around for quite some time. The willingness of many people to give out tips really is a great motivator to pull in other people. I hope it is able to keep the momentum.
In case your wondering, the screenshot is from an app I made called Cryptowatch, and you can find it on the google play store here. It is completely free with no ads. It pulls your balances in automatically and shows you the total worth of all your coins and all you have to do is enter your public addresses.