How I wish I could have mined!

A while ago, there was a service called Bitcoin that started. As anything that deals with money, I was a bit cautious about jumping in. However, I decided to take the leap as it is around, and there was only one major security breach.

For those that don’t know, bitcoins are an electronic virtual currency. Merchants and people can use them independently of the banks, and therefore independent of transaction fees. One could of course exchange it for real currency which can be deposited into a bank account, or Paypal. However – there are exchange fees, and one is responsible for any taxes due to it.

One could offer products or services for bitcoins. However, I don’t have that ability. Instead, I was thinking of mining my bitcoins. This involves the PC to perform very complex mathematical computations where a person could never accomplish. However, the sad news is that neither can my PC. This process is called mining.

It’s not the CPU that’s the issue, but the graphics card. See a basic Sempron CPU that is only 32bit, and a single core can in a mining PC. The computations are so complex though that the CPU is actually incapable of processing them in a reasonable time frame. A graphics card that inserts into a PCI-X16 slot will be needed. This will mean that it is very unlikely a notebook will be a mining PC.

So after frustration at the failure, I decided to do some research on what will be a good budget mining rig. Keep in mind, that I only get about $700 per month, and most of that money goes to my bills. I do not see this ever coming to fruition, however – I will be more than happy to take donations.

The Motherboard

The motherboard is important. This is the nervous system of any PC. I do not need a super powerful $300 motherboard. I just need a relatively new one with at least 1PCI-X16 slot, and 1 PCI slot. I will also assume that the motherboard will have integrated NIC (preferably 1GBPS), a few USB ports, and the ability to boot and install an OS through a thumb drive.

The Zotac GeForce 6100 Micro-ATX motherboard will meet those needs. There will be two DIMM for up to 2GB per DIMM. There is also an AM2 CPU socket, 2PCI, 1PCI-X16, and 2 SATA ports with support for RAID 0,1. There is a 100MBPS NIC, 2 PS/2 ports, 4USB 2.0 ports, and 24 Pin Power Supply Connector.

I personally find it stupid of manufacturers to still include a PS/2 port. There is built in NVIDIA video capabilities, but this will be disabled when the VRAM card is installed. This on board video is not sufficient.

The CPU

The CPU is not as important. It is of course needed to run the OS and programs, but for Bitcoin processing, the CPU will be on the sidelines. As long as the CPU is supported by the OS, that is all that matters. For this, I will choose the AMD Sempron 145 CPU. It is a 32 bit single core 2.8Ghz CPU. My notebook with the exception of the speed is more impressive than this. However, again – it will take the sidelines for most of the time. I will assume that the CPU package. The fan is also included which in my opinion, all fans should be with CPUs.

Memory

Memory like the CPU is not needed much. Even the video cards memory is not needed. However, me not liking to waste my money, I will invest in two Kingston ValueRAM 2GB memory DIMM. This will fill both slots with the maximum amount of memory. It will lessen the need to open the system.

Case

The case is not important for most factors, but keep in mind, that the miner will be running that video card over time. This will generate heat which is a computer’s worst nightmare. A case with good air flow is important. The Apex TX-381-C mini-tower will serve those needs. It has two 3.5” external bays, two 3.5” internal bays, and four 5.25” external bays. Most of these bays will not be used. Empty bays should help provide for good air flow.

Power Supply

The power supply is important. It must run the motherboard, memory, and hard drives. And most importantly, it must be sufficient enough to run the video card. A Cooler Master Silent Pro 1kw power supply will be used. With 1kwh, it will be enough to run everything effectively.

Hard Drives

This is a tricky one. As with the CPU, the hard drives are not important. Something to hold the programs, and some cache will be good enough. The wallet shouldn’t demand much storage, but I will assume worst case scenario – 1GB. Most OSes are around 20GB.

However, for preference, and the consequences of drive failure being high (as I could loose all of the bit coins that are mined), I will do a couple of things. First, I will get SSDs (Solid State Drives). Your smart phones, and many media players (most famously – iPod Touch ©) all use SSD. The ones for computers are just in the form factor that is standard for notebook PCs. 

I will get two 60GB SSDs with an adapter so they will fit in a 3.5” bay. Both SSDs will plug into the SATA ports on the motherboard. There are a few reasons I will choose SSD. First, they are essentially memory chips. A computer that may boot in 2 minutes with a mechanical hard drive will boot in about 20 seconds. This means if the computer has to be rebooted, it can get back to work quickly. Update installations will also happen much quicker.

I also chosen the mechanical drives as they are less likely to fail, or be damaged. In a mechnical drive, the head overs over the plate, but can never touch. If they do, that part of the drive, or even the whole drive is damage. The distance between the two is about the width of hair. No moving parts means less points of failure.

And since there are no moving parts – this also means much less heat is generated. This is a good thing. Keep in mind that the video card is expected to perform as if it was playing a high end game 24/7. It can be easy to now understand why heat management is so important.

Now, I will not have just one, but two drives. While it might be cheaper to buy a single 120GB SSD, the issue is not capacity. Both drives will be connected to function in a RAID 1 format. This means the controller will write the same data at the exact same time to both drives. Think of it as instantaneous backup with no versioning. Most RAID controllers can also send an email notification if a drive fails, and I won’t see why this one won’t.

So, if one drive fails, I receive a notification, and make a priority to replace it. Once replaced, the RAID controller will copy the information to the new drive, and things are back and running as normal.

Media Card Reader

An external card reader will allow me to keep the case as empty as possible. It also allow me to use it with my current or future PCs when the need arises. The reader will use USB 2.0 which  is sufficient. The goal of the reader is to offer a means to back up the wallet. If the wallet is lost, so is all of the bit coins.

Operating System/Programs

While I am not familiar with Linux, it is much cheaper than Windows. For my choice, I will be choosing Ubuntu. Ubuntu is supposed to be very user friendly, especially for someone coming from Windows. While I will not be using this as my primary PC,  I should be able to use it if it needed to be managed. Being Linux, I will save about $150 which will justify the RAID set up. If Ubuntu doesn’t have Anti-Virus, I will make sure I can get one. Since the system will always be connected to the Internet, it is more vulnerable.

My main back up concern will be the Bitcoin wallet. For that, I will use Ubuntu’s free service called Ubuntu One. It will provide 5GB of online storage. I will of course also need a Bitcoin client as well. In addition, I will want a remote desktop system. This will allow me to use my primary PC to log into the miner without me having to borrow a keyboard, mouse and monitor.

Protocols

This will be a miner. It won’t be a server. With that in mind, it is not designed, nor truly intended to run 24/7. With that in mind, the system will run most of the time with an exception only when it needs physical maintenance, or when I am not home. It will also be rebooted daily. By rebooting, it will refresh the memory.

Assumptions

This is a very low end miner. I seen references of miner having 4 high end graphics cards – each with $300 cards. This system however will be a weakling. I will assume that this system including any downtime it will have will be able to churn 1.5 coins per day. This will be 45 coins.

The bit coin is probably relatively standard. It is expected that as time goes on, mining will be harder. However, the issue will be when converting to currency. A high mark will be 1BC = US$15.  A low mark maybe pennies. One can reasonably expect $5 at today’s market standard.  This could mean an extra $245 per month if the coins are cashed in.

Most likely though, I will not cash the coins in regularly. The reason of why is this could endanger my SSI, and affect my Section-8. As for SSI, assuming that I can account for the miner PC to depreciate to 1 year, and the first $40 doesn’t count, I can write off the first $100. This will mean that SSI will deduct $75 from their portion. I will have to pay an extra $80 with my rent. This will mean that if everything works the way it should, and at a steady pace, I will earn about $90 extra a month. With this assumption, I will assume no income tax as it will be less than $3,000 per year.

What I will do instead is the bit coins will be kept in the wallet. Once I earn $500, it will be taken and used to set up a savings account for emergency funds (such as if the dogs got injured). Future production of bit coins will remain in the wallet which will only be converted to cash when something is needed. One example is if the PC I am writing this entry breaks down, and need a replacement. The bitcoin can be converted and will be used for that.

Power Demands

This will be pointless if the PC uses more power than what the coins are worth. It will be like someone giving you $1, but it costs you $1.50 to get it. And while I do not know exactly how much power will be drawn, and it has been a while since I had a desktop, I will do my best.

I will assume that the PC itself will consume about 100 watts. This is typical of most PCs. However, keep in mind, I have a lower end CPU which will use less power. I have no optical drive, nor do I have any mechanical hard drives. The inside of the PC with the exceptions of the fans has no moving parts. I will want all of the fans within the PC active considering the demands that will be placed on the graphics card. Computers nowadays are designed to shut themselves down or go in hibernation when the interior temperature gets too hot. If this happens a lot, I will have to add an extra fan in the PC. Nonetheless, I will assume 100 watts, and that is a high assumption. My notebook PC peaks with 65 watts.

The graphics card will demand more electricity. I will expect the graphics card to use another 100 watts of electricity. All together, this will be 200 watts. And while my power supply is rated for 1kw, this will be in the case I upgrade the video card to something that will demand more power.

So, now we figured an average max of 200 watt hours. There are 720 hours in a month. This equates to 144,000 watt hours or 144kwh. I pay about 15¢ per kwh which is an extra $21. This may start to not seem profitable, but the idea is not to make a big profit, or get rich quick as my only source of income, insurance, and rental assistance will be jeopardy – but the goal will be to have a means of income in the event that I need an emergency fund, or need to acquire something that will normally be out of financial reach such as a replacement PC if needed, a high quality backpack, or new phone. The financial loophole is as long as it’s not cash, it can’t be cash.

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