It was roughly 30 ºF outside in Durham, North Carolina, on a recent day in late November, but Rahdi Fakhoury’s 1650-square-foot house was so warm he left a window open a bit. The heater he was using? Two Bitcoin mining machines and two Ethereum mining machines.
Fakhoury, 38, is part of a contingent of people who say mining bitcoins at home can be profitable while providing free heat. As the cryptocurrency price (BTC-USD) skyrocketed and hit $11,000 last Wednesday, he woke up in a heated room and found his machines made $60, or 0.0026 bitcoin while costing $6 in electricity, in a day, according to calculations on whattomine.com.
Like gold, the quantity of bitcoins is finite. Out of 21 million bitcoins, 16.7 million have been mined as of November 2017. In this digital “Gold Rush,” miners no longer need to travel to California or use shovels to dig into the ground.
People like Fakhoury just put printer-shape ASIC mining machines in their garages and basements and plug them in; then, codes running on the machine create new bitcoins using a complex mathematical and computing process, which also generates a great deal of heat. (Just like how your laptop sometimes overheats, but much more.)
Fakhoury now runs two Bitmain S9 bitcoin mining machines in a 5-foot-tall box in the basement, and he plans to add one more when it gets colder. Each machine consumes about 1400 Watts per hour, similar to an average space heater. The average electricity cost in his town is 0.06 per kWh, and last month his electric bill was about $450. It’s $250 more than when he used a heater, but he says the expense has been offset by the proceeds from the bitcoins he had mined.
“I haven’t paid for heat for three years,” Fakhoury said. “I would suggest people put half of their bitcoin investment into mining and half into purchasing the coins. That way you hedge yourself in both directions.”
In 2015, he started mining after spending $1200 on mining machines. Fakhoury says it wasn’t profitable back then since the price of bitcoin was just around $300. Besides bitcoins, he also runs graphics cards to mine Ethereum (ETH-USD), another red-hot cryptocurrency which saw its value increase 5000% this year.
Home mining is not for everyone
Despite the free heat and potential profit, mining bitcoins at home is not for everyone. For one thing, it’s a difficult process to set up. Noise is also a big issue — it bothers Fakhoury’s wife, even though the former building worker has added a filter to the box hosting those machines. In summer days, it could cost too much too cool them down so he stops running them when it’s over 90 ºF.
Also, getting the machines, which easily cost more than $1000, could be tricky. Many people buy them from Bitmain — the world’s largest manufacturer of bitcoin mining equipment, which only accepts Bitcoin Cash, a derivative of bitcoin. It takes months to receive a machine due to recent high demand. The equipment is also available on eBay, where it’s marked up by thousands of dollars.
Those who don’t want to mine at home may opt for remote mining, which means they pay a fee for the hosting company to cover maintenance and electricity costs. They may also choose cloud mining by purchasing a part of the mining power of hardware owned by a cloud mining services provider. Genesis Mining, for example, runs large-scale mining farms in Iceland and sells mining power by contracts.
After doing the math, Aaron Duell, an IT worker from Allegany, New York, said he believes mining at home brings more profits and gives him more control than his other options. He just spent $1700 on his second bitcoin mining machine, which he expects to be shipped from China in late January. Adding to his current machine which makes about $800 a month in good days, he plans to use both to heat his garage this winter.