Here’s the latest update on my Litecoin Mining Rig…
Having successfully built the rig and known that all the components were working, it was time to install an operating system. Since you can’t transfer Windows 7 hard drives between PCs and I didn’t have a spare eSATA hard drive lying around, it looked like running Linux from a USB key was the way to go.
This was not nearly as easy as I had expected.
Linux Install Problems
I found this set of instructions on how to install Linux on a PC specifically built to mine coins.
Now, it’s over a decade since I played with Linux and what little I know about it at the time I have long since forgotten. So I was essentially a newbie installing this OS for the first time.
Dumb mistake #1: I didn’t follow the instructions to the letter. Why? Because reference is made to old versions of Xubuntu and CGMiner. I figured I just be able to substitute the current editions of both. A huge mistake that literally cost me days with reinstalls of Xubuntu, reinstalls of the video card drivers, etc.
Dumb mistake #2: I copied the ISO image for Xubuntu onto a DVD and tried to boot the mining rig off that so I could then install Xubuntu onto the USB key. I couldn’t figure out why the OS wouldn’t boot into trial mode. It juts wouldn’t boot. Yes, I’d copied the ISO onto the DVD and not burnt the image onto the disk – a fundamentally different process.
Of course, I started out with the latest 13.10 edition of Xubuntu. Turns out this has problems where mining is concerned. I don’t know what those problems are, but I could not get this version of Xubuntu to work with the cgminer app at all.
I even tried going over to Ubuntu (not Xubuntu) and running that. V13.10 of it wouldn’t work with cgminer either. It seemed like every time I ran through the OS install process, followed by the video card driver install, that I’d end up with a different error each time when trying to run cgminer.
I think, in all, I did about 15 such reinstalls over several days. Frustrating to say the least.
Back To Square One
It was at that point that I decided to go back to Square One, and follow CrytoBadger’s install instructions to the letter, even if he was referring to much older versions of software in those instructions.
First up was downloading Xubuntu 12.10 from his page. When I installed this, I found that the desktop background was different to that in the 12.10 distribution I’d downloaded from elsewhere. There could well have been other differences that led to the problems I’d continually encountered.
I opted not to download updates over the internet nor install the 3rd party software offered as an option during the install. And I stayed with the default option to erase the contents of the USB key prior to install.
After Xubuntu was installed, I installed the video drivers as per CryptoBadger’s instructions. What’s not stated in those instructions is how long this process takes – anywhere from 5 to 15 minutes depending on a number of factors. Not knowing this at the outset during my initial installs, I’d assumed that this process had crashed as all that was happening on screen was a cursor flashing at me. I killed the job and tried reinstalling. I could never get a successful reinstall of the drivers after killing the process. Not being familiar with Xubuntu, I ended up having to reinstall it to the USB key in order to clear everything out prior to video driver reinstall.
Once all that was done, I downloaded cgminer 2.11.4 from CryptoBadger’s link. Now this version is a full compiled, working version of the software. V3.7.2 is the last edition to support the scrypt algorithm (used to mine Litecoins; Bitcoin used the SHA256 algorithm). I’d wondered why the instructions hadn’t been updated to refer to V3.7.2 and I found out why. There’s no compiled (built) version of cgminer between V2.11.4 and 3.7.2. Fully compiled versions only reappear for later versions.
Also, CrytoBadger provides no instruction on how to upgrade cgminer to V3.7.2. Looking online, it’s not a simple process. It requires a lot of stuff (dependencies) to be downloaded before the software can be compiled.
So I was stuck with fully compiled V2.11.4 edition.
I didn’t bother installing SSH or CURL as I’d be using the rig directly rather than remotely.
Next up: checking if cgminer would detect my GPU.
And for the first time, I saw the expected results. So this build was working. Finally.
I was already signed up with mine-litecoins.com – a Litecoin Mining Pool – as I’ve been doing Litecoin mining on my regular PC during the day. My nVidia GT 530 card is pretty low-end and can only manage about 30 Kh/s (30 kilo hashes per second). I run the cudaMiner software to use that card rather than cgmniner. That crappy hash rate is what prompted me to get the Sapphire R9 280X video card in the first place. And because that card wouldn’t work with my main PCs motherboard, that in turn prompted me to buy all the components to build a dedicated mining rig.
Anyway, cranking up cgminer using default settings, I saw that it connected to the mining pool and did indeed start hashing.
So, success at last! Finally, after 2 months of trying to get a system to mine Litecoins, it was now finally crunching numbers.
Except the hashing rate was low. My video card should run at 700+ Kh/s but mine was averaging 550 K/s ish. Sometimes, after a reboot, the card would hash at about 380 Kh/s, nearly just half of what it should be capable of.
I looked around online for configuration settings to see if I could get a better performance out of the card. Following one reboot, the rig became very unresponsive, like Windows gets when it runs low on memory. All repeated reboots gave the same crappy performance.
Yes, it was time for another round of reinstalls.
This time, desktop responsiveness was good again. I’ve no idea what happened to cause the slowdown.
After reinstalling cgminer 2.11.4, I changed some of the software’s settings. The card now hashes at 600-620 Kh/s. Still not as high a figure as I’d like.
It was time to crunch some numbers and see what kind of profit this rig would give me. I had crunched these numbers before committing to buying components to build the rig, and those figures suggested I would turn a profit. Not a huge one, but maybe about $1,500 over a year.
That, however, was before I had to send the video card back for testing (and having to pay for shipping) and buying a PC case that turned out not to be of any use for this project. There was also the currency differential between the Euro and Sterling to account for (when buying from Amazon UK), and some additional shipping charges for components not shipped directly from Amazon’s warehouse.
Electricity in Ireland is comparatively expensive. While a kilowatt Hour costs about $0.10 in the USA, it costs €0.19 here (about $0.27), so nearly three times as expensive. All in, with all costs included, my rig has cost about $1,010 (I use dollars as the online calculators all use that currency).
Back in December when I first looked at running this experiment, Litecoin was close to $30 per coin. Today, it stands at just over $21 per coin. So the currency has lost about a quarter of its value in the last 8 or so weeks. That affects profitability.
Litecoin Difficulty (a factor that determines how difficult it is to successfully mine new coins) has risen sharply since early December 2013 until Jan 23/24 when it dropped significantly, and is now rising again. It’s seen another couple of minor rises and falls since then but is currently still lower than it was at the beginning of January. However, it’s still quite a bit higher that it was when I first crunched the profitability numbers on this.
So all these factors made Litecoin mining less profitable than it had been 2 months ago.
Here’s what profitability looked like in early December (I’ve had to use estimated values for some of the figures). I assumed 350 Watts for running the R9 280X in my main PC and the Hardware Cost was simply the cost of the video card itself.
So you can see I was looking at breaking even in about 4 months. Estimated profit after a year was $1,113.78 (not shown in image). Factoring in the cost of the additional hardware I had to buy to build the rig, this is what December profitability indicated:
Because the hardware costs doubled, the break-even time doubled as well, so I was looking at about 7-8 months before I would be into profit. This time, profit would only be $603.78.
Now, let’s look at today’s values (Feb. 4th, 2014). Running my rig, I estimate it’s running at about 420 Watts, higher than my original 350 Watt guesstimate. The hash rate is also down from a guesstimated 700 Kh/s to 610 Kh/s.
First thing that stands out is that it will take almost 400 days to break even. Basically, what that means, is that I won’t recoup the hardware and electricity costs within a year. If Litecoin goes up in value during the year, then I will be in profit.
Note that all these figures are based on running the mining rig 24/7 for a year. In practice, that won’t happen. That would double my electricity bill each month and, unless I can cash out Litecoins at a better rate than $21/coin, that electricity bill will have to be paid for by real-world money.
A Failed Experiment?
So a failed experiment? Not necessarily.
It all depends on whether Litecoin will rise in value or not over the year. If Litecoin tanks, then yes, I’ll be out of pocket to the tune of a couple of thousand dollars (electricity costs included). If Litecoin rises significantly in value, like Bitcoin did last year, then I could be sitting pretty 12 months from now.
What my gut feeling tells me is that Bitcoin has pretty much stabilized. Yes, it dropped in value when China intervened in its use but it’s steadily climbed back in value. And now it’s been bolstered by the likes of Overstock saying they’ll take payment in Bitcoin.
I think Litecoin will be pegged pretty steadily to Bitcoin over the year. There’ll be some fluctuation but I think Litecoin’s value will be pretty dependent on Bitcoin’s value. I don’t see any meteoric rise in Bitcoin’s value coming – I think things have probably stabilized for the most part. So Litecoin’s value won’t see a meteoric rise this year like Bitcoin saw last year. I’m no financial expert and this is all finger in the air supposition.
I suspect that the crypto-currency gold-rush is over – it certainly seems to be for Bitcoin and we’re unlikely to see 7,000+% rises in value again. Bitcoin millionaires were certainly created in the last couple of years. I just don’t see that happening with Litecoin.
I could of course, be wrong. And I hope I am! The banks have screwed my retirement fund and hopefully crypto-currencies will give me an out instead. In any case, while my mining rig won’t be on 24/7, it will be on for a good percentage of the day.
Yes, I do know that right this instant is the best time to mine Litecoins as things will get progressively more difficult as time goes by. But bills still have to be paid with real-world money and that’s not in so abundant a supply that I can afford to throw money away on converting electricity into Litecoins with abandon.
So the experiment is ongoing…
Filed under: Litecoin Mining