Should You Buy Used Mining Rigs?
Should You Buy Used Mining Rigs? Yes. Well maybe…. And perhaps no.
The option to buy used mining rigs is a tempting one. With the madness surrounding crypto mining and alt-coins, many people are going to look into building their own mining rigs. While this isn’t a huge undertaking for those who are quite computer savvy, what about those who aren’t? Building a mining rig yourself can be quite daunting if you don’t understand the basics of building a computer from the ground up. This would lead many to look towards eBay and Craigslist to shop for used mining rigs that other miners are trying to sell. But is it worth it?
Arguments In Favor to Buy Used Mining Rigs
Difficult to Source
Sourcing hardware for a mining rig build can be somewhat difficult. The main issue that one would encounter in acquiring the hardware for a mining rig is limitations on GPU quantities you can purchase. Many retailers, such as NewEgg.com, will have a limit of one per customer per purchase. Getting the bulk of your GPUs may be difficult, so buying a rig with all the parts sourced may be an attractive option to some.
Assembly is Complicated
Building a mining rig is also quite an undertaking in and of itself. It requires more than a working knowledge of assembling a normal desktop PC, as you’ll be required to run PCI-E USB riser cards and possibly need to daisy-chain power supplies in order to get the entire rig up and running. Buying used mining rigs with all of the assembly, troubleshooting, and OS installation and configuration done for you may be an attractive prospect.
Arguments Against Used Mining Rigs
As with any used PC, you can never be fully certain how old all the parts are or how long they will last. Additionally, people selling their mining rigs are looking to get out of the mining business altogether, so their rigs will be sold as-is. So a warranty will most often be off the table when dealing in used mining rigs. Once you drive off with it, it’s yours. When you buy used mining rigs you are taking on no small amount of risk.
Used rigs could also contain dated or aging hardware. Dated hardware means the GPUs are from previous generations, and thus offer less hashing power. Aging hardware could mean your used rig won’t mine for a long enough period of time to recoup your investment, much less turn a profit. A key talking point when speaking with the seller would be to ask how long the rig has been mining. If it’s been up and running for longer than a year, it’s probably best to not buy it – you’re on borrowed time. And if the hardware is dated, avoid it altogether. Dated hardware isn’t able to keep up with the mining difficulty to produce viable hashing power. This means it will take far longer to recoup your initial investment, if you recoup it at all.
Price is also a major consideration for buying mining rigs. Due to the nature of cryptocurrency mining, GPU prices are overly inflated, even on the used market. This was covered more in-depth in my previous article. This will lead to mining rigs being sold at above retail price for new equipment, as even used GPUs are being sold for more than MSRP. And you can bet your bottom dollar that any miner looking to get out of the cryptocurrency mining game will look to fully recoup all the money they spent on their rig, so they will sell it for the highest price that people will pay. Given the hype around crypto mining, this means seeing used mining rigs going for north of $4,000 will be the norm.
The main thing one should always do when looking to buy used is to research the price of the individual components before contacting the seller. Purchasing etiquette dictates that one should do all their research regarding pricing before they arrange to meet the seller. This will allow you room to haggle if you know what you’re buying. Plus, it’s considered rude to meet with a seller and begin research while you’re on their time.
Typical Craigslist Ads for Used Mining Rigs
My Opinion: Should You Buy Used Mining Rigs?
With the main pros and cons laid out, my professional opinion is that it can be reasonable to buy used mining rigs. If, and I stress IF, you can find a good deal where the sum of the parts is at or below MSRP, it may be worthwhile for you to buy a used rig. Since the rig will come assembled, you should expect to pay a little extra for that luxury. How much extra you find reasonable is completely subjective.
Now for my conditions:
- Condition 1: You must be comfortable replacing parts if/when they go out. I would highly recommend you only buy a used rig if you have a friend or loved one with the knowledge necessary. That, or you’ll need to be willing to spend hours pouring over how-to’s and in-depth guides on the web to figure out how to troubleshoot and replace any issues that arise with your rig.
- Condition 2: One should be able to comfortably absorb the cost of the mining rig if the entire enterprise goes belly-up. Buying used mining rigs will almost never come with a warranty or guarantee.
- Condition 3: Understand the hashing power of the rig you’re buying. It will be essential to understand just how much cryptocurrency you should expect to mine with your rig so you can plan your ROI. If the rig won’t pay for itself within a year, don’t buy it.
Given the volatility of the cryptocurrency market and the inherent dangers of investing in cryptocurrency, I must add the following disclaimer: the above article was written as my opinion, and should be taken as such. We (myself and CryptoCapers.com) are not responsible for any losses incurred by any reader investing in the cryptocurrency market, mining rigs, or ASIC mining equipment, using any advice we have published as guidance in buying used mining rigs or any other mining hardware. The cryptocurrency market is extremely risky and volatile, and our advice should only be used as part of one’s research into any crypto mining or investing. If you are in doubt, or if high risk isn’t for you, then don’t pull the trigger. But if you’re eager to take a risk in hopes of making real money in the future, then by all means, join us and the rest of the crypto pioneers and invest in mining your own cryptocurrency.
GPU Availability Trending Downward
GPU Availability Trending Downward – Cryptomining is the Culprit.
Ask anyone looking to build a PC for gaming or cryptomining and they’ll tell you the same story: GPU availability trending downward is reality. As a result of supply and demand GPU prices are through the roof. A recent boom in popularity of cryptocurrencies, like Ethereum or Monero, has led to a record high demand for GPUs driven by crypto mining. Such high popularity of cryptocurrencies has led to GPU prices trending upward. Yet, higher prices aren’t helping shore up supply. Both major retailers of consumer-end graphics cards, Nvidia and AMD, are experiencing a supply shortfall. Their core markets are also suffering from this relatively sudden price increase and poor availability.
GPU Availability Trending Downward is not an accident….
Demand Far Exceeds Supply
Even with prices for consumer cards on a steady rise, many retailers and even GPU manufacturers can’t seem to keep GPUs in stock. But the rise in GPUs scooped up for cryptocoin mining isn’t the sole culprit in this matter. ASIC manufacturers, such as Bitmain, are buying out major foundries so they can keep pace with demand for ASIC miners. This puts foundries like TSMC at a production deficit when it comes to supplying GPU manufacturers like Nvidia and AMD.
While your average end-user won’t notice a huge difference, this shortage is impacting small-time altcoin miners and gamers alike. Prices are being driven ever higher by major mining corporations buying their GPUs en masse from major distributors in China. GPUs are being bought in such bulk that consumers aren’t able to get their hands on a high-end graphics card without paying a hefty price, if they are able to obtain one at all. With markets devoid of stock, and demand doubling or even tripling supply, even having the money doesn’t guarantee you’ll be able to buy the graphics card you want. That’s where GPU availability trending downward hits hardest.
With massive supply shortfalls, GPU manufacturer Nvidia is trying to limit who buys their GPUs. According to Nvidia spokesman Boris Böhles: “For NVIDIA, gamers come first. All activities related to our Geforce product line are targeted at our main audience. To ensure that Geforce gamers continue to have good Geforce graphics card availability in the current situation, we recommend that our trading partners make the appropriate arrangements to meet gamers’ needs as usual.”
AMD has similar issues. Trying to get the latest Radeon graphics card will likely cost you a small fortune, if you’re able to buy one at all. AMD’s Radeon line tends to be more popular with miners due to their reputation of having better mining efficiency than Nvidia’s GeForce line. This leads to getting all but the most entry-level Radeon cards nearly impossible.
With supply issues and the wide unavailability of AMD’s Radeon RX 500 series, AMD is also putting gamers first. According to an AMD spokesperson in an email to CNBC, “The gaming market remains our priority. We are seeing solid demand for our Polaris-based offerings in the gaming and newly resurgent cryptocurrency mining markets based on the strong performance we are delivering.”
The Future for GPUs
While the short-term is definitely horrible for end-users, answers may be just over the horizon. With both major GPU manufacturers acknowledging the problem, perhaps we’re on the cusp of a revolution in GPU technology. We may be seeing the major GPU players developing graphics cards geared specifically at miners while still innovating and improving graphics cards for the hardcore gamers. Only time will tell. One thing is for certain: current GPU market trends are unsustainable for both the miners and the gamers of the world.
Bitcoin Mining for Beginners – Episode 4: Monero
Episode 4: Trading Monero
I recently had a crash course in trading Monero for Bitcoin. Boy was that an adventure!
If you haven’t seen my previous episode in this series, please go check it out here.
Mining Enough Monero
Well, after we’ve setup our miner and found our mining pool (I chose Minergate to start), we then need to actually mine enough cryptocurrency to trade for Bitcoin. This can take a lot of time, depending on your mining rigs, the difficulty of the coins you’re mining, and the miner pool fees that you have to pay to trade. The biggest factor to consider, as a matter of fact, is the pool fees. As I’ve found out.
So using Minergate, I had mined the required amount of Monero that Minergate needed to trade. Subsequently, I began the trading process. Easy as pie, right? Oh boy…
Trading for Bitcoin
Prepare to wade through a minefield of pool fees, transfer fees, and selling fees. There are literally fees attached to every…single…transaction. As such, you have to be very careful before you begin moving your coins around. One must read every agreement for every service they use, and one must carefully calculate how much cryptocurrency you need to cover all your fees. Some services and pools have higher fees than others, but this is usually a trade-off for ease of use. Take Minergate for example. They have an extremely easy-to-use GUI that makes mining various cryptocoins very easy. However, their pool fees tend to be higher than others.
Back to the point: I’m trading my Monero for Bitcoin. To begin this process, I logged onto my Minergate dashboard, and began the selling process. (Pardon the balance inconsistency – I went through this process prior to publication)
Minergate – Sell with Changelly
When you go to sell, it will take you to the associated cryptocoin market. For Minergate users, Changelly is the featured partner with integration for ease of trading (or that’s the plan at least.)
Changelly – Trading Cryptocurrencies
In my particular case, I was exchanging my Monero (XMR) for Bitcoin. As I found out, however, you are required to have a minimum amount of Monero, or any cryptocurrency for that matter, in order to trade. This is due to network fees and commissions that each site skims off of the top. This is simply the nature of cryptocurrency trading and must always be taken into account.
Well, all of this seems simple, right? In theory, yes. But what inspired me to share my experience here was the plethora of issues I encountered. My mistakes, I hope, will serve as a warning to everyone else.
What was my problem, you may ask? I had the required amount of Monero ready to go, which at the time was 0.30 XMR. Also, I had the Minergate fees ready, which was 0.02 XMR, and I was prepared to pay the minute Bitcoin fee to Changelly. So all of my fees were calculated and accounted for. But I ran into an issue that will probably arise for many people – network failures when paying the Changelly invoice with Minergate.
Let me back up a bit. When you complete the steps I outlined above, you’ll be required to manually send your cryptocurrency to Changelly using your online wallet or mining pool. In the case of Changelly, they are partnered with Minergate, and they have a simple interface to send the invoice to Minergate within their client dashboard.
Changelly Invoice Option
My issues arose not here, but when trying to pay the invoice using Minergate. Each and every invoice I’d validate and attempt to pay would end in network failure. Reaching to support took much longer than I’d hoped, and I became impatient due to the rising prices of Bitcoin – I wanted my Bitcoin as soon as humanly possible. And that was my mistake.
In an attempt to get around the issues with Minergate sending XMR to Changelly, I went and opened an online wallet recommended by Monero’s network – MyMonero.
I setup my wallet, enabled 2-factor authentication, and verified my email address. I did everything by the book. So I figured that I’d be able to send my XMR to MyMonero and attempt to pay the Changelly fee that way. And in theory, that would have worked. If only I had remembered the cardinal rule of crytpcurrency trading – REMEMBER THE FEES!
I sent 0.30 XMR to MyMonero, paying the 0.02 XMR fee to Minergate for their part of this. I then attempted to send the XMR from MyMonero to Changelly…
So not only did I neglect to check my fees from MyMonero, I also didn’t have enough XMR left in my Minergate wallet to send the necessary amount of XMR to MyMonero. I broke the cardinal rule of cryptocurrency trading, and I’m paying the price of waiting. Waiting for my miners to gather enough Monero to cover the transfer fee from both Minergate and MyMonero to send the XMR to Changelly.
Moral of the Story
The moral of the story is this: REMEMBER THE FEES!
There is literally nothing more frustrating, as I’ve found out, than making all your transfers only to realize you didn’t account for network fees. These issues could have been subverted with just an ounce of preparation. An ounce that I neglected to measure.
That’s my story. I hope this helps some wayfaring crypto-trader out there. Hopefully my mistakes will be your lessons!
In my next installment, we’ll explore my adventures in buying and configuring ASCI miners for mining Bitcoin. Look to this space for more adventures in Bitcoin!