$ 875 mini bitcoin mining rig TikTok video: interview with the creator

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Idan Abada’s mission is to democratize bitcoin mining. As far as he’s concerned, minting new coins isn’t just for the pros.

His message seems to resonate with the masses.

Abada, who lives in Los Angeles’s San Fernando Valley, posted a video of himself using free Starbucks electricity to power an $ 875 bitcoin mini mining rig. The post has since gone viral on TikTok, with 2.6 million+ views.

The platform is very different from a warehouse filled with rows of swirling ASICs, an image that has become synonymous with crypto mining.

Instead, Abada’s miner is relatively straightforward: it consists of a multi-port USB hub, mounted mini fan, and ten USB drives, each containing two ASIC mining chips made by Bitmain.

“It’s one of the easiest miners to set up and operate, because all you need is a computer or a laptop,” Abada explained. “It’s USB powered, and that’s about it. Anyone can become a miner and be part of the crypto world.”

Computers in a warehouse near a warehouse in Iceland where Bitcoin mining machines were stolen. Iceland’s cheap electricity and cold weather, which helps keep computers cool, have made it a prime location for cryptocurrency mining.

Egill Bjarnason | The New York Times

A mining platform at $ 875

Abada started mining bitcoin in his room in a shared house in 2015 where he agreed with roommates to pay extra for electricity and in 2017 he opened his own shop.

“I noticed that it was really difficult to buy hardware to mine bitcoin, so I created BitcoinMerch.com,” said Abada. “At first it was just me selling cables and very basic gear.”

The company now offers its customers all the equipment you would need to get started in mining.

Research firm Technavio expects the global cryptocurrency mining hardware market to grow by $ 2.8 billion from 2020 to 2024. Abada says his business has grown exponentially over the past four years , as interest in cryptography has exploded.

Abada claims Bitcoin Merch sales have reached $ 428,000 so far this year, up 355% from 2020.

One of the top sellers on Bitcoin Merch is NewPac, the main component of the platform featured in Abada’s TikTok viral video.

“We’ve sold thousands of them, and when we get more, they run out quickly,” he said.

Abada says Missouri-based GekkoScience dismantled a large miner from China and reused the parts for the NewPac. Each of the mini-USB platforms has two ASIC chips, so in total, the $ 875 platform has 20 chips.

However, even though this mainstream platform was made from parts harvested from a Chinese miner, Abada says the two are fundamentally different.

On the one hand, its economical platform is much quieter than industrial grade bitcoin miners.

“It’s not loud, so you can run it next to your desk. It’s a huge plus,” Abada explained.

“With industrial miners you need a warehouse, you need power lines, you need cooling, that’s all. If you try to get one out of your house, it’s gonna be so loud. that you won’t be able to sleep in this house anymore, ”he said.

But its rig is also much less powerful.

Two important factors in determining the output of a rig are the amount of power it consumes and the chopping power it produces. Hash power, or hashrate, is an industry term used to quantify the amount of computing power that a platform contributes to the global bitcoin network.

“The downside is that this platform has a very low hash rate,” Abada said. This means that this machine will tend to produce less bitcoins than competing platforms.

“These USB miners tend to be much less power efficient than a traditional ASIC,” Bitcoin mining engineer Brandon Arvanaghi explained.

Not worth it

It might sound cool, but Abada is the first to admit that his renowned TikTok platform doesn’t make any money.

“It’s actually hard to profit from it unless you have free electricity,” he said.

Every ten minutes or so, 6.25 bitcoins are created. In order to create these new tokens, a global pool of miners all contribute their computing power to the execution of a hashing algorithm known as SHA-256.

The same code runs on every bitcoin mining rig on the planet, including the one featured in Abada’s Starbucks TikTok post.

But these miners don’t run the SHA-256 algorithm in a vacuum. They compete against each other to see who can unlock each batch of new bitcoin first.

To win, you almost have to join a team of other miners, which is exactly what Abada did with his platform. But even with the help of this so-called mining pool, the proceeds from its small rig are pretty minimal.

Abada says his mini miner generates 0.0002478 bitcoin per month, minus a 5% mining pool fee. At today’s prices, it’s worth $ 9.35. Because he operates a mine in Los Angeles, where the cost of electricity is 22 cents per kilowatt hour, if he runs his rig around the clock, he pays $ 15.84 in total cost of electricity.

Abada therefore ends the month in the red at around $ 5.88.

It should be noted that these numbers change by the minute and depend on the price of bitcoin and the overall hashrate.

This type of operating margin is why Arvanaghi says it’s almost always a rule that buying bitcoin directly is cheaper than mining, unless you are using platforms with it. “shockingly cheap or large-scale electricity”.

“It’s all about the break-even cost when it comes to crypto mining,” Arvanaghi said.

“USB miners like this might be appealing to people who don’t have to pay for their own electricity. Maybe kids in public places, college dorms, buildings that share electricity prices. , employees who steal electricity from their business, ”he said.

The most practical use case for this miner? A fun hobby for those interested in crypto.

“I think this is an interesting novelty and that they help educate people on bitcoin mining,” said Whit Gibbs, CEO and founder of Compass, a bitcoin mining service provider.

Gibbs runs a business that also deals with providing the uninitiated with the opportunity to gain a foothold in the mining game.

However, Compass customers do not keep their mining rigs. Instead, Gibbs and his team help customers purchase mining hardware and install it in various data centers that house the hardware, pool it with other platforms, and handle day-to-day logistics. It is more of a hands-off approach to mining.

But for Abada, it’s about being as close as possible to the mining process.

“I am now dedicated to teaching and helping newbies all over the world to mine cryptocurrencies at home,” he said.

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