You've seen the headlines. NFTs (non-fungible tokens) are taking the art world by storm. This is causing an explosion of interest in cryptocurrencies like Ethereum. Companies like CoinBase are advertising everywhere giving away Bitcoin with every signup. Billionaires can't stop talking about Dogecoin.
Maybe you've heard about crypto mining, where you can use your computer to mine for Bitcoin and other cryptocurrencies. You ask yourself: Is Raspberry Pi Bitcoin, Ethereum or Dogecoin mining worth it?
- Yes, if you just want to learn about blockchain and related technology.
- No, if you expect to make a profit and would like to avoid huge bills.
If you would like to explore crypto mining for pure education purposes, I will provide some links below to get started. But first I'd like to cover the basics and explain why you have to be realistic about your expectations.
Then I will wrap this article up with more positive suggestions about how you might want to dip your toe into the world of cryptocurrency.
How do you mine Bitcoin?
To mine for Bitcoin you need to run software on your own computer to solve complex computer problems. You can try to do this on your own or team up with a "mining pool" and share the rewards. Rewards are only given if you or your team solves the problem before anyone else. The rewards are usually in the form of the currency being mined (Bitcoin, Ethereum, Litecoin, Dogecoin, etc.).
Part of the mining process is verifying transactions. This is how most crypto mining works. Because there is no central authority, miners act as auditors.
A Raspberry Pi is too slow for effective crypto mining
I've linked to an article in the References section below where someone tried various ways to make mining on a Raspberry Pi profitable. But even after switching to a better paying currency (Monero), they concluded it would take centuries to earn enough to even cover the transaction fees.
GPUs are in short supply and in high demand
There is a lot of mining software out there that works with a GPU card, driving up demand. This has lead to expensive and short supplies. It has become such a problem that NVIDIA is actually putting in anti-mining flags to discourage miners from buying up all of their cards.
But on the otherhand, they've also created special mining hardware as an alternative. I've provided a link in the references section. I'm not encouraging you to buy it. I'm just providing a point of reference on how they are trying to handle the situation.
What about mining rigs?
There are special "mining rigs" that you can buy online. But just like anything else they use a lot of electricity, can be very noisy and in the long run may not be profitable either. If you see a rig for sale online, ask yourself why if it's so profitable they want to get rid of it.
What about mining pools?
If you are thinking of joining a mining pool, be aware that some pools charge for contracts. You have to pay to play with no guarantee you will even make back the price of the contract. This is something I would recommend any novice to avoid.
Can you compete with a warehouse full of computers?
Another thing to consider: Investors and even countries with deep pockets have created large warehouses of mining rigs that just mine all day for cryptocurrency - that is your competition.
If you still want to give it a try
If you understand that you could spend more than you make, most of the articles I've seen recommend trying to start by mining Monero. I've linked to some of the articles in the references section below.
What about staking?
Even though "staking" is an advanced topic beyond the scope of this article, I'll try to give a brief explaination. Think of staking as a more energy efficient way of getting rewards for contributing to the blockchain.
The original way of mining for Bitcoin and Ethereum is called "Proof of Work" - which means your mining computer has to deliberately work hard, and burn electricity to be rewarded.
One of the alternatives being promoted as more energy efficient is called Proof of Stake. For that you need to contribute a large sum to participate, for which you will be rewarded (sort of like earning interest - or getting a mining reward).
Fortunately some services (like CoinBase mentioned later) offer you a way to be part of their process. They put up the large amount and you can "stake" a smaller amount through them and receive a fraction of the reward. The one drawback is that sometimes this means you have to agree to lock in your funds for a long time.
How else can you get started with crypto?
I can't advise you on what crypto to buy. But I can give you a few links and general advice. You should always perform due diligence yourself before signing up for any service. Please note that I try to make clear when notes are referral links.
Whatever you do, please remember to enable 2FA (Two Factor Authentication) as soon as you signup. Also note that some services don't tell you they don't support your country - until after you signup - which I found rather annoying ( cough crypto.com ...).
Be sure to keep records for taxes and consult with a financial advisor. Ask your advisor about short-term versus long-term tax advantages.
I cannot stress enough that cryptocurrency is extremely volatile. If you would like to get started I would highly recommend only spending coffee money and nothing more. Don't get "crypto fever." Also, don't put all your eggs in one basket - diversify. The Internet and YouTube are filled with people screaming that something is about to explode in value as part of a "pump and dump" scam. Be a cautious investor, do your homework and don't overreact to hype.
Now that I hope you have been sufficiently warned, here are some of my referral links:
For a beginner in most of the US and other supported countries, I would recommend starting with CoinBase. If you use my referral link, the current promotion is that you and I will both get $10 in cryptocurrency - if you spend $100 within the first 180 days from a country they support (terms and conditions may change without notice).
They offer staking for some of the popular cryptocurrencies. But read the fine print on how your money may be tied up for a long time.
They also let you earn other crypto rewards for just watching educational vidoes.
BlockFi is a service that lets you earn interest on your cryptocurrency. You may have seen or heard the term "HODL." It's a play on the world "hold" - as in hold on to your crypto by letting it just sit there and (hopefully) grow. With a service like BlockFi you could "potentially" also earn interest.
Another service that lets you buy and earn interest on crypto is Gemini. It was founded in 2014 in the United States by the Winklevoss twins, Cameron and Tyler. It offers the ability to earn interest on some cryptocurrencies that BlockFi does not. Explore both services for their current interest rates.
Read the fine print for all services above about what it takes to get your money back out of a system. Never put in money that you can't spare or might need back right away.
Also pay close attention to fees. Just moving money back and forth can and usually does result in fees being extracted from the amount transferred. The excessive fees in the NFT market right now are a cause for concern that allegedly is being worked on.
In this article you learned:
- The pros and cons of using a Raspberry Pi for crypto mining
- Some of the terms and technology in crypto mining
- Where to find info and get started with crypto mining with a focus on education over profit
- How to get started in crypto in general
You can read up on Bitcoin by following some of my Amazon affiliate links:
- How Does Bitcoin Mining Work? (investopedia.com) - 
- How to Mine Cryptocurrency with Raspberry Pi (tomshardware.com) - 
- A Crypto Mining GPU for Professionals (nvidia.com) - 
- Can You Use a Raspberry Pi to Mine Cryptocurrency? (makeuseof.com) - 
- PiMiner Raspberry Pi Bitcoin Miner (adafruit.com) - Note that this article points out that it is out of date and only provided for historical reference - 
- If you want to understand the tech behind blockchain, start by reading up on Merkle Trees (wikipedia.org) - 
- All about Gemini, the Winklevoss Bitcoin Exchange (investopedia.com) - 
- What is Dogecoin Mining? (bitdegree.org) - 
- How can I mine Dogecoins? (blokt.com) - 
- How to mine Dogecoin (DOGE) (en.cryptonomist.ch) - 
- A Beginner’s Guide to Dogecoin Mining (coincentral.com) - 
- What is Proof of Stake? How it Differs From Proof of Work (decrypt.co) - 
- China-based SOS announces activation of 6,039 mining rigs for ETH, BTC (forkast.news) - 
- Nvidia will add anti-mining flags to the rest of its RTX 3000 GPU series (arstechnica.com) -