College students are finding it’s harder to turn a profit by mining cryptocurrencies. Even with universities footing the energy bill, it’s getting more expensive to break into the mining business. Equipment prices are soaring, even as digital currencies fall.
“It’s gotten pretty ludicrous now the amount of money you have to spend to get in,” Alex Gilarde, a senior at Fairleigh Dickison University said.
Cryptocurrencies are created by a process called “mining.” Essentially, computers solve complex mathematical equations. In exchange for lending their computing power, miners get digital coins. They can exchange those for other cryptocurrencies, hold onto them, or cash out.
But cryptomining takes up a lot of energy and computing power. So reliable electricity and hardware are a must.
The price of graphics cards from companies like AMD and Nvidia has skyrocketed alongside bitcoin’s rise to the mainstream. The graphics cards have been traditionally marketed toward online gamers, but cryptominers need the hardware to build their mining rigs too. The demand for those cards has gotten so high that miners and gamers alike are struggling to get their hands on them.
Gilarde has been mining cryptocurrencies since 2012. He said he was pretty “tech-savvy” in high school, so when he and his friends hard about cryptomining, they decided to give it a try. At the time, the price of one bitcoin was less than $5.
In total, Gilarde said he spent around $4,000 to $5,000 on hardware to build his mining rigs. From the start, he’s been finding ways to stretch his investment.
“When I started mining cryptocurrencies and going onward, I would do it in my parents house and in our own school actually after school. I would leave my laptop in different corners of the school,” Gilarde said.
“They didn’t really know I was doing it, and since when we first started off it wasn’t really a big phenomenon, they kind of just let it go. It wasn’t really the electricity sapping phenomenon it is today.”
Now, he has three rigs running in his dorm room 24/7, and another still back at his parents’ house. Gilarde said he takes out anywhere from a couple hundred to a thousand dollars from his digital wallet every couple of months. That’s enough for him to pay for part of his tuition and diversity his investment portfolio.
But the price of bitcoin has been falling this year. The digital currency has lost more than half its value since its peak in late 2017. And other cryptocurrencies are following suit.