Idan Abada is on a mission to democratize bitcoin mining. He believes that minting new coins is not just for the professionals.
His message seems to resonate with the masses.
Abada, who lives in the San Fernando Valley in Los Angeles, posted a video of himself using free Starbucks electricity to run an $875 mini bitcoin mining rig. This post has been viewed more than 2.6 million times on TikTok.
The rig is a lot more interesting than a warehouse full of rows of ASICs that are whirling around – an image that has become synonymous with crypto mining.
Instead, Abada’s miner is relatively simple: it consists of a multi-port USB hub, a mounted mini fan, and ten USB-sticks, each containing two Bitmain-manufactured ASIC mining chips.
Abada stated that it is one of the easiest miner to set up and operate, as all you need is a computer, or a laptop. It’s powered via USB and that’s it. Anyone can become a crypto miner and participate in the crypto world.
A $875 mining rig
Abada began mining bitcoin in his bedroom in a shared home in 2015. He and his roommates agreed to pay more for electricity. In 2017, Abada opened his own shop.
Abada stated, “I found it really difficult to buy equipment for mining Bitcoin, so I started BitcoinMerch.com.” “At first it was me selling cables and very basic equipment.
The company now provides all the hardware needed to start mining.
Research firm Technavio expects the overall market for global crypto mining hardware to grow by $2.8 billion from 2020 to 2024. Abada claims that his business has grown exponentially over the past four years due to increased interest in crypto.
Abada claims that Bitcoin Merch sales have surpassed $428,000 this year, an increase of 355% over 2020.
The NewPac is a top seller on Bitcoin Merch – it’s the main component in Abada’s viral TikTok Video.
He said, “We have sold thousands of products, and when we get more they sell out quickly.”
According to Abada, Missouri-based GekkoScience dismantled a large miner from China and used the parts to create the NewPac. The mini-USB rigs have two ASIC chips each, which means that the $875 rig contains 20 chips.
Abada claims that even though the consumer-grade rig was constructed from parts from a Chinese miner’s rig, they are fundamentally different.
One, his budget rig runs much quieter than industrial-grade Bitcoin miners.
It’s quiet, so it can be run next to your desk. Abada explained that this is a great benefit.
“Industrial miners need a warehouse, power lines, cooling, and a lot more. He said that if you try to run one from your home, it will be so loud that you won’t be comfortable sleeping in the house.
However, his rig is much less powerful.
When determining the output of an rig, two important factors are power consumption and hashing power. The industry term hashrate (or hashing power) is used to describe the computing power that a rig contributes towards the overall bitcoin network.
Abada stated that the rig’s hashrate is very low. This means that this machine will produce less bitcoin than other rigs.
Brandon Arvanaghi, a bitcoin mining engineer, explained that USB miners are less efficient than traditional ASICs.
Not worth it
Although it may seem cool, Abada is the first person to admit that TikTok fame’s rig doesn’t make any money.
He stated that it is difficult to make a profit from this without free electricity.
6.25 bitcoins are created roughly every ten minutes. To create these tokens, a global pool miners contributes their computing power to run SHA256, a hashing algorithm.
Every single bitcoin mining rig in the world runs the exact same code, even the one featured by Abada’s Starbucks TikTok article.
These miners don’t run the SHA256 algorithm in a vacuum. They are competing against one another to unlock each new batch of bitcoin.
A team of miners is almost necessary to win. This is what Abada did with his rig. Even with this mining pool, his small rig still generates very little.
Abada claims that his mini miner generates 0.0002478 Bitcoin per month, less a 5% mining fee. This is worth $9.35 at today’s prices. He pays $15.84 total electricity cost because he mines in Los Angeles.
Abada ends the month in red, to the tune $5.88
These numbers are subject to change at the moment and will depend on bitcoin’s price and global hashrate.
Arvanaghi states that these operating margins are the reason why buying bitcoin directly is almost always cheaper than mining.
Arvanaghi stated that crypto mining is all about the breakeven cost.
“USB miners such as this could be appealing to people who don’t have the financial means to pay for their electricity. He suggested that children in public places, college dorms or buildings that share electricity prices could be vulnerable to employees stealing electricity from the company.
This is the most practical use for the miner. It’s a fun hobby for crypto enthusiasts.
Whit Gibbs, founder and CEO of Compass, a provider of bitcoin mining services, said, “I think they’re cool novelty items, and they help educate people regarding bitcoin mining.”
Gibbs is the head of a company that offers the opportunity for the uninitiated to get into the mining business.
Compass customers do not have custody of their mining rigs. Gibbs and his team assist patrons in purchasing mining hardware and installing it at various data centers that host it, pool it with other equipment, and manage the day-today logistics. This is a more hands-off approach to mining.
Abada believes it is all about getting as close as possible to the mining process.
He said, “I now dedicate myself to teaching and supporting beginners around the globe to mine cryptocurrency in their own homes,”.