Hardware helps cryptocurrency miners prospect for digital gold
On the evening of May 29, the power was out in the two front rooms of Stanley Edgar’s Rockwall, Texas, home, where he lives with his 32-year-old son Brandon, Brandon’s girlfriend and the couple’s children.
Brandon’s girlfriend had plugged in a vacuum cleaner, overloading the circuit breaker. This wouldn’t happen in most houses.
But the Edgar house is different. It soaks up nearly four times the electricity consumed by a typical Texas home. Most of that goes into heavy-duty computing hardware that the Edgars use to “mine” for cryptocurrencies like bitcoin.
They are part of a growing community of Dallas-Fort Worth cryptocurrency miners who are spending tens of thousands of dollars to tap into the capricious world of cryptocurrencies digital, decentralized currencies that represent more than $270 billion in wealth.
The beating heart of the cryptocurrency ecosystem is often made up of die-hard “miners” like the Edgars.
“It’s kind of like buying penny stocks,” Brandon said. “You hope it hits the moon.”
Miners use the high-powered computing hardware to verify and tally up the “blocks” in a blockchain — logs in a online ledger that keeps track of digital currency transactions. In return, miners are rewarded with cryptocurrency, each unit of which can sometimes be worth up to thousands of dollars.
The community is small but well-connected, said Jacob Stewart, a 29-year-old from Dallas who helps run an investment platform for cryptocurrencies in addition to his full-time tech support job. He said he sees the same faces at all sorts of cryptocurrency-related groups and meetups.
Cryptocurrency is hot. Hot
like the Edgars’ 100-degree storage space filled with high-powered computing equipment and even higher-powered fans.
The greater the miner’s computing power, the more digital currency they can earn in a given amount of time, improving their return on investment.
This is why the Edgars have tens of thousands of dollars worth of computing equipment, fans (including one from an old AC unit) and a 3-D printer in their garage. A savvy miner needs highend graphics cards, sometimes several, with powerful RAM chips and a power source that can keep things moving — not to mention the ability to pay a hefty electricity bill.
In April, the Edgars consumed 6,500 kilowatt-hours of power.
Early miners used regular computer CPUs. But along the way miners realized that the process by which graphic processing units decode visual inputs was similar to the mechanism needed to solve the challenging algorithms in blockchains, Edgar said. Miners have been after graphics cards since.
Stanley and Brandon only got into cryptocurrencies six months ago, when the younger Edgar posted a graphics card he used for gaming on Letgo, a classifieds mobile app. He was surprised at the prices people were willing to pay, and began investigating the growing crypto market.
At a Goodwill Computer Works in late May, employee John Michael said the supply of high-end graphics cards has been picked over for months, either by miners themselves or gamers looking to secure cards before the miners got to them. At the retail level, Fry’s Electronics has a twoper-household limit on some mining-ready cards.
That said, the Edgars, who have seven rigs running 35 graphics cards — the “horsepower” of mining — and $7,500 worth of coins in their portfolio, said that the demand for graphics cards has now cooled off and supply has caught up.
In March, Edgar started his own mining pool, which allows miners to combine their computing power and speed up the mining process.
Brandon is the tech-savvy brains of the operation, but Stanley has the business know-how. He secured an investment from an associate named Ronald Lang, 59, an executive at Progistics Distribution, for the Edgar mining endeavor. Over time, the Edgars are counting on generating enough digital cash to put some actual money in Lang’s pocket.
“Another friend said he was going to make a lot of money with cryptocurrencies,” Lang said. “It’s not a get-rich-quick scheme, but I’m OK with that.”
Crypto is hot. Hot like a sweltering North Dallas warehouse packed with hobbyists and IT professionals drinking room-temperature soda, analyzing bitcoin’s market capitalization.
While Dallas isn’t a tech hub like Denver or San Francisco, the city’s blockchain community is active. Meetups serve as an online host for dozens of regional blockchain, bitcoin and cryptocurrency groups. The city’s largest bitcoin meetup has almost 2,000 members.
The Dallas-Fort Worth mining community’s most dedicated minds gathered on June 6 in a warehouse attached to an office space owned by Lang’s company. It was the inaugural Dallas Cryptomining Meetup, hosted by Edgar and targeting other cryptocurrency miners in Dallas-Fort Worth. The group has more than 60 members online.
A half-dozen showed up, sitting on folding chairs in a steamy room — Lang said jokingly that he wanted to recreate the environment of the Edgars’ garage — as Edgar described the mining process and the intricacies of running a mining pool.
In attendance was a cross section of the crypto ecosystem, including a developer creating his own digital currency called CryptoRescue.
“It’s an interesting concept to me. Anonymity is a big plus, and I like to take risks,” said Grant Pellett, a 19-year-old from Plano who helped develop CryptoRescue’s web presence.
Part of the reason that it’s hard to gauge the size of Dallas’ cryptomining community is that it is, by nature, mostly anonymous and decentralized. Pellett doesn’t know where the other CryptoRescue developers live, and he met them on Discord, an online chat service popular in the blockchain community.
He said blockchain tech is on the way to greater public acceptance but that established businesses get nervous when things go wrong — like when the value of a coin drops, for example.
Until it reaches the point where miners make millions and consumers can buy a pack of gum and a ham-and-cheese sandwich with CryptoRescue, the community will live in places like the Edgar garage or on Meetup. But reaching that point may not take long.