What did I learn from 1 week of Dogecoin mining

I am a late “adopter” of cryptocurrency. I heard of Bitcoin many years ago, but couldn’t truly understand it or take serious in it. When too many cryptocurrency news keep popping up, perhaps it’s time to get my hands on some coins.

How to get my hands on some coins? Mining of course, unless I sell something which accepts cryptocurrency as payment. I come across 3 cryptocurrency: Bitcoin (2009), Litecoin (2011) and Dogecoin (2013). Based on my understanding, mining get exponentially more difficult as times go (depending on how much had been mined). So it would be extremely difficult to mine Bitcoin, and Dogecoin is fairly new with light humour in it, so Dogecoin it is.

Below are a few of my observation as a Dogecoin miner for a week.

The Wallet

Firstly, I need a Dogecoin wallet, which is a piece of software which can store Dogecoin in a file. After the wallet is installed, it needs to download the blockchain, which is supposed to be ALL the Dogecoin transaction data as of today, which takes about 8 hours to download before I could start using the wallet. When someone else use Dogecoin to send to receive (a transaction), it will add to the blockchain, which will get bigger and bigger overtime.

There is no username for your wallet, so there is some basic anonymity. You could password protect your wallet (like a password protected zip file), just in case someone get their hands on your wallet. I think you can keep multiple copy of your wallet on multiple machines (I might be wrong).

How does people send money to you? You can generate an address (a string of characters), and ask them to send money to this address using their wallet software. You can generate multiple addresses to identify what money come from whom.

The Mining

There are CPU-based and GPU-based (using NVIDIA or AMD graphic cards) mining. Somehow GPU-based mining perform much better.

Somehow pool-mining perform better than solo mining, so join a pool.

Mining on my 2013-end Notebook (Gen4  i7-4500U @ 1.8Ghz, Nvidia Gefore 740M)

Mining speed in measured in khash/s, where each machine (or worker) should at least produce 10 khash/s in order to make mining minimally worthwhile at the current state.

The i7-4500U can run 4 threads, where each thread yields 10 khash/s, so my notebook is capable of 40 khash/s. I found that I can run on 3 threads in the background and my OS and virtualbox still run normally without much slowdown while I do web development in Python. The heat is slightly hot, and it isn’t noisy.
The Nvidia Gefore 740M only have 1 core and is capable of 40 khash/s. The heat is quite hot, and I am afraid it might damage the notebook if running for a long time.

So my notebook is capable of 80 khash/s, but I only run CPU-based mining on 3 threads (30 khash/s) for 12 hours per day.

Using a Dogecoin calculator, at 30 khash/s  (current difficulty=1771, assuming block reward=500000), I could mine 7 Dogecoin per hour, 170 Dogecoin per Day. At the current exchange rate (BTC per DOGE) of 0.00000212, the daily income is USD 0.35 (about 500 Doge to 1 USD). Since I am only running 12 hours a day, so I only get half of it.

Mining difficulty goes up fairly fast (it was 385 on 1st Jan 2014). Current Block Reward is 0 to 1,000,000 DOGE (500,000 is used as Average), but it is estimated to drop to half in 18 days.

Mining on my 2010 Notebook (Gen1 i5 M460 @ 2.5Ghz)

The i5 M460 could run on 4 threads, where each thread yields 3 khash/s, so my notebook is capable of 12 khash/s (it means my 2013 Notebook’s CPU is 3.33 times more powerful). The AMD Radeon performance is too pathetic, clocking only 3 khash/s.

Given the cost of power consumption and all that, I am afraid mining isn’t marginally worthwhile on this machine.

Mining on Digital Ocean (2 CPU, USD 20/month)

The DO server with 2 CPU could run on 2 threads, where each threads yields 6 khash/s, and the instance is capable of 12 khash/s (it means 2 CPU on DO is equivalent to the processing power of Gen1 i5 M460 @ 2.5Ghz).

At 12 khash/s, it could generate 67.5 Dogecoin per day (difficulty=1771, block reward=500000) and about USD 0.13 per day. The cost of server is USD 0.66 per day. So this is definitely not profitable at the current state.

Mining on AWS Spot Instance (c3.2xlarge, 8 CPU, USD 0.112/hour)

c3.2xlarge on-demand instance cost USD 0.60/hour, so the spot instance provide about 80% discount.

The AWS server with 8 CPU could run on 8 threads, where each threads yields 4 khash/s (DO CPU performs 50% better), and the instance is capable of 32 khash/s (it means 8 CPU on AWS is equivelant to 80% of processing power of Gen4  i7-4500U @ 1.8Ghz).

At 32 khash/s, it could generate 7 Dogecoint per hour (difficulty=1771, block reward=500000) and about USD 0.02 per hour. The cost of server is USD 0.112 per hour. So this is definitely not profitable at the current state.

Conclusion

Dogecoin mining is hardly profitable at the current state of 25 Jan 2014.

If you have a new and powerful CPU, you could mine in the background and hopeful of getting 500 Doge (about 1 USD) within a week. If you have desktop with powerful GPU, you might do better. But the future isn’t getting brighter for Dogecoin mining, just mine for fun.

I didn’t try to build a GPU-based miner or try GPU rig or AWS GPU-based instance as I believe I am too late into the game. Those with earlier experience mining Bitcoin or Litecoin would have a better advantage.

If somehow you get your hands on some free idle server or nvidia super computer, it could still be fun.

A CPU on DO yield 6 khash/s while AWS yield 4 khash/s. A Gen1 i5 M460 @ 2.5Ghz could yield 12 khash/s. A Gen4  i7-4500U @ 1.8Ghz yield 40 khash/s. I overestimated the CPU capability on AWS and DO. 10 CPU on AWS or 6.66 CPU on DO is equivalent to the processing power of Gen4 i7-4500U on a 2013-end notebook.

The Forbidden Path

It’s not actually forbidden, just that no one encourage you go there, your seniors and peers don’t go there, you heard of someone gone there and struck gold, and you are drawn there by mysterious forces.

I am not the type who would take the forbidden path. I study and work hard, fairly obedient and follow instructions pretty well, and would probably live a normal life with a normal career. I think the only things which tick me off is that Bill Gates the Techie could be a billionaire, and my brother saying there is no future in employment.

After 7 years of employment in two companies, my normal career kind of ended. I had been freelancing while working and I freelance full-time when I quit my job while I try to develop some product. Some people don't know where to get customers for freelancing projects, and I guess when you are doing it for a while, word will spread with referrals, and you will get repetitive business. I think things are better nowadays with Elance and oDesk, plus various online community and offline meetup; plenty of jobs, it’s a matter if you are interested or not. Though freelancing is pretty common, but I don’t have a friend who is actually a freelancer as well, until much later. I would assume less than 5% of people in IT embark on freelancing? So this path is still less than normal.

I thought I could build a product and sell it for money, but I don’t have the sales and marketing skill, and I didn’t meet someone who could help me. Then I just follow my passion and build something which I found useful, without much market study or business model. I developed a website to list new property launches, and another one to list restaurant reviews. It took about 3 years to generate USD 100 per month (luckily I live in Malaysia), and without knowing or planning for it, I have the most bizarre form of income: Adsense money. I have the hard time explaining how I manage to make money without selling anything or soliciting advertiser myself. Then I realize it’s like those free newspaper, give it for free to increase readership and get money from the advertiser, except I have an advertisement broker which is Google (less money, but no sales and marketing cost). How many of my friends actually make money from online advertisement (including bloggers)? None, except the new found bloggers which I came to know after running the food review site.

I guess there are many forbidden paths where we heard of, and people around us doesn’t seems to do it: freelancer (programmer, designer, photographer, etc.), blogger, people who sell things online, renting out room with airbnb, people who do a start-up, or people who start a conventional business. Sometimes you get people who work from home and people who don’t sell anything, or professional gamer (make a living by playing computer games).

If you kind of doing a startup (or just making a product), there is the thing with funding, market study, business model, validating your idea with customers, etc. What if you are a person who builds a product but you do none of the above? Does that make you a planned failure or irrational optimist? There is a Chinese saying 性格决定命运 (your character decide on your fate), so I am guessing its happening to me. I am not motivated with the business and customer stuff, and I am delusionally building a product which interest me, and hoping others would like it as well. I am pretty sure I am not an entrepreneur, probably just someone having fun building stuff. I accepted the fact I probably wouldn’t become filthy rich, but I shall become someone happy building things which I like. It might be difficult to make tons of money, but it shouldn’t be that hard to make a decent living while doing what we love, in a way which makes us happy most of the time.

Life is of many choices: I can choose to live the life I desire or give in to society norm; I can try to enhance the sales and business skill which doesn’t interest me, or I could seek an alternative model like Google Adsense; I could insist on making lots of money, or live a more meaningful life with less money; even though I am not a successful entrepreneur, there are still options besides employment. There is the normal path, less than normal path or the forbidden path that almost no one could guide or encourage you.

Some say normal equal mediocre. I think normal or mediocre is alright if this is the path you have truly chosen for yourself. I always assumed people have the naturally tendency to make more money, then I realise this is not true. Most people might choose the path with the least hardship and uncertainty, and some indeed feels more money isn’t really more attractive.

The forbidden path is mysterious, but not everyone wanted an adventure, as it’s filled with great uncertainty, with the promise of great reward or nothing at all, depending on how you look at it.

Every time when you want to claim that you have no time or no choice or no money, pause for a moment and think again, think about alternative choices.

If the logical mind doesn’t favour the forbidden path, where does the logical mind leads to?

Have a look at some of my projects: Malaysia Most Wanted, hackerio (new) and travelopy (work in progress).

2014: a Brave new year

It’s time to bravely set some new and old adventures for 2014, after saying goodbye to 2013.

Build Travelopy to ease my travel planning by helping me with where to go, when to go, how to go, what to do, what to eat, etc. (Booking.com handles where to stay pretty well most of the time). Create a beautiful album/journal of my travel experience. It shall be a place where traveller came together and share things in a meaningful and fun way. This shall be the 8th year since I hatched the idea, and this shall be the year to deliver it.

Make hackerio a useful resource page: Wikipedia + Delicious for Hacker. It shall be a playground for hackers.

Make Malaysia Most Wanted a playground for foodie.

Use Travelopy to plan for my travel in 2014. 2 months of holiday + 10 months of work seems reasonable. Taiwan? Xinjiang? New Zealand?

Build a few more "stupid idea" apps. A database of fictional character? An app to help disposal of useful junk like freecycle? Build a game.

Have a kid, if God permits.

Finally became a millionaire, as usual.

In 2014, remember what I am doing through Sprint + Kanban + Pomodoro.

May I find peace and meaning in life.

PS: In 2014, I shall go into coding spree to build plenty of stuffs.

Goodbye 2013.

It’s the time of the year, where I can hardly recall what I had done for the past year, and bravely set up to do magnificent things in the coming year. First, let's recall back what I set out to do in 2013 ...

In 2013 I wish to build a version of Food and Travel web app which I am really proud of, but sadly little progress is made. The only consolation is I did launch a very basic of Travelopy (learn about Python and Google App Engine in the process), and Malaysia Most Wanted’s Python Migration is 50% completed. It sadden me that I set out to build Travelopy 7.5 years ago, yet it's no launched yet.

In 2013 I manage to attend an Arduino hacking session at Google DevFest, then I realise I really doesn't have the leisure time to pick up this new hobby.

In 2013 I did manage to work on a “Stupid Idea”: hackerio help hackers to discover and organize online resources, which involve tagging of web links, bookmarking, collaborative list of things, startup database, etc. Why I manage to deliver? Thanks to Google Cloud Developer Challenge 2013, and at least I won a consolation prize of Nexus 7 for about 20 days of work.

In 2013, I didn’t manage to make a game.

In 2013, I travel to Europe and Japan for almost 2 months, which is great. Only through traveling I can break away from the anxiety of life, replaced by the stress and enjoyment of travelling.

In 2013, I pick up the responsibility to be on the committee of my apartment (reluctant "hero" scenario). It’s pretty stressful and unrewarding, which tormented my quiet life, yet it still feels like the right thing to do. It made me understands in order for the apartment to function and make the residents happy, someone needs to sacrifice; in order to build a better country, someone need to sacrifice as well, though some people are more suitable for the job.

In 2013, it had been 8 years since I quit my job and work from home. Malaysia Most Wanted is probably 7.5 years old, and I am happy it’s still relevant today, and I am sadden I didn’t do more for it. I am happy that I manage to adapt to working from home, and even happier that I “retire” from freelancing, and very happy to spend time on projects which interest me. I guess I am having my unicorn job. Now, only if I manage to make a game, complete Travelopy, make Malaysia Most Wanted fun to use (besides useful), travelling as a lifestyle …

In 2013, I came to accept the idea of having children of my own. My logical mind always wonder why create more "problems" to oneself, I still can't figure it out, but it feels like the right time and right thing to do.

In 2013, I bought "hackerio", replacing optimus.

hackerio

In 2013, I wanted a “True Life”, yet the image of a “True Life” is very vivid in my mind, then I saw message I left for 2013: May everyone find peace and meaning in their life. I am still feeling very restless now, so many things I wanted to do, with so many distractions and so many things not done. I need to find peace within my heart: it is a journey which I don't have the map.

Goodbye 2013.