Nick Sears was 17 years old when he helped build a bitcoin mining farm in Dallesport, Washington. He was 18 when he was legally allowed to buy bitcoin for the first time. And now, at 19, Sears has doubled down on his life as a bitcoin miner, saying “no” to college and “yes” to living in a room inside a data center that houses 4,500 whirling ASICs.
“My room is sound-locked,” said Sears of the acoustic retrofitting of his living quarters. “So I can’t hear the machines when I close my door, but they are definitely noisy if I have my door open.”
The machines generate about 80 decibels of noise apiece — but Sears says he likes being as close to the action as possible. It also beats making the half hour commute each way from his parents’ house in White Salmon.
The 19 year-old has spent pretty much every single day for the last two years teaching himself the nuances of how mining machines work – and crucially, how to fix them. He believes his education in soldering and electronics is worth a whole lot more to him than a university degree.
“I don’t think about going to college at all, just pursuing further knowledge in the repairs of the miners,” continued Sears.
CNBC spoke with multiple miners for this story. Many explained that the allure of mining comes from being able to tangibly grasp the power of bitcoin.
“If you’ve been to any of these data centers, the first thing you’ll notice is just how vast and how impressive they are. They’re huge,” said explained Thomas Heller, chief business officer for Compass Mining, which works with Sears’ employer, SCATE Ventures.
“There’s so much noise, and there’s so much heat. There’s just so much action going on. It is quite cool to walk into a data center for the first time that’s mining bitcoin, because you can really connect the intangible aspects of bitcoin as a currency, with the physical nature of these machines consuming power and doing these calculations.”
A day in the life of a miner
Mining for bitcoin isn’t a glamorous job.
“When we first got here, we were setting up racks, creating the network infrastructure for the internet, and we essentially had to wire everything,” he said.
Once the physical infrastructure was up and running, Sears got into more of a rhythm. He’s now up at 7 A.M. everyday and works from eight to four. He remains on site afterwards, just in case of an emergency, and there is a technician who works night shifts so that Sears can get some sleep.
But beyond the hours, there is no typical work day for Sears.
“That’s the cool thing about this job – I don’t have a set routine that I do everyday,” he said. “Every morning, I find what needs to be fixed.”
Some days, that means Sears repairs walls and other physical infrastructure. “If we have to repair a camera, maybe I’m fixing a cable.”
But the biggest part of the job is monitoring and managing every one of those 4,500 Bitmain and Whatsminer ASICs to ensure they are running 24 hours a day, seven days a week. If even one of those machines goes offline, or is only running at partial capacity, the SCATE Ventures mine loses money.
That’s because when someone is mining for bitcoin, what they are actually doing is lending their computing power to the bitcoin network. The more machines you have online, the better your chances at winning bitcoin.
Roughly every ten minutes, 6.25 bitcoins are created. In order to mint these new tokens, a global pool of miners are all contributing their computing power to running a hashing algorithm. But these miners aren’t working in a vacuum. They’re competing against each other to see who can unlock each batch of new bitcoin first.
So the stakes are high for Sears. Being diligent and knowing how to triage issues across the entire facility is critical to success.
Some mining sites use more sophisticated software to monitor the machines, which includes checking the temperature of each hashboard within the individual miners.
But most important for Sears is just figuring out which of his machines aren’t functioning at full capacity.
“Every day, you find the machines that have stopped hashing, then you remove them from the rack, and you troubleshoot,” he explained. “You’ve got to find the problem with the machines. You’ve got to find out why it went offline.”
It could be a power outage, which would affect all the machines, or it could be a network outage which could impact all of the machines or just some.
“Sometimes they just need a power cycle or a reboot,” he said.
But the hardware fix isn’t always as simple as that.
“It could be that the fan on the individual machine that is used for cooling is broken, or maybe it’s the power supply that needs to be repaired or replaced,” explained Heller.
“It could be the hashboards themselves,” continued Heller. “Each hashboard has lots of individual chips, and those are the chips doing the calculations. I think with a Bitmain machine, if more than four chips on a single hashboard are broken, the whole hashboard will switch off. So instead of hashing at about 100%, you’re only hashing at two-thirds or one-third.”
Seasonal changes in the weather add a whole other layer of complexity.
Storms can lead to power outages or other disruptions. Heller says that in the summer, the machines can also overheat, especially at the farms which have upgraded to using more powerful units over the course of the last two years.
SCATE’s mine in Washington seems to have found a way around this problem by using its own immersion cooling technology, which involves submerging bitcoin miners in a non-conductive fluid to dissipate heat, rather than relying on fans.
Training up and getting paid
Sears may not need a diploma to mine, but taking online training courses run by Chinese engineers who work for Bitmain has gone a long way toward helping him repair specialized mining equipment.
Last month, Sears and another employee completed a virtual class through Bitmain to learn how to work on the ASIC chips on hashboards, as well as the power supplies of the S17s, one of the most popular machines now used to mint bitcoin.
“I have a certification of maintenance repair, so lately, I’ve just been perfecting my skills in that category,” explained Sears. “It certifies my knowledge and gives me access to buy supplies and material directly through Bitmain.”
Next, he hopes to attend an in-person class in Atlanta, Georgia, to learn more about soldering. “The hard part is learning how to solder and disassemble a circuit board,” said Sears.
Sears’ boss, Scott Bennett, is big on giving his team access to the resources they need to get better at their jobs.
Bennett, CEO of SCATE Ventures, is a self-taught miner who started his business in his parents’ garage back in 2017, just before the last crypto “winter,” when prices of bitcoin and other cryptocurrencies plunged. Similar to Sears, Bennett once lived at one of his data centers – only he opted for an on-site camper, rather than a room inside the facility itself.
It helped that he lives within minutes of some of the cheapest power in the world.
“All of our facilities are 100% hydro powered,” said Bennett.
The mining facility where Sears works is next to the Columbia River and directly adjacent the Dalles Dam. “We love that source of power. It’s cheap, renewable, and very abundant,” he said.
As for employee pay, Sears says that he makes $54,000 a year, plus full health insurance, which is paid for by the company.
Bennett also runs some mining machines exclusively for his employees. That amounts to about .02 BTC quarterly, which by today’s price equates to a $788 bonus every three months to Sears.
“With all the miners in China going offline, the difficulty rate has been changing, so the rewards are higher,” said Sears. “The last time we got a little bit more than we did the previous time, which is cool by me.”
Mining remotely
It is also possible to become a crypto miner without physically handling any mining equipment at all.
Adam Gitzes decided in early 2021 that he really wanted to mine for bitcoin. After his wife vetoed the idea of installing equipment in their home, he began to look for alternatives.
Gitzes discovered Compass Mining, which allows customers to buy mining machines for between $5,800 and $11,700, then locates them in partner data centers and takes care of the physical logistics.
“I bought the machines on the website, Compass managed the logistics, delivering the machines to three different data centers in North America,” said Gitzes, who explained he spent 1.1 bitcoin — about $60,000 at the time of purchase — on them.
“Compass also configured them the way that I asked.”
So a typical day in the life of a miner like Gitzes consists of waking up and checking online to see how much bitcoin his machines mined overnight and to ensure that none of his units are down.
Gitzes owns six machines that he says are on the “higher end.” When China expelled all its miners, Gitzes says it doubled the amount of money that his machines generate daily.
After paying the mining pool fee of 1.25%, Gitzes’ miners generate about .0055 bitcoin a day, or $216 at today’s prices. Daily electricity costs are about $30, so he’s pulling in roughly $186 a day, or just shy of $5,700 every month. At that rate, he’ll recoup his investment in about 11 months, assuming no major fluctuations in energy or bitcoin prices.
Gitzes was so impressed by the Compass business model that he quit his job at Amazon to join the team in March. “The mission to decentralize mining and make it so that everyone can participate is something that I find really important,” said Gitzes.
