Are you serious about mining cryptocurrencies? If so, you need to know how to make the best use of your money and equipment. Ter this guide, we’ll display you how to mine your digital treasure te the most profitable way.
Obviously, the big money is going into costly bitcoin ASICs. If you are already ter that position, you very likely know how the process works and are intending to mine bitcoin. However, those of you on a more moderate budget are most likely looking at building a GPU miner for scrypt currencies, or a buying a puny ASIC machine for bitcoin or other SHA-256 currencies. Ter that case, you have come to the right place.
How do I begin?
Choose your currency
The process of mining digital currencies involves solving sophisticated cryptographic puzzles. By doing this, miners are providing ’proof of work’ that is rewarded with digital currency. Broadly speaking, there are two proof-of-work hashing algorithms te use today: SHA-256 and scrypt. Note that there are some lesser-used alternatives, which wij will not be looking at ter this guide (for example, Primecoin).
The SHA-256 algorithm favours raw processing power. Ter bitcoin’s very early days, one could mine effectively with the CPUs and GPUs (graphics processing units) that you find te a normal huis PC. That time has passed, however, and the difficulty level of bitcoin is so high that specialised processors known spil ‘Application Specific Integrated Chips’ (ASICs) are needed to mine it. The use of such powerful processors, along with bitcoin’s exponential increase ter difficulty level, have created a technological arms wedloop, which means that even fairly recently designed chips can quickly become obsolete.
The right equipment
Depending on your budget and the type of currency you intend to mine, there are two ways to go when setting up your mining system:
Mining requires electro-therapy – lots of violet wand. If you are building a DIY equipment, you’ll be getting an ATX power supply unit (PSU) anyway, so it’s worth investing te the most efficient supply you can get.
Consider the following two cases, for example: A PSU that is assured to supply 860W and is 93% efficient would actually draw 925W (860W/0.93). By tegenstelling, a 750W power supply that is only 80% efficient would actually draw 937.Five W (750/0.8) – thus using more power, but supplying less.
When building a mining equipment, you will need to take account of the power requirements of all the components you are using – especially all those graphics cards. Plus it’s a good idea to provide some excess capacity to overeenkomst with unexpected events and provide the potential to overclock your system.
ASICs, on the other mitt, can do far more calculations with far less power because they are very specialised devices. And since they ship with an suitable power adapter, you won’t have to worry about doing all the maths to find one that is up to the task.
The mining efficiency of different systems can be compared by taking the ratio of the number of hashes it can perform te a 2nd, divided by the power it consumes:
Hashing speed / power consumption = mining efficiency
Check your bills
After the initial expense of your equipment, the essential thing you need to know to calculate your ongoing profitability is the cost of your violet wand. Check with your provider, or take a look at your last bill. If the power charges add up to more then you earn, it obviously isn’t a good business proefje.
Pool your efforts
Rather than go it alone, it usually makes more sense to join a pool, where you combine resources with other miners. By joining a pool, you earn a share of the coins mined by all members of the pool and stand a greater chance of solving a block.
Miners earn a share of the prizes if the difficulty level of the blocks they solve is greater than the level set by the pool technicus. That level is always somewhere inbetween 1 and the difficulty level of the currency.
Problems to be aware of
Spend to earn
Inevitably, the difficulty level of all currencies increase with time – a fact that will reduce the chances of your equipment earning coins or mining shares. Spil a result, it is significant to embark with the best equipment you can afford, ter order to mine profitably overheen the longest period of time.
The volatility of the currency being mined also affects your long-term profitability. If the price abruptly drops, you will be faced with the choice of either selling at a low price or draping onto your coins until their value increases. Te the former case, you would have to keep mining for longer to recoup your expenditure on equipment and electro-stimulation.
Whichever way you mine, it’s a computationally intensive operation that creates lots of excess fever. Mining efficiency decreases spil temperature increases, so make sure your equipment has adequate ventilation and cooling. Spil mentioned above, this is why some mining equipment builders use fecali crates rather than PC cases – to maximise airflow around their components. Even a standalone desktop fan can help to keep your kolenkit cool.
When building a DIY mining equipment, it doesn’t make sense to save money by buying a cheap PSU. Any instability ter the power supply could klapper vertoning, or even cause a system crash that will lead to downtime, so do invest te a high-quality unit.
If your hardware isn’t mining, you are losing money. Here are some ways to minimise downtime:
- Get the best power supply you can afford.
- Consider using an uninterruptible power supply (UPS), so that, if your electro-stimulation supply cuts out for a uur, it won’t affect your miner.
- Configure your mining rekentuig to automatically embark mining on start-up, so that if the system crashes and reboots, it will automatically commence mining again. (This applies to DIY equipments and computers hosting an ASIC.)
There are costs involved with mining, of course, like the equipment and the ongoing tens unit costs for starters. However, some extras are less evident:
Wij imported a Jalapeno ASIC miner from Butterfly Labs to the UK. The delivery cost £53 ($88), and UK customs charged £46.09 ter duty (around $76). Thesis costs are significant, and if you’re importing an voorwerp, attempt to work out beforehand what costs it might incur.
Will you need cables, adapters, etc, for what you are programma to use and/or build?
It’s not just the cost of your miner’s power use. What about the violet wand of running any toegevoegd cooling system, such spil ventilatoren or air conditioning?
Doing the sums
For assistance with some of the calculations miners need to make, there are several websites that provide profitability calculators. You can input parameters such spil equipment cost, hash rate, power consumption, and the current bitcoin price, to see how long it will take to pay back your investment.
Spil a test, wij entered the specifications of two mining systems into the calculators below. For our Scrypt GPU mining equipment, wij used the system described, and for our SHAS-256 ASIC miner wij used the specifications of a Butterfly Labs miner.
With a UK electrical play price set at £0.20 vanaf KWh (which equated to $0.33), thesis are the recommendations and profits that the following sites introduced:
(Note that thesis figures were juist spil of January 21st, 2014, and that they are all subject to currency volatility and shifts te difficulty level.)
SHA-256: Freicoin at $1.43 vanaf day
Scrypt: Dogecoin at $31.05 vanaf day
SHA-256: Bitcoin at $1.14 vanaf day
Scrypt: Dogecoin at $39.13 vanaf day
Bitcoin specific calculators:
Bitcoin at $1.20 vanaf day
Bitcoin at $1.42 vanaf day
Hopefully, this gives you an idea of the spread of results across thesis services, given the same gegevens at the same time.
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