In this article, we will look at the technical features of the operation of devices for cryptocurrency mining. When a beginner starts mining cryptocurrency, they often face difficulties. This applies to both software and hardware compatibility for efficient mining.
What mining software should I choose? How to start the process? What is a Mining Rig? These questions often bother novice miners. We will compare different options and offer you the most suitable one. The article will compare four variants of mining hardware, namely CPU (conventional computer processor), GPU (video card), ASIC (specialized processor for Bitcoin mining), and Cloud Mining. We will compare these options in pairs.
CPU or GPU Mining: What to Choose?
In the Bitcoin network, miners use processors (CPUs) or computer graphics cards (GPUs). Within the Bitcoin protocol, GPU mining is a more appropriate option than CPU usage. The technical features of the video card allow you to make Bitcoin mining more convenient, and now we will explain why.
A computer unit not only performs program tasks but also controls the operation of the hardware and many other programs. This reduces the speed of its performance during cryptocurrency mining since a CPU can be overloaded with tasks. This is especially true for home mining when an individual miner works with only one computer. CPU mining does not keep up with the new products of the crypto market, such as video cards and ASIC (see below).
A GPU, or video card, is focused on a single task. A GPU processes only the elements related to graphics, so this device will not be overloaded during Bitcoin mining. With several powerful cards, you can create a highly productive farm.
This feature of video cards allows you to perform many cryptographic operations and increase the mining power compared to the processor. We can say for sure that in the cryptocurrency community, GPU mining has won CPU mining.
What Do I Need for GPU Bitcoin Mining?
Let’s clarify the mining hardware complexion in GPU mining. A full-fledged mining farm consists of several blocks. Each block includes four to six video cards and is called a Mining Rig. Each GPU Mining Rig is an installation of a GPU, motherboard, processor, RAM, and hard disk. You will also need a frame and accessories for the GPU Mining Rigs (cables, adapters, etc.). Miners use Mining Rigs because it is impossible to connect an infinite number of video cards to a single power supply or processor. Thus, Mining Rigs are used to distribute the load during mining Bitcoins.
The user can independently build a Mining Rig. If you have dealt with hardware, you will definitely understand this system. You just need to connect all the elements and put them in the frame. There are many instructions on the internet, and even new miners can handle this task.
After installation and configuration, you can mine cryptocurrency automatically. You do not need to constantly monitor each mining operation. It is enough to see if everything works several times a day. If not, you need to restart the miner. Watch out for hash speed! If it slows down, you may need to restart the system.
Video Cards for Cryptocurrency Mining
With the growing popularity of Bitcoin mining, various powerful video cards have begun to enter the market. New devices are increasingly complex. In the current Bitcoin mining, computing power is significantly increased. This is related to the crypto mining process in that the level of mining difficulty has extremely grown. Mining difficulty is a special parameter of the algorithm that determines the period to search for a new block (hash). It works based on a special calculation algorithm.
This algorithm is called Proof-of-Work (PoW). In the Bitcoin Blockchain and other cryptocurrency networks, Proof-of-Work is used to confirm transactions and create new blocks. With PoW, miners compete with each other to complete transactions on the network and for a block reward. This parameter, along with others, determines the accuracy and speed of the Blockchain. Besides, Proof-of-Work protects against attacks on the network. Verifying transactions is also the task of this algorithm. Since this is an important element in Bitcoin mining, Proof-of-Work requires high-power equipment.
Therefore, for productive mining cryptocurrencies, you need a video card that will allow you to create a farm with a performance of at least 2000-3000 kH. For today, this is a sufficient indicator to recoup the costs of mining hardware in terms of increasing the level of complexity and validity of Bitcoin (or any other crypt that you prefer). Miners receive more than $ 300 in this system.
There are two leading manufacturers in the field of video cards for Bitcoin mining, and these are Nvidia and AMD. Nvidia’s video cards, under their technical characteristics, are not able to offer effective solutions to the miner. More and more miners are using equipment from AMD, which is cheaper, more productive, and differs in less power consumption.
How To Choose a Video Card
The full list of video cards for Bitcoin mining is available on the portal. When choosing a GPU, it is important to consider such parameters as:
- Operating system. Linux supports up to 8 graphics cards, but the installation is quite difficult for many miners who are just starting. Windows 7 and 8 are easy to install but support up to 4 and 5 cards accordingly.
- Drivers. Incorrectly selected drivers will significantly reduce the hashing power. The correct installation shows a high rate in the search for a new block.
- Compatibility. All the above-mentioned components of the mining farm should be suitable for each other, even if they are devices of different companies. You will not be able to quickly mine cryptocurrency if the elements of the system are not well suited to each other. Only the right choice of motherboard, RAM, and other hardware allows the maximum speed to enter the mining pool.
- Card manufacturer. Some manufacturers set a limit on the maximum power of the video card. This does not allow a Bitcoin miner to speed up the device to maximum productivity. Accordingly, you will not be able to increase the hash rate at will. The solution to the problem may be a reconfiguration of the BIOS of the GPU, but it requires certain skills. It will be difficult for novice Bitcoin miners to do this without damaging the system.
In the world of mining cryptocurrency, there are no template solutions, so you need to select hardware for the compatibility of indicators. For example, to implement Scrypt mining, you need 4 GB of RAM with careful selection of the power source and calculation of the actual power. With a power supply of 1000 W, the permissible maximum load is 800 W.
You also need to consider the resource consumption of the processor, hard disk, and peripherals. The power usage level is important because electricity costs are a deduction from your crypto mining earnings. Please pay attention to the overclocking performance of the video card during mining Bitcoins. The more overclocking parameters of the GPU device, the more high-quality cooling is required for the farm, which implies the equipment of the system with powerful coolers.
When we have discussed the hardware to start mining, let’s move on to the issues of Bitcoin mining software. There is a program to mine cryptocurrencies that is suitable for mining via video cards. It is the CGMINER, a flexible, stable, and customizable program. Its latest version supports the production of cryptocurrency on video adapters 3.7.2 with a minor impact of the version on the rates of mining speed.
- Setx GPU_MAX_ALLOC_PERCENT 100 – full use of video memory resources. The default is 25 percent;
- Setx GPU_USE_SYNC_OBJECTS 1 – exclusion of mining through the processor;
- Scrypt – compatibility with the Litecoin-algorithm;
- Intensity (1-20) – control the intensity of mining, taking into account the fact that high rates can negatively affect the hash rate of production, as well as provoke the occurrence of a large number of HW errors and incorrect calculations. In the absence of a given intensity value, CGMINER independently regulates this indicator, which reduces the production rate of cryptocurrency;
- Shaders – an indication of the number of shader units within the video card and the possibility of selecting other parameters for setting up the video card. You should always check this parameter: Nvidia cards differ by a small number of shader blocks, which greatly reduces the efficiency of mining crypto coins. If there is no specified parameter, the CGMINER automatically selects it based on the system characteristics;
- Thread-concurrency – management of optimal indicators of the volume of calculations performed by the Scrypt algorithm. For productive Bitcoin mining, the value of this parameter should be set multiples of the number of shader units of the video adapter. With the Shaders value specified, you cannot configure this parameter;
- Lokkup-gap – regulation of the interaction of the memory of the video card and performance indicators. The maximum value corresponds to Lookup-gap 2 – there is a release of a larger amount of memory with a decrease in the speed of mining. If this value is not specified, it is determined by CGMINER taking into account the two previous parameters;
- Worksize (-w 256) – slightly affects the system. You need a multiplicity of 64, and the maximum is 256.
There are options for advanced users who have been mining Bitcoin for a long time. When working with some video adapters, the parameters are indicated in order with a comma separating. It should be noted that if you reduce the CGMINER stats during startup or when there are HW errors that can cause unstable GPU operation, you need to check the device parameters. At excessively high values, the equipment performance can be significantly reduced, and you can’t mine Bitcoins as fast as possible.
GPU or ASIC Mining?
Along with video cards, there is an equally common way to mine cryptocurrency in the Bitcoin Blockchain. This device is designed for mine crypto and is called Application Specific Integrated Circuit (abbreviated ASIC).
Technically speaking, an ASIC is a chip that performs a certain type of task. ASICs were used to speed up graphics devices as early as the 1980s. In the 21st century, these chips have been widely used in the crypto world. It allows ASIC miners to decrypt the algorithms that are at the heart of a particular blockchain.
It makes no sense to compare ASIC with CPU mining because a separate device is much more productive. Mining Bitcoin, you should choose between ASIC and video cards. Compared to the GPU, ASIC has a higher performance, as it is designed specifically for Bitcoin mining work. It is easier to set up because it is a ready-made device, and it does not need to be built like a GPU farm.
Significant disadvantages of ASIC mining are that the device is very difficult to repair, its market price is high, and it can not be used for other tasks. If you decide to do cryptocurrency mining through ASIC, read the next section that will tell you how to choose a device.
What ASIC should I Buy to Mine Bitcoin
An ASIC miner can buy both new and used devices. Of course, the second one will be much cheaper. The main platforms for selling used ASICs are telegram channels or cryptocurrency forums. You will rarely find many such offers freely available on the Internet. If you are a novice user and do not want to make large investments, buy a used ASIC to start mining Bitcoins.
Whether you are buying a new or used ASIC to mine Bitcoin, consider the following features:
- Hash rate. The higher it is (measured in TH/s), the more Bitcoin cash you will be able to mine.
- Power consumption. A very important factor for calculating the electricity price that you pay. The more kilowatts an ASIC miner consumes, the greater the deduction from mining rewards and earnings.
- The cost of ASIC. When buying a device for Bitcoin mining, consider not only the initial cost but also the fee for duty, tax, and so on. A retail price will always be higher. The newer the device, the more efficient it is. But the new ASIC can be very expensive, which is unacceptable for new Bitcoin users.
Now that we have considered the main ways of mining let’s move on to the concept of the Mining pool. What is it, and how does it work?
Why Enter the Mining Pool?
A mining pool is a platform for cooperation between you and other miners. This option allows you to mine more Bitcoins than individual miners can do separately. Accordingly, the responsibility for electricity and maintenance costs is shared by all participants.
Therefore, users can mine cryptocurrency without interruptions. If one of the miners has a collapse, the electricity or the Internet is turned off, the system continues to work. Mining pools make it possible to regularly receive coins, as the computing power of many users is combined in one center. Bitcoins that were received in the Mining pool are divided into all entrants.
To join a Mining Pool, just create an account on its official website. After registration, you can start mining together. You can choose from many Mining Pools, as many are now freely available. Since Blockchain technology does not provide the ability to create fully automated Mining pools, each pool has an operator. Miners pay operating costs for sharing the Mining Pool.
Is Mining Possible Without Hardware?
Beginners in crypto often ask this question. Yes, it is possible! There is cloud mining. This is an environment for storing mined Bitcoins without special hardware. Like any other cloud server, cloud mining is the property of a large company that provides this platform to users for a fee.
The offer is very tempting for new Bitcoin miners. However, you should beware of fraud, which is a vulnerable side of cloud mining services. After all, with cloud mining, you do not see the company’s equipment and do not know if it exists at all. You don’t see hash rate information and many other indicators of conventional mining. Therefore, you can use cloud mining only if you are confident in the company’s activities.
How Long Does it Take to Mine 1 Bitcoin?
The time of earning one Bitcoin depends on the availability of your equipment and the correct configuration of software. For example, on a farm of six Nvidia GPUs, you can mine 1 Bitcoin in six years. However, all predictions are very vague, whether you use video cards or application-specific integrated circuits. Everything can change due to environmental factors, such as currency volatility, the degree of mining difficulty, the volume of transaction fees, the cost of electricity in your region, etc.
The cost of mining 1 bitcoin varies significantly, especially depending on which farm is used and the electricity tariffs in a particular country or region. When calculating the cost of mining 1 bitcoin, you need to take into account the hash rate, the pool commission (if any), and electricity costs.
Is Mining Worth it in 2021?
Bitcoin and other crypto miners actively continue to mine cryptocurrencies. This remains a significant source of income or access to cryptocurrency exchanges for many users. Given the quality of the equipment, which is constantly being improved, this activity can be considered very appropriate.
What Happens to Bitcoin After All 21 Million Are Mined?
Given the current Bitcoin mining process, by around 2040, users will have mined the last Bitcoin. This does not mean that the Bitcoin network will collapse. Most likely, transaction fees will be included in the case.
Currently, transaction fees paid by users are very small, but in the future, their increase will be the basis for maintaining crypto activity. The fees and contributions will create a new network that will allow the cryptocurrency world to exist.