Mining Crypto – So many ways to mine

Coins Bitcoin Money Finance  - QuinceCreative / Pixabay

Okay so the rub with mining is, whatever you are using plus the running costs, you want a ROI (Return on Investment) of about 100 days. This is because the stress of running components 24×7 take their toll and will break far quicker than normal uses would. Also, if you want to regularly replace, they parts should still hold a pretty good 2nd hand value. Just look at the prices of GPU’s on eBay, 10 year old tech selling for premium prices, but be careful some dodgy sellers are flashing Graphics Cards to make them appear to be others, a common one is the GTX1050Ti which is actually a GTS450.

The main cost is always going to be electricity, if you’ve got mega cheap electric or some form of renewable energy such as solar, then maybe as a solo miner you might make a good profit.

Mining Coins Bitcoin Money Finance  - QuinceCreative / Pixabay
Mining QuinceCreative / Pixabay

What is GPU or CPU Mining?

The use of CPU’s to mine now days costs more to mine than profit you will make, to be honest it’s not even worth doing it for speculation, there is an exception to this which I’ll detail in the second part of this article.

Advanced in CPU technology have left them lagging where GPU’s are concerned. However, with Apples new ARM processors there been some limited success in mining, however the ROI is likely to be never, your shiny expensive MAC is likely to break wiping out any profits.

Most hashing algorithms can be mined on CPU & GPU’s. Popular for CPU would be something like Monero and for GPU’s Ethereum.

There is a constant war between gamers and miners to get the latest and greatest Graphics Cards, so much so that NVIDA is going to purposely engineer in a handicap so they cards are less attractive to the mining community. It would appear to be software based, so I’m sure it won’t take to long till it’s hacked, much like the many hacked bios and modifications for many Graphics Cards to boost their performance.

Mining Coins using Personal Computers….

Okay so for educational purpose or if you leave your computer on all the time and don’t use it’s full potential, you can mine using your PC or MAC, be it Desktop or Laptop.

The Easiest way to do this, would be to use the CryptoTab browser, it’s based on Chromium (Chrome) and has a miner built in which pays you in Bitcoin. Basically leave the browser open and it’ll mine for you, simple as that. You can read more about CryptoTab.

There are some other options but they are more technical to setup, so I’ll go into those in individual posts later.

What is ASIC mining?

Application Specific Information Chip or ASIC for short is a chip that’s designed to do one task, mine, so a well-designed ASIC can be power efficient and profitable. ASIC’s only work for one Algorithm so if you decide to invest in one make sure it’s the right one.

Mainly made in the far east, they have regular updates and unit costs from the manufacture are quite low but you have to commit to buy in bulk, then you have to deal with shipping costs, taxes and the like. Obtaining them direct is the most profitable, however you can buy them on a secondary market such as eBay but be prepared for big mark-ups, so ensure you do your calculations on profitability before you pull your buying trigger.

Over time even a profitable ASIC will become redundant as the mining difficult is increase and new models are released.

What is the difference between solo mining and pool mining?

Solo mining, nowdays often called Lottery mining, is where you mine on your own and get rewarded if you solve the block, but lots of others are competing for that same block. The chances of solo solving a block is very very low hence being called Lottery mining.

Pool Mining is where several miners combine their mining power and share the rewards for blocks solved, if a pool is big there is a good chance of solving blocks and sharing in those rewards.

Being in a pool means you get a steady income for your contribution.

Now there are two types of shares within a pool accepted and rejected, you only get rewards of accepted. Rejected shares cannot be avoiding, it part of the process. Now how you get rewarded differs between pools and some pools offer a choice. The most common are;

  • (PPS) Pay-per share: Allows instant payout solely based on accepted shares contributed by the pool member, who are allowed to withdraw their earnings instantly from the pool’s existing balance.
  • (PROP) Proportional: At the end of a mining round, a reward that is proportional to the number of the member’s shares with respect to total shares in the pool, is offered.
  • (SMPPS) Shared Maximum Pay Per Share: A method similar to PPS but limits the payout to the maximum that the pool has earned.
  • (ESMPPS) Equalized Shared Maximum Pay Per Share: A method similar to SMPPS, but distributes payments equally among all miners in the bitcoin mining pool.

Other less common variations include (DGM) Double Geometric Method, (RSMPPS) Recent Shared Maximum Pay Per Share, (CPPPRB) Capped Pay Per Share with Recent Backpay, and (BPM) Bitcoin Pooled Mining.

The best mining pools.

There are plenty of mining pools out there and choosing the right one can be difficult. The best of them allow you to mine in whatever algorithm you can and then choose what coin to pay out in. The more popular a pool the more chance of it solving blocks therefor more profit, however check out the fee’s they may charge too.

Slush is the most recommended for beginners even though it is not the largest of pools.

The biggest and most popular pools are;

  • Antpool (mines about 25% of all Bitcoin blocks)
  • BTC (mines about 10% of all Bitcoin blocks)
  • Bixin (mines about 8% of all Bitcoin blocks) – Chinese
  • F2pool (mines about 6% of all Bitcoin blocks)
  • Slush (mines about 3% of all Bitcoin blocks)

But once you get mining join a few pools and try them out, sometimes is good to switch to different pools is you start to see lower earnings.

Also, checkout the fees for each pool, and be wary of the 0% fees as these pools may be keeping transaction fees to cover their costs. Normally transaction fees are split amongst the miners with the block reward.

Where to buy ASIC miners

If you have the money, then buying direct from the manufacturer such as Bitmain, ; Baikal , Ebang , Innosilicon. However doing so may be buying in quantity and dealing with taxes.

The next best is from a 3rd party seller, stick to established platforms with buyer protections such as eBay , Amazon , or Aliexpress.

There are also hobby miners operating off USB made by Gekko Science, TTbit and FutureBit.

What is a mining rig?

Mining Rig is a fancy name for a computer with a load of graphics cards. To this day these are used to mine Ethereum and other coins that there is no ASIC for.

Although technically a gaming PC with 2 graphics cards could be called a mining rig.

How to build a mining rig

There is not a lot of difference building a mining rig to that of a Desktop PC. However you are going to want a motherboard with a lot of PCIE slots designed for the job of mining.

And you’ll want a monster PSU, a 500W job isn’t going to cut it, Aim for Gold or Platinum rated from a good brand, you don’t want it going Bang and taking out a bunch of expensive graphics cards.

You’ll need some kind of frame to mount this all in along with ‘Risers’ so you can install the graphics cards.

So far as Memory, Hard Drive, CPU, you don’t have to spend a lot on those, just basic ones will do.

Now graphics cards, you’re going to want the biggest available, the one that every gamers wants to own, yeah the mega expensive ones. Do research this area a lot, as it’s fast moving and some graphics cards are better than others. The main thing is they need plenty of onboard ram as the DAG file of Ethereum grows all the time.

Hosted

Hosted Mining is where you purchase an ASIC and pay a firm to operate your ASIC in their facility.

Hired/Rented

So, this is where maybe you pay someone on eBay to mine at a certain hash rate for a period of time. Another way is at Nicehash where you can do the same through their market place. Generally, in both places they will send their hashes to whatever pool your using.

Cloud Mining

Mining at home for most people is unfeasible, it’s noisy, guzzles electricity and creates a lot of heat.

So, Cloud mining is where you buy a Contract, which gives you a specific hash rate for a specific period of time. You get your mined crypto less a maintenance/electricity fee.

If crypto prices are up and mining difficulty doesn’t change you have a good chance of a nice profit. But if the difficulty goes up, reward per block goes down, fees go up, crypto prices go down or a combination of several these, then you could loose. It’s an investment and like any investment you are not guaranteed the safe return of your capital.

A lot of Cloud Mining companies have shut and there have been a great many scam sites.

Companies that are still operating are Genesis Mining, EoBot, Hashflare, Hashing24

For a more indepth look into Cloud Mining

DISCLAIMER: This is a guide based on my experiences with Bitcoin and other cryptocurrencies and is not an endorsement of the goods or services mentioned in this guide. This is not legal advice or financial advice and any investments you make in cryptocurrencies are at your own risk and you should seek advice from a professional financial or legal advisor. The author has tried to make the guide as accurately as possible at the time of writing, and takes no responsibility for the information given in this guide.

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