This is a beginner’s guide to cryptocurrency mining, in it you will find everything you need to know about how cryptocurrency mining works, how to start cryptocurrency mining, what cryptocurrency is worth mining and much, much more. Cryptocurrency is a whole new world, and one that is growing at an exponential rate, there is no reason why you can’t be part of it too.
Bitcoin Mining equipment is easy to come by, there are dozens of outlets for high GPU cryptocurrency mining rigs. The trouble is not in getting the equipment so much as it is in setting it up, maintenance, air conditioning, and electricity, the core issues surrounding cryptocurrency mining profitability. We’ll fill you in on all the details, and some alternatives you may not be aware of.
Mining Rigs vary by type and model but are all the same thing at heart; an energy-hogging, highly sensitive piece of equipment that takes skill and knowledge to maintain. These factors may make cryptocurrency mining less feasible for some potential miners but there are solutions for you too. You’ll have to read to the end to find out what they are.
Cryptocurrency Mining, From The Beginning
To understand cryptocurrency mining you have to understand what cryptocurrencies are and what they are not is money. Cryptocurrencies are the outward form of what we know as blockchain and distributed ledger technology (DLT). Yes, cryptocurrencies are the tokens that make blockchain and DLT work, yes they are usually based on some form of financial transaction, yes they can be a valuable commodity but no, they are not meant to be money, at least not yet.
What is distributed ledger technology? DLT is a means of decentralizing record keeping that is always accessible to the public and fully accountable through multiple, redundant layers of auditing. Each cryptocurrency, down to its smallest tradable portion, is a token for place keeping. Every time the token changes hands it is recorded on the blockchain and verified by multiple independent sources. Each recorded transaction is like a check written from one account to another, transferring a value. The value could be money, electricity, automobile inventory depending on the blockchain, the point is that the exchanges are tracked very closely, are free of fraud and require no third party to handle them.
The term blockchain refers to the transactions recorded on the DLT and the nature in which the ledger is maintained. The transactions are bundled into blocks and the blocks are linked in a chain forming the blockchain, blockchain. Each block in the blockchain has a set number of transactions and is comparable to a box of checks. Once there are enough cryptocurrency transactions to fill up a box or block it is closed and sent to the network for verification (audit). Every node (the miners) on the network gets a copy of the box and does an independent audit of the box to verify the contents. When the requisite number of confirmations are received the box is deemed verified, added to the blockchain and all the transactions contained within it are finalized.
- All Bitcoins (or other cryptocurrency tokens) are 100% traceable through the blockchain to their point of origin AKA the time of mining.
DLT is a trustless technology, this means you don’t have to trust in third-party services to use them. When you use the Internet to pay with Visa, Mastercard or some other payment processor they, the processor, debit your account and then credits another so that both you and the recipient have to trust in the third party to complete the transaction. Blockchains transactions are direct from one account to another with no middleman. The middlemen, the payment processors, each keep their own ledger, a ledger which is not verified as frequently as a blockchain and one that is vulnerable to attack and fraud. With Bitcoin, anyone can view the ledger at any time to verify any transaction on the list.
In order to make the blockchain system work, there is a reward for the nodes (they aren’t just supporting the network for free) and that is where cryptocurrency mining comes into the picture. The nodes are the miners and the miners are the ones providing the power that drives the cryptocurrency universe. Their computers support the DTL, help distribute it among the network, verify the transactions and the reward is newly mined Bitcoins, or whatever type of cryptocurrency it is they are mining.
There are many different types of cryptocurrencies as well as different methods of mining that make them all very unique. In most cases, cryptocurrency mining networks are set up with a certain number of tokens in circulation to start, and more held in reserve to serve as mining rewards later. The first and most notable cryptocurrency is Bitcoin and that is how it is set up. Only a few tokens were issued with the launch of the system with most held in reserve for the miners. The ones held in reserve have slowly been issued over time in reward to the miners for supporting the network and will eventually all be found.
There are a total of 21 million possible Bitcoin tokens to be found. Of those about 17 million have already been found which leaves about 5 million left, or about $37 billion when BTC is trading for $7,500 US dollars. Oddly enough, an estimated 3 – 5 million tokens have lost or are unrecoverable in some way. It’s not that no one knows where they went because you can see them all on the blockchain, it’s that some wallets have been lost or forgotten about, or cannot be opened, making the tokens as good as gone.
What Is Hash Rate?
Hash rate, or hashing power, is a measure of the output of a cryptocurrency mining operation which is either a computer, a rig or a mining pool (more detail on all of those later). In simplest terms, it is the speed at which a rig can compute functions on the Bitcoin network and is important to know because the faster a rig can hash the algorithm, the faster it can find new blocks and find new BTC’s.
- The hash rate of any mining rig is usually offered as part of the sales pitch. Higher rates are favorable so be sure to compare when shopping for your equipment.
When speaking of hash rate there are several different hash rates to be aware of. The first is your own hash rate, important for calculating the profitability of your rig. Another is the global hashrate, it is a measure of all the hashing power of the entire Bitcoin network. The global hash rate is constantly growing as new miners join the network, it is also used in the process of determining the difficulty level for each block that is mined. Another hash rate good to know is the rate of your mining pool and how it relates to the global hashrate as it has bearing on your own profitability.
Orphaned blocks and stale blocks are two terms every miner will become aware of sooner or later because they can have a serious impact on your hashing power and mean lost revenue. In some instances, two blocks can begin to form simultaneously and will result in an orphaned block when one of the two is abandoned in favor of the other. When this happens both blocks exist for a short time until the one with the longest confirmed chain is accepted as the original. In this case, only the miner with the original blockchain is awarded the new token and the other is rewarded with nothing. Stale blocks are when a mining rig continues to work on a block that has already been found instead of moving on to the next new block.
In order to maintain Bitcoin’s value, and to prevent the mining community from oversaturating and finding all the unmined tokens at once, the requirement to earn a new Bitcoin, the mining difficulty or time it takes to find a new Bitcoin, has slowly risen in tandem with network growth. The bad news is that the difficulty of finding a Bitcoin is always rising as the global hash rate continues to grow.
The Three Basic Types Of Cryptocurrency Mining You Need To Know
1 – Proof Of Work Is The First Method Of Cryptocurrency Mining
Proof of work is the most common form of cryptocurrency mining although many networks are moving toward proof of stake (or at least talking about it). Proof of work was first introduced in 1993 by Cynthia Dwork and Moni Naor, long before the Bitcoin whitepaper was published, and is an important stepping stone to DLT because it provides a framework for trustless and distributed consensus, the very foundation of Bitcoin’s success.
In a nutshell, proof of work (PoW) is a computer protocol aimed at preventing cyber attacks against a network. Attacks like Distributed Denial of Service (DDOS) target networks and overload them with exhausting amounts of fake requests which ultimately cause them to crash. When applied to blockchain it means reliable transactions safe from a hack.
Bitcoin employs a one-way hashing algorithm called SHA256 (secure hash algorithm 256) to verify transactions on the blockchain and prevent fake requests from tying up the network. SHA256 works by turning any input into a 256 bit (64 character) output that, with only the slightest change to input, creates completely different outputs with each use. This means passwords that are easy to create and easy to verify once found.
The Proof of Work network requires all users (miners) to solve a complex mathematical puzzle in order to prove they “found” the block. The miners are competing against each other in order to win the right to mine (log it onto the blockchain) each block. The miner who solves the puzzle first verifies the block and sends it out for further confirmation within the network, earning a newly mined Bitcoin in the process. Solving the puzzle requires a large amount of computing power, power that equates to electricity and cost to the miners and ultimately supports the price of each Bitcoin.
The actual proof of the work is finding the nonce. A nonce is a non-repeating number included within each block that gets included in the hashing algorithm to set the difficulty level of each block as it is mined. Solving the initial puzzle is hard but doesn’t take much time, it is the hashing and rehashing of the block in order to find the nonce that is time-consuming and eventually triggers the broadcast of the newly found Bitcoin block. What the nonce does is create a series of zeroes ahead of each blocks answer. The number of zeroes is proportional to the difficulty of the block. Computers find the nonce by hashing and rehashing the algorithm until they come up its value, a string of code deemed infeasible to predict.
Bitcoin’s difficulty level, or the amount of computing power it takes to mine a Bitcoin, resets about every two weeks. This means that, as time goes on, the amount of Bitcoin that is received for finding each block decreases. This is an integral part of the Bitcoin mining process and will have an impact on your earnings so be warned, your estimated earnings from mining are only as good as the next blockchain difficulty reset.
2 – Proof of Stake Is the New Age Of Cryptocurrency Mining
Proof of stake is a newer form of cryptocurrency mining that first came to light in 2011 on the Bitcointalk forum. It is based on a deterministic method which depends on the wealth, or stake, each miner has within a block and assumes that hashing and rehashing algorithms is unnecessary.
The biggest difference between Proof of Work and Proof of Stake is that in the first anyone can participate and mine digital currency so long as they have the computing power to compete with large, well-established mining operations. In the second, proof of stake, you have to have permission to join before you can participate in the network, receive the ledger and mine the blocks.
Another major difference between proof of work and proof of stake is how the miners mine the tokens. In proof of stake networks, all the tokens that will ever exist are created at the beginning of the blockchain’s life and distributed according to a plan laid out in the white paper. Instead of earning newly mined coins miners in the proof of stake network earn a transaction fee.
Each transaction across the proof stake network is tagged with a transaction fee which is used to pay the miners which is in effect a mining fee. Miners collect cryptocurrency transactions on their mining rigs and then distribute to the network when a block has been formed. The method of payout is variable in this type of network and there are some differences of opinion within the development community. Basically, miners who’ve contributed to the block earn a portion of the total fee per block, once the block is verified, prorated by the number and value of transactions they have processed.
The most notable benefit of the proof of stake concept is its cost-effectiveness. With proof of work, miners are burning up electricity at alarming rates as they compete to be the fastest, the more miners there are the more electricity they use in the quest to be first, a process that is both wasteful and unfriendly to the environment. Proof of stake removes the cost of electricity from the equation and provides a means of perpetuating the network (rewarding the miners) that is more sustainable.
The biggest criticism of proof of stake is that inevitably, certain miners will be favored over others resulting in an unwanted centralization of the network. Things like the age of the miner/operation, percentage of tokens held by the miners and the balance of address are among many means of differentiation that are being considered. The bad news for proof of stake is that the only thing developers can agree on is a marked lack of consensus among those working on the concept. Ethereum is one network considering the switch but there has been no move in that direction yet, as of this writing it is still an easily mineable cryptocurrency.
3 – Proof of Burn May Be The Mining Concept To Rule Them All
Proof of burn is another mining concept gaining traction among cryptocurrency developers although its use is far from mainstream. It is a proof of work protocol that seeks to burn, or remove from circulation in an unrecoverable way, tokens from one network in order to launch new token on another network. The idea is that burned or unused token value will be added to the newly created network, creating new wealth. For example, if it were to take 60,000 kilowatt hours to create 10 Bitcoins and those 10 Bitcoins were burned to make 60,000 new Pick-A-Coins each new Pick-A-Coin would be worth 1 kilowatt hour. The trick, of course, is knowing which currency to burn, and which ones to create.
What Is Bitcoin Mining Equipment, And How To Mine Bitcoin
Bitcoin miners, or Bitcoin nodes, use their computers to verify blockchain transactions. The verification is done using processing power which means the more power you have and the more efficiently you use it the more successful you will be. When it comes to mining equipment they, the Bitcoin mining rigs, are typically rated in three areas; the cost for the equipment, the amount of power they use per hashing function, and the amount of time it takes to make X amount of Bitcoin. In the case of mining rigs, they are all usually working on the GPU (Graphics Processing Unit) method of mining versus CPU method (Central Processing Unit), but more on that later.
A Bitcoin mining rig, also known as ASI device (application specific integrated circuit) is a specialized computer (can run on Windows, MacOS, Linux or other operating systems) that employs dozens, hundreds or even thousands of specialized computer chips to perform thousands of complex algorithmic operations per second, over and over, all day, all week for months and years.
The good news is that there many Bitcoin mining rigs available for home use by smaller mining operations and hobbyists. The bad news is that, on average, as of 5/22/2018, the cheapest and most reliable are only able to create an average 0.1350 BTC per month which makes their operation a break-even endeavor at best. The Antminer S7, long a standard for the hobbyist, is now, with Bitcoin trading near $8,250 USD, no longer able to turn a profit without really cheap electricity. This does not mean it can not make a profit but you will need to live in Venezuela, Iceland or another location with super cheap energy and low average temperatures to do it.
Using the Bitcoin Mining Efficiency Tool at Cryptocompare.com the estimated return on the operation, not including the cost of the Antminer S7 (about $500), is -($1.12) per day in the US, or more than -($400) per year. The next level up, the Antminer S9, has nearly 9 times the hashing power, a much better efficiency rating and is able to turn a profit in today’s market in most countries that allow mining.
Using the same tool the estimated return of operation for the Antminer S9, not counting the initial investment (about $2200 including power cords), is about $837 per year. Assuming that the difficulty rate does not go (it will) and BTC prices hold steady (it won’t) it will take 3 years to recoup the cost of the rig and show a net profit.
If you think the price of BTC is going to go up like we do, owning and operating a solo mining rig could be quite profitable. The trick to profitability is to find the best, most efficient miner you can and new models are always available on the Internet. eBay is a great place to find the latest mining gear.
What many new miners don’t realize is the tremendous amount of heat generated by cryptocurrency mining rigs, a factor that cannot be ignored. The rigs use hundreds of high power microchips to perform thousands of hashes a second and that takes a lot of power. That power is released in the form of heat and the heat can be very damaging to your equipment and make living near it uncomfortable in the least. This means the additional cost of cooling the rigs which must be factored in. This is why so many large mining operations are located in extreme locales, places where electricity is cheap and the average temperatures are low.
At the very least you should expect to need fans and plenty of ventilation to keep your rig running smoothly so be sure to factor this cost into your equations. For best results, you will need to keep your rigs operating at or below normal room temperatures which means you could, theoretically, heat your home with them but that will only work for part of the year.
This Is How To Set Up A Bitcoin Mining Rig
If you have already chosen and purchased a mining rig most of the hard work is already done. If not, take some time to familiarize yourself with the different types of rigs, the expected output, profitability and user instructions before getting started, and then go get one. If you’ve chosen an off-the-shelf version that is set up and ready to go, getting started could be as easy as plugging it in, joining a mining pool and connecting your wallet.
Mining pools are groups of miners who join their hashing power over a network in order to compete with large mining operations. The concept of pooling originated when the difficulty level of mining a block reached a point that slower miners would only be able to find one every few years. By pooling resources, the slower miners were able to produce more consistent returns on a regular basis. Rewards are split equally among members according to the hashing power of each account with some variation among from pool to pool. Basically what happens is a share of the mining reward is awarded to each member who can present a valid partial proof of work.
If your rig is not set-up for a specific cryptocurrency you will need to do that first and it can take a bit of time. To mine Bitcoin the first step is connecting your rig to the Internet, verifying its location and downloading the complete Bitcoin Client. The Bitcoin Client is all the software required to join the network, compete for blocks, engage in and verify transactions on the Bitcoin blockchain. If you are using a slow Internet connection be warned, this will take several days, it may be in your interest to get a faster connection or go somewhere you can use one.
The next step is to download a Bitcoin mining software package and there are several to choose from. The best Windows Bitcoin miner is debatable and all have their pros and cons but more on that later. After you download your software and get that set up all that is left is to join a mining pool and get to mining. You don’t have to join a pool but it could be a long, long time before you earn a block if you don’t so it is recommended.
Some miners require a few additional steps to set up so be aware of what you are buying before you make your purchase. There are some in the Antminer (not the Antminer s9) series that require several complicated steps that can be daunting for those without a high degree of computing knowledge.
A point of note. Some Bitcoin mining rigs come with their own power supply regulators (cords) but most do not. This means you will face an additional charge to purchase one and will need to choose very carefully. The chips which run the rigs have specific power tolerances that must be met for them to function properly and avoid damage. For example, the Antminer s9 requires a constant 205v to 264v at 1600 watts and costs about $145 on Amazon.
This Is How To Find The Top Bitcoin Mining Pools
Finding the best mining pools comes down to a little research and a lot of comparisons. There are a lot of pools to choose from depending on what you want to mine, how much support you need and where you are located. Regardless, the pool you choose should be based on its size, its functionality, and its reliability.
If you are wondering if size matters the answer is a resounding yes, it does. While it is true that a small pool will find the same number of tokens (usually) over time as a larger pool, the difference is regularity. The smaller pools will find tokens in fits and spurts, sometimes finding more while sometimes finding less, while the larger pools will find a smaller number of tokens more frequently. So, the question to ask yourself is this. Do you want to earn a little all the time or a lot every once in a while?
The functionality of the pool refers to how it operates, how the website is setup and the kind of features it offers. Some of the questions you should ask when comparing pools are what does it mean when you join? How often do they make payments? Do they give enough information about the number of miners/hash rate of the pool? How do they display your personal statistics and how is it available to other miners? Do you have to register to use it and is there a fee?
The answers to these questions usually result in new miners choosing medium sized pools over the smaller and larger as they are more stable than the smaller with better services and support than the larger. The bottom line though is how much money they make and how they pay new miners. Some pools reward miners for longevity in an effort to maintain steady hash rates while others do not.
The mining pool’s trustworthiness can sometimes be hard to judge. All pools will have unhappy members or former members so don’t take a single comment or complaint out of context. Invariably, the complaints are about money. The fees are higher than advertised, the miners aren’t finding as many coins as promised and profitability isn’t as good as hoped.
What new miners need to remember is that the global hash-rate is always growing which means the number of miners is growing which means the difficulty of finding new blocks is increasing, only one of a dozen factors which affect the profitability of any mining operation. The best thing to do is view advertised results as a base-line you hope to achieve and look at how many miners are in the pool. If it has several hundred distinct mining nodes and a low incident of complaint it is likely there are no scams going on.
Most pools are located in China and that in itself poses a problem for Bitcoin. Bitcoin is a decentralized cryptocurrency exchange mechanism, the community doesn’t want the power to fall into the hands of one country or one pool. As of mid-2018, China controlled about 81% of the global hashing power, a number developers would like to see decline. The next country in line is the Czech Republic with only 10% of the global hash rate followed by Iceland, Japan, and Georgia to round out the top five.
This Is Where You Find The Best Mining Pools
#1 – This Is Why Slush Pool Is The Most Popular Mining Pool
Formerly known as Bitcoin Pooled Mining Server and Bitcoin.cz Mining, Slush Pool is the oldest operating Bitcoin mining pool and one of the largest on the planet. The system was initially vulnerable to cheating and pool hopping practices but is now based on a rewards type system that has been emulated by other pools. This system has the net effect of rewarding loyalty while discouraging pool-hopping by giving older miners lower difficulty ratings within the pool. Earnings are accumulated on the server until a user-set threshold is met and then they are delivered to a predetermined address that you provide. There is a monthly fee, 2% of earnings, which is a bit high but comes with lots of perks.
Slush Pool has earned its place as the leading mining pool in more ways than one. Not only do they boast the longest operation but the safest and most transparent operation of any pool on the network. The pool supports Bitcoin and ZCash which is a bonus, many pools are focused on a single cryptocurrency, so you have an option. Regarding Bitcoin alone, Slush Pool has mined over 1,000,000 BTC since its launch in 2010, an amount worth over $8 trillion dollars today.
Each member gets a vote in how the pool is run and the direction it is going based on their hash rate. The more hashrate you contribute the more voting power you have. The fee also gets you a high-reliability rating, nearly 100%, because the pool has servers located around the world. If one fails or gets shut down redundancy in the system will keep the network up and running.
All accounts are totally secure, as secure as the Internet can be, with wallets protected by two-factor authentication. Two-factor authentication means you will have to have an email address or phone number to receive authentication codes at the time of log-in. The best part though is customer support. There is a support team on call 24/7 for service in any time zone to help get you started, setup and mining.
The platform is awesome and you don’t have to be a member to get a glimpse of what’s going on. The home page has links to lots of information, statistics, a hall of fame, a blog and news feed for all the latest pool and industry news. The statistics they give are extensive including total hashrate, hash rate by miner size, the average time to find a block, and results from recent voting. The hall of fame lists users based on their longevity, their peak hash rates and the number of blocks they’ve found.
#2 Antpool Is Your Next Best Choice
Antpool is a China-based mining pool run by Bitmain, a leading manufacturer of ASIC technology (they make the Antminer line), with a lot to offer new miners. While it is a bit less user-friendly than Slush Pool it supports mining of Bitcoin, Bitcoin Cash, Litecoin, Ethereum and five others so you have some choices. It is also bigger than Slush Pool so it can result in more regular earnings as well. Earnings are settled daily with quick payments to your wallet.
Antpool has three levels of account so you can easily manage your account or a sub-pool you form. The network has mining servers deployed worldwide so there is a high level of reliability, you won’t have to worry about your rig not working because of a network issue.
The best thing about Antpool is the rate at which it finds new blocks. The pool finds about 25% of all new blocks which means it can have a sizeable payday each and every day. The downside is that with a larger pool there are more miners to share with so each day’s payout per miner, based on their contributed hash rate, can be small.
Another plus is the fee at only 1.5% of earnings. This is much less than the 2% charged by Slush Pool but again, the platform isn’t as good. They do have a mobile app though so you can check on your earnings and hash rate wherever you are.
#3 The Biggest Mining Pool You Can Join
BTC.com is more than the largest bitcoin mining pool you can join. It is also the leading source of Bitcoin data and a leading provider of Bitcoin wallet technology. Because it is the largest pool it means a more stable, more regular earning potential but that comes with a caveat, the website is a little confusing. The focus is not on mining so you have to navigate through the site to find what you’re looking for (if you are a miner) and then when you find it, the information isn’t laid out as intuitively as it could be.
The network is based on an open sourced system that is maintained continually. If you are a programmer or just interested in seeing the code it is listed in full on Github. Github is a centralized location for maintaining open source code using Git, a framework for managing open source code revisions.
Service is available 24/7 and payments are made daily into your proprietary BTC.com Bitcoin wallet. The system also supports Bitcoin Cash mining but no others at this time. The network is global so you can choose to connect to the BTC.com servers located closest to you and be assured of reliable operation with very little downtime.
One area where BTC.com excels is with orphaned or stale blocks. Wasting time on orphaned or stale blocks costs the pool money so they have developed a high-speed broadcast network to ensure your rig, and all the rigs in the pool, are only working on new blocks. The code is also available on Github and can be downloaded.
#4 This Pool Takes Mining To Another Level
The F2 Pool is not the largest of the pools you can join but it is one of the best for multi-currency miners. They also boast one of the easiest set-up process advertised as simple as sign-up, choose the miner you are using, start mining and make profits. One of the draws of F2 Pool is the “Labs” section where they mine the latest, most speculative cryptocurrencies on the market.
The problem with F2 Pool is that, while the website is one of the best looking, it has the least amount of information and support. Along with this is one of the highest fees, 2.5%, which will eat into your profits. They also don’t support wallet technology so you will need to have a wallet capable of holding the coins you choose to mine. They specifically say on the website that F2 Pool is not a bank, balances left more than 90 days will be viewed as a donation to the pool, so don’t let your earnings linger too long.
Support at F2 Pool is very weak compared to the other major pools. The two main avenues for new miners is to submit a ticket through Zendesk or email them at [email protected]. If you are not comfortable setting up your rig, or think you may need more than a little bit of help this may not be the best pool for you.
How To Mine CryptoCurrency With A Home Computer
CPU VS GPU Cryptocurrency Mining
There are two basic types of cryptocurrency mining you can do on a home computer, CPU, and GPU. CPU mining uses the computer’s Central Processing Unit to perform the blockchain functions while GPU mining uses the graphics processing unit. The difference between the two is speed, the GPU unit can process hashes much faster than the CPU and is better suited to repetitive tasks like rehashing a proof of work algorithm.
In the early days of Bitcoin, most mining was done by CPU. The CPU is the mast control unit of the computer and thereby the highest functioning component in the machine, it was only natural to use it for mining. What miners came to realize is that the GPU, the graphics processing unit, was far better suited to perform the repetitive tasks required to mine cryptocurrency. This led to the development of ASICs (application specific mining chips) and mining rigs.
This does not mean computer-based cryptocurrency mining does not still exist because it does. There are several tokens that can be mined efficiently from standard equipment with little additional cost. The biggest expense, in this case, will be an upgraded video or graphics card for your PC, and the electricity it costs to operate it.
When choosing a cryptocurrency to mine from your desktop or home computer be sure to compare both types of mining for expected outcome and cost. It may be possible to upgrade your machine with a higher power GPU or ASIC chip for better performance.
Top Three GPU’s For Cryptocurrency Mining In 2018
#1) NVIDIA GeForce GTX 1070
The NVIDIA GeForce GTX 1070 is the leading graphics card upgrade for gamers and cryptocurrency miners today. It is a high hash/low power unit with a large amount of memory relative to other models. It can maintain about 30 mh/sec without drawing much more than a standard computer set-up which makes it one of the more efficient GPU’s on the market today. The catch is that it is on the high end of the price scale (about $1600) which may turn off some people. However, if you are into mining for the long-term this is the model for you.
#2) AMD Radeon RX580
The AMD Radeon RX580 is a more affordable option (about $350) with only a slight downgrade in performance from the GTX 1070. The unit is very popular among hobbyists and smaller mining operations and often times hard to find in new condition. Hashing power is comparable to the GTX 1070 at 29 MH/sec and comes with a highly rated cooling system.
#3) NVIDIA GeForce GTX 1060
The NVIDIA GeForce GTX 1060 is a slightly less powerful version of the GTX 1070 at a lower price point and still delivers great performance. Average cost is about $600 depending on the model you get but can go as high as $1400. The base model has only 3 GB of memory and a single fan while the high end comes with twice the memory and two fans.
The Top Four Cryptocurrencies You Can Mine With A Home Computer
Monero is a cryptocurrency designed to resist the development of ASIC hardware making it a top choice for desktop-based miners. The first step in mining Monero is to download a wallet to store your coins. There are many to choose from but we recommend the Exodus Wallet or the official Monero GUI Client for safe, offline storage of your coins. After that you need to download a mining software like Multiminer or GUIMiner. After that configure your miner, easy, and start mining. If you are concerned about keeping your Monero tokens (XMR) you can easily exchange them for Bitcoins, Litecoins or Ethereum using your Exodus Wallet.
Dogecoin started out as a joke but has grown to become one of the top 50 cryptocurrencies by market cap with a total market capitalization over $380 million. To mine the coin start by securing a wallet, the Exodus will also support Dogecoin, or choose the Dogecoin Core Wallet. You can use either the CPU (central processing unit) or GPU (graphics processing unit) on your computer to mine this token. The thing to keep in mind is that it will be a slow process (CPU and GPU mining) unless you have an upgraded graphics card for GPU mining. The best software for GPU mining is CGMiner or Cudaminer. It is also advisable to join a mining pool for best results.
Vertcoin is a digital cryptocurrency specially suited for small operations. It is based on a proof-of-work algorithm but also set up to resist development of ASICs and domination by large-scale mining operations. Built on the philosophy which spurred the cryptocurrency movement it is hailed as the “peoples coin” and comes with mining software designed by the team specifically for Vertcoin. The software can be downloaded for free from their website and set up in minutes. The caveat is that you will need to join a pool to take advantage of computing power and have an NVDIA or AMD graphics card to make it work.
Bytecoin is a decentralized blockchain based network allowing totally (yeah right) anonymous financial transactions across the globe. It can be mined solo from a home computer using either a CPU or GPU miner but solo mining is not recommended because it will take a long time to find the first block. The good news is that it is easy to set up and if (when) you do find the block you get the entire reward which can be substantial. To start all you have to do is download the Bytecoin Wallet and transaction Daemon, synch them to the network and then type in the command start_miningyourwalletaddress. Pool mining is almost as easy and the recommended method. After downloading and installing the mining software, they recommend xmrig, enter the port number of the pool you want to join and your wallet address into the config file and its ready to go.
The Best Cryptocurrency Mining Software You Can Get
Before moving forward with a choice of software you should check to make sure it is compatible with your rig or system and the mining pool you want to join.
CGMiner is by far the best mining software around but comes with one major drawback; it is difficult to install on Windows. The upshot is that is works with just about every type of cryptocurrency you can mine and it is highly customizable. It’s coded in C so it can be used with any operating system but Linux seems to work best and is easiest to set up. Primarily developed for use with hardware mining devices (mining rigs) it can also operate on any GPU or ASIC attached to your home computer. At installation, the system will ask for the information for your mining pool and wallets and then detect any devices or ASICs you have attached to the system.
A downfall to using it with Windows is that Windows Defender will try to block the download because hackers have attempted (and succeeded) in installing the software on other people’s computers and used them to mine. It’s an easy fix but leaves the computer vulnerable to attacks and may cause problems down the road should the firewall be turned on again. This problem is not reported with the Linux version.
Bitminter is a great Bitcoin mining application that can be used across platforms and devices. The only drawback is that it can only be used with the Bitminter mining pool. The good news is that Bitminter has been around since 2011 and is one of the leading pools for cryptocurrency mining.
The client has an incredibly easy to use interface that requires little advanced knowledge to use. A gauge on the left shows the hash rate in MH/s and the button in the middle starts the mining process with one click. The client will work with any GPU or external ASIC device with equal performance. To use you will need to create an account with Bitminter, their servers are located in the US and Europe and set up a wallet with them.
BFGMiner is a mining software developed specifically for ASICs devices. It is possible to use it with a GPU or graphics card but it is highly unlikely you will make money in this manner because they are just too slow. Because BFGMiner is narrowly focused on a single type of mining it allows for more features and adjustability for those looking for the hands-on experience. Along with the easy to use interface and vast array of options BFGMiner is compatible with Windows and all major versions of Linux.
Multiminer is a BFGMiner spin-off for those less than tech-savvy. This trimmed down version has the same easy to use interface with fewer options to confuse those who want to simply set up their rig and let it run worry-free. The best part of Multiminer is that it can connect multiple devices and connect to multiple mining pools allowing the use of complex mining strategies (switching from pool to pool, or coin to coin, as conditions dictate, pool-hopping) to maximize returns.
The system guides you through the entire set-up process. Multiminer will scan and detect all your connected devices, list them in an easy to use window and even project your expected daily profit based on your equipment, pool, and electric consumption. It is a cross-platform system but works best with Windows. You will need to download additional software to facilitate installation on Linux or macOS powered devices.
Easyminer is the graphical front-end for two popular mining apps, CGMiner and CPUMiner. The app provides an easy to use interface that surpasses the simple command line interface provided by CGminer and CPUMiner. The system easily tracks multiple mining pools and will support ASIC devices like Antiminer mining rigs to mine both Bitcoin and Litecoin.
The downside of this app is that hackers have installed it maliciously to mine cryptocurrency using other peoples hardware. This means that antivirus software like Avast will interfere with its operation or remove it from your computer so be careful.
BTCMiner is an open-sourced Bitcoin mining software designed to support multiple mining pools and to automatically connect to the one with the most valid hashes. It can also connect to FPGA boards (field programmable gate array, microchips that can be programmed in the field) that have functional USB connections. The real problem with BTC-miner is that there are a lot of copycat websites offering cloud mining under the same name and most of those are scams.
With Cloud Mining It’s Easy For You To Mine Bitcoin Now
I’m sure by now it has become clear that mining Bitcoin is not as easy as plugging a mining rig into the Internet and making money. To do it right, to make money and not lose it, you have to have specialized hardware, specific and sometimes complicated software, a mining pool you can trust, be able to keep your rigs running and hope it all works. There is another way, Cloud Mining.
Cloud mining is the shared use of remote equipment to mine cryptocurrency. The way it works is simple, a company sets up a server farm where they can operate and maintain mining rigs or other cloud-based hashing power. They, in turn, sell shares or rent the use of their rigs/hashing power through contracts that generate revenue for the business. Mined coins are then shared among the company’s contract holders in the form of profits. The upside is that individuals can invest in and benefit from cryptocurrency mining without all the hassle, the downside is that the return on investment is often much lower because there are costs for the business to overcome.
The number one draw of cloud mining is ease, the second is flexibility; many cloud mining operations support mining for multiple cryptocurrencies. When you buy into a cloud mining operation you are in effect joining a mining pool but on a limited basis, sort of like a gym membership. The difference is that instead of each member bring hashing power to the group there is a centralized location from which members rent existing hashing power. If you were to set up your own rig and mine with a pool you can make money as long as you are connected, if you join a cloud mining company you can make money as long as your contract terms allow.
There are some cons to be aware of when looking at cloud mining. The first is fraud. There is very little regulation in the cryptocurrency world and mining operations are the least regulated of all. It is entirely possible to find a cloud operation whose sole purpose is to scam the public. Another risk is opacity when you join a cloud pool you are at the mercy of the pools operators and may receive little to no information about the operational results, profitability and costs. Yet another risk is reliability. Most mining contracts come with warnings that mining will cease, or that the token mined will change, if and when mining Bitcoin or Ethereum or Litecoin is no longer profitable.
There are three basic types of cloud mining pools. The first is hosted mining. In this set-up, you are leasing a mining rig hosted and operated by a third party responsible for its upkeep and maintenance. In this case, you would get all the tokens mined by that rig, minus a fee and the initial cost. The second method of cloud mining is to set up a virtual private server, a sort of virtual computer system hosted on a cloud network, and install mining software on it. This is more complicated but more flexible, you can mine any type of currency you want with lower costs. The third is to lease hashing power and is by far the most popular method. In this set-up the cloud mining company has X amount of hashing power, you lease a portion of that power and receive profits prorated to your share of the total.
The Most Trusted Cloud Mining Operations
#1) Genesis Mining
Genesis mining is the oldest, best established and most popular cloud mining operation in use today. They support multiple tokens (types of cryptocurrencies) and the contracts are often sold out due to high demand. Their services, data centers and results are transparent and verifiable making it a great starting point for new cryptocurrency enthusiasts. Contracts are available for (theoretically) all types of cryptocurrencies with the exception of those who’ve switched to proof of stake or are no longer profitable. The best part of the system is the flexibility it offers. Users can visit their dashboard at any time and reallocate their hashing power to any currency available or split it between multiple currencies, ie 50% BTC 25% ETH and 25% LTC. The downside to Genesis is its fees, about $0.00028 per GH/sec for BTC, which are among the highest in the industry.
Hashnest is the cloud mining operation backed by Bitmain. Bitmain if you recall is a major manufacturer of ASIC hardware including the ever popular Antminer series, and the operator of one the largest mining pools on the planet, Antpool. Basically, Hashnest is a great cloud operation using top of the line miners operated by an industry leader. The downside is that, once again, its popularity means contracts are often sold out so you may not be able to buy one when you want to. The company offers two types of contracts, the Payout Accelerated Cloud Mining Contract (PACMiC) and leased hashing power from Antminer devices. The PACMiC aims to use contract revenue to pay hosting costs so that contract owners can reap the full reward of their investment but comes at a higher price.
Hashflare boasts one of the largest lists of mineable cryptocurrencies, the caveats are limited types of contracts and they have had some issues with BTC withdrawal in the past. The company rents hashing power for coins like BTC, LTC, ETH and ZCash and allows you to join the mining pool of your choice. Mining starts immediately after the contract payment is confirmed with payouts starting as early as the next day provided fees are met. Fees are low and fixed, and you are able to allocate your hashing power among the different pools to your liking.
Hashing24 is a cloud miner with a unique feature, it allows you to simulate earnings in real time before you commit to purchasing. The system has no data centers of its own but leases hashing power from big names in the industry like Bitfury in order to resell it to miners. The downside to this one is that it only supports BTC mining in two contracts; the lifetime plan and the 36 month plan. The lifetime plan allocates hashing power in blocks of 100 GH/sec for one set price. There is a fee to overcome but at this time is still well below the daily earning potential. Another feature of Hashing24 is the ability to auction contracts. This means you can sell contracts you own at a profit, or buy ones that are for sale from other members, useful at times when the main site is sold out.
How Profitable Is Cryptocurrency Mining?
To answer the question, how profitable is cryptocurrency mining, requires a lot of variables. Profitability starts with your machines efficiency, how much power it uses per hashing function, and ends with the price of Bitcoin. With Bitcoin trading near $7,500 it is nearly impossible for residents of most countries to turn a profit but that does not stop them from mining. The hope, in many cases, is for Bitcoin price to resume its rise until it returns to levels that make cryptocurrency mining more profitable.
Coinrate.com has a great tool on their website showing estimated profitability rates for mining Bitcoin around the world. It is based on the price of Bitcoin, the cost of producing one BTC, the time to mine a block, the difficulty level, and other pertinent data. Updated once every 60 seconds it can give you an idea whether mining Bitcoin is a good idea for you, or if you should consider another cryptocurrency, or maybe get into cloud mining. Of course, you can just skip all the hard work and invest in Bitcoin instead.