Bitcoin mining can be costly, depending on your budget and how much you want to earn from mining.
If you’ve been worried about how much a standard Bitcoin mining rig would cost you, we will answer your question in this detailed article.
There are countless ways to make money with computers, but right now there are few as exciting and potentially profitable as cryptocurrency mining.
The decentralization of money has fueled a digital gold rush as individuals, mining pools, and entire mining companies compete for the same blocks.
So how can you claim and mine your own fresh, minty cryptocurrency? It’s about building your team and balancing performance with efficiency.
Is mining crypto still profitable?
The profitability in crypto mining varies from coin to coin, based on the network, the complexity of challenges, and the multitude of other miners chasing that currency.
The first thing you need to understand is that cryptocurrency mining is a bit risky, just like running to California, buying a pickaxe, and riding your donkey through the hills.
Even the most obscure blockchains have thousands of miners vying to find the winning hash.
The bigger the competition, the harder the challenge, and if you don’t hit the block, a lot of time and energy is literally wasted.
The first decision you need to make is what currency you are actually mining.
This will affect every other decision you make and that in itself is a tricky question.
You need to consider the value of the coin and set the reward in terms of hash difficulty and the number of other miners chasing the prize.
The harder the race, the meaner your machine has to be.
You also need to consider the investment side of the equation.
Some of the mining can be done with the PC you already use, but in most cases, taking mining seriously means you want to invest in a system that’s purpose-built for the purpose.
This means spending real money and it can range from hundreds to tens of thousands of dollars depending on what currency you’re looking for and how competitive you want to be.
Of course, this is just an initial investment. The daily cost, the additional loss, is electricity.
Throwing hashes at trillions per second makes a rig very hungry, and even moderate mining can have a noticeable impact on your electricity bill.
So not only do you need to know how your appliances work, but you also need to balance your profits with your rising electric bills.
If you haven’t yet decided on the cryptocurrency you want, or don’t have it at all, we recommend consulting a mining calculator.
WhatToMine.com looks a little intimidating at first, but that’s only because it’s so incredibly comprehensive.
It can help you determine which coins to start mining and which coins are best for your platform by calculating their hash rate and power consumption. You can even take into account the price of electricity in your area.
It’s important to remember that there are other ways to make money besides mining gold.
When everyone goes to the hills to dig, you can make a lot of money selling shovels.
Of course, we’re not encouraging you to start making blades (it’s a saturated market), no, we’re saying there are ways to build a facility and sell or rent your power hash to someone else.
By removing some of the risks from the equation while lowering the reward.
What will you need?
The list is really short. You need the following:
- Crypto wallet to store your currency
- A mining software, and
- Hash rate power
Let’s start with the software because that’s probably the least stressful decision you’ll ever have to make.
Almost all of them are free and they all do versions of the same thing, but there are still things to consider.
The coin you mine is the most important because you need software that can mine that coin.
Some programs also offer features and customizations that are not available everywhere. Start with currency compatibility and make your decisions from there.
Why do you need a wallet?
You need a wallet to mine BTC because you can’t put Bitcoin on an old mattress or in your coat pocket.
If you want to keep your coin keys safe, you need some form of storage.
There are basically two types of storage to choose from, and while one is definitely more secure than the other, neither is perfect.
Cold storage refers to the actual physical storage devices. They are called cold storage because they exist offline and cannot be accessed remotely.
This means nobody can hack and steal your Litecoin. They also have their own password protection, making them doubly secure.
With that in mind, you need to consider the compatibility between your wallet and your currency.
Storing physical data also opens up the possibility of corruption, and unlike traditional money, corruption of digital currencies typically leads to less wealth.
Most crypto wallets don’t look like much more than a flash drive, making them easy to take with you wherever you go.
Small and easy to carry wallets like the Ledger Nano S or BC Vault One are great, but it also means you can lose your money the old-fashioned way.
Imagine a USB stick falling out of your pocket in an Uber, but instead of just losing the digital copy of Alita: Battle Angel you never leave home without, you lose several thousand dollars in cryptocurrency. What is the greatest tragedy? Who can tell?
Hot storage, on the other hand, is entirely digital, which makes it less secure in general, but also much more convenient to trade or swap.
Software like Coindirect or apps like Trust take security very seriously, and if you move small amounts of money with any frequency, the freedom and flexibility these digital options offer could be the right choice for you.
Just remember to research the transaction fees associated with each wallet and verify that it works with the currency you are mining.
Miners have to solve the hash puzzle by finding the hash under a specific objective through the difficulty requirement.
The goal stored in the header is expressed as a 67-digit number that determines the mining difficulty based on the number of miners competing to solve a hash function.
Importantly, this difficulty is adjusted after the creation of each 2016 block based on how long it took the miners of the previous 2016 blocks to solve an equation.
This also keeps the speed at which transactions are added to the blockchain to 10 minutes.
To solve the hash puzzle, miners attempt to hash a block by repeatedly adding a nonce to the block header until the resulting hash falls below the target.
Once a mining computer solves the puzzle, a new block is successfully created and validated on the Bitcoin network after reaching a consensus between nodes.
When a block is validated, the transactions grouped within it are verified and the block is added to the chain. As mentioned above, this happens every 10 minutes.
Since there will be many miners (systems) competing to solve the puzzle, the first miner to get the correct hash value wins a bitcoin reward.
This process allows more bitcoins to be circulated.
What then is hash rate power all about?
Hash rate is a measure of the total computing power used by a proof-of-work cryptocurrency network to process transactions on a blockchain.
It can also be a measure of how quickly a cryptocurrency miner’s machines perform these calculations.
Miners use computers to perform calculations on complex mathematical puzzles based on transaction data.
These systems generate millions or billions of guesses per second about what the solutions to these puzzles might be.
These are hashes, alphanumeric codes that are randomized to identify a single, unique piece of data.
What goes into a crypto mining rig and how much do they cost?
There are three basic categories for mining equipment, CPU processor, GPU and ASIC (Application Specific Integrated Circuit).
As with anything else, the most important factor in choosing the right platform is the coin you want to mine.
Once upon a time, you could mine bitcoin with just the CPU on your desk and a wink.
Now very few coins can be mined effectively with so little computing power and if you want to specifically mine Bitcoin you need an impressive machine designed for the purpose.
Price range: $739 – $10,999
CPU mining is a bit like what it sounds like. They use the processing power of your CPU to generate hashes.
That was all very well a few years ago, but as cryptocurrency mining has become more popular, so has the competition, and there’s nothing that drives technological advancement more than the competition.
Your CPU just isn’t powerful enough to compute a specific ASIC or compete with a mining rig with six high-end GPUs.
However, there are coins out there that try to protect the average miner from being utterly outclassed by those who can afford bigger toys. Monero is one such currency.
They design themselves to be “ASIC-resistant” to keep their cryptocurrency as decentralized and equal as possible.
Obviously, if you want to dive into data mining, a high-end CPU like the AMD Ryzen Threadripper 3990X which costs around $8,500 on Amazon is the gold standard.
Its sixty-four cores and 128 threads do a lot of work, but it’s the massive 256MB L3 cache that really allows it to increase the hash rate.
It can generate 64MH, which isn’t much compared to other devices we’ll discuss in a moment, but mining the right coin is more than enough to keep up.
Of course, the benefit of CPU mining is that even if the mining doesn’t work, it’s still a worthwhile investment for your PC.
Another disadvantage of CPU processing, in addition to hash-per-second limitations, is the risk of overheating.
Running so many complex calculations can generate dangerous amounts of heat, so you want to make sure you have a cooling system that can handle the stress.
The MSI MAG Series CORELIQUID 360R which costs anywhere from $120 is specially designed to keep the Threadripper running without excessive heat and still has a nice RGB style.
If you want something less flashy, the $100 Noctua NH-D15 is an affordable option that still offers features like PWM and up to 82.52 Cubic feet per minute (CFM) of airflow.
Price range: $2,999 – $30,000
GPU mining is a bit more complicated but much more common. It is very difficult to get multiple processors to work together to achieve a common goal.
It’s much easier to plug multiple powerful GPUs into one motherboard and get them working. Choosing the right GPU can be tricky at best, but it’s an exciting part of the quest and there’s no magic bullet.
Nvidia and AMD are of course the two main competitors and each has attractive options for both the experienced hash cracker and the smallest miner.
The $3000 MSI GeForce RTX 3090 is a solid performance option, but definitely a heavier and harder-to-find investment. It is capable of generating hash rates of around 110MH depending on the algorithm you run it on.
You can also succeed with the $1,200 XFX Radeon VII, which is not as powerful but runs more efficiently.
Keep in mind that these statistics are only half the problem and the price of electricity in your area can greatly affect the balance of this cost-benefit equation. Again, be sure to do your due diligence.
Price range: $200 – $3,000
But a GPU needs to be connected to something, and a single GPU isn’t going to deliver the hashing performance needed to compete.
You need a motherboard for this platform and the more GPUs you can fit the better. You want a motherboard that can connect at least six GPUs.
The $300 MSI PRO Z390-A can handle this at a respectable price. If you’re really looking for thrills, check out the ASUS B250 Mining Expert, which can connect up to nineteen GPUs for some serious blocking performance.
Price range: $500 – $2,000
Of course, not all of these GPUs will fit in a typical PC case, and you can’t just leave them lying around.
You need a framework for your platform. There are many plans out there for building your own mining structure, but if you’d rather invest in one you can trust, check out our inventory.
We have simple inexpensive options like the $800 ASTARIN 6 GPU Mining Case, but of course, you can always spend more.
If you’re looking for something that can hold more GPUs and look a little cleaner, check out the $50 Magnalium alloy mining case that can hold up to twelve graphics cards.
Remember that your frame should have at least as many slots as there are GPUs in your rig, and you need to make sure it fits where you plan to store it in your house.
Price range: $200 – $2,999
You have to power all those GPUs, not to mention the CPU and motherboard. If you’ve ever built a PC from scratch, you’re already familiar with calculating a platform’s power consumption.
It’s not really different, it just uses a lot more power-hungry components for this type of machine.
Remember that not only is it important to provide enough power to all components, but your power consumption is an important part of your bottom line.
That’s why finding the right power supply is so important. Consider the $450 EVGA Supernova 1600 T2, which is fully modular and has an 80+ Titanium efficiency rating.
Or you can save some money with $200 Thermaltake Toughpower 1500W.
It’s only 80+ Gold certified and semi-modular, but it can move a lot of juice for a much more manageable upfront cost. Be sure to invest in an 80 Plus Gold certified power supply or higher.
Price range: $6,000 – $20,000
We’ve saved the most powerful option for last. ASIC is short for Application-Specific Integrated Circuit and it basically describes a small but powerful computing machine built for a specific purpose, in this case, cryptocurrency mining.
They are incredibly powerful and lead the pack in their ability to create hashes.
They are also extremely expensive, are quickly being outstripped by newer designs, and are somewhat controversial in their capabilities.
These workhorses are so powerful that they can really change the landscape of the cryptocurrencies they mine.
They can cut most homemade rigs and are so expensive that the average miner can afford them. And even if a miner feels like investing several thousand dollars in a flimsy hash machine, big companies and deep pockets can amass banks large enough to decimate their chances of winning a block.
This is just the beginning. These big ASIC banks also ultimately contradict the same principles that helped make cryptocurrencies like Bitcoin so attractive in the first place.
By seizing a disproportionate number of blocks, these banks somewhat undermine the concept of decentralized currency.
Because of this, some cryptocurrencies are fighting against the tide, trying to be the so-called ASIC resistance.
Monero is specifically trying to limit the amount of ASIC mining that goes into its blockchain. This means less intense competition, meaning search engines can be competitive with a much smaller initial investment. However, no mining algorithm is completely ASIC-safe, so they will always play a role.
If you are looking for big shots mining Ethereum or Bitcoin, check out these devices. They come at a high price, but they can reap great rewards, and as technology pushes the brink of physical limitations, the concern that these high-investment machines will quickly become obsolete is becoming less daunting by the day.
When looking for droids, the last step is to make sure again that the device you want to buy is capable of mining the currency you want.
ASICs are so specialized that they are specific to different types of hashing algorithms.
An ASIC designed to mine Bitcoin’s SHA-256 algorithm can be modified to mine peercoin since they use the same algorithm.
However, you cannot use the same machine to mine Dash as this cryptocurrency uses the X11 algorithm.
If you’re mining the right coin and have the resources to do so, an ASIC is almost certainly the way to go.
If you are looking for Bitcoin, check out the WhatsMiner ASIC, which has an amazing 33rd hash rate.
Remember that these devices also require a power supply, so factor this into your investment calculation.
Of course, there are always options and it is up to you to do your research and find what works best for the trade you are trying to make.
What are the best coins to start mining?
Here is a shortlist of cryptocurrencies worth checking out if you are looking to start your own mining operation. All of the following are viable ASIC-resistant options for the novice miner.
- Raven Coin (RVN)
- Ethereum Classic (ETC)
- Monero (XMR)
- Bitcoin Gold (BTG)
- Vertcoin (VTC)
- Shelter Protocol (XHV)
Raven Coin (RVN)
RavenCoin is on the list because it is simple, committed to decentralization, and profitable to operate. RavenCoin is based on a Bitcoin fork but is ASIC resistant.
This makes it a good choice for novice miners as it has a low upfront investment and a long-standing, reliable blockchain.
Mining software: BMiner, NBMiner, DamoMiner
Groups: 2Miners, Blocksmith, Bsod, Coinotron, Flypool, HeroMiners, Skypool, MiningPoolHub, Nanopool, Suprnova, WoolyPooly
Algorithm: KawPoW (proof of work)
Hardware: GPU, CPU
Ethereum Classic (ETC)
This ASIC-resistant cryptocurrency is primarily characterized by its “code is law” principle, which states that companies should be able to operate on the blockchain with minimal human intervention. This makes it a popular choice for dApps (decentralized applications) and smart contracts, meaning many offerings are built into the currency itself.
Mining Software: Ethminer, Claymore Miner, FinMiner, GMiner, NBMiner, Cruxminer, GMiner, lolMiner, Nanomer, NBMiner
Groups: Nanopool.org, 2Miners, Ethermine, f2pool, P2pool
Algorithm: Etchash (proof of work)
Monero is not just another ASIC-resistant cryptocurrency. It’s one of the few coins that can still be mined with a CPU, which also makes it one of the most efficient options out there.
Monero also has the appeal of being much more private than many other cryptocurrencies, as it keeps the transfer amount and the sending and receiving addresses private.
Mining Software: XMR Stak, MinerGate, Monero Spelunker, CC Miner
Groups: MineXMR.com, SupportXMR.com, xmr.nanopool.org, monero.crypto-pool.fr
Algorithm: RandomX (proof of work)
Hardware: GPU, CPU
Bitcoin Gold (BTG)
This Bitcoin fork is designed to be ASIC resistant to focus on the idea of decentralization, although, unlike previous coins, BTG cannot be mined with a CPU.
This concentration has the added benefit of helping to scale the blockchain, which only adds to the currency’s already prestigious credibility and stability.
Mining software: GMiner, CUDA miner, EWBF miner Cuda Equihash
Groups: ccgmining.com, hashflare.io, minergate.com, nicehash.com
Algorithm: Equihash-BTG (proof of work)
Hardware: graphics card
There isn’t much to say about Vertcoin that hasn’t already been said in previous mentions. It is a Bitcoin-based ASIC-resistant cryptocurrency trying to maintain its decentralized nature.
It makes this list mainly because it is an easy entry-level cryptocurrency that miners trust.
Mining Software: Verthash Miner, Spminer, SRBminer, Team Red Miner
Pools: Coinotron.com, Zpool.ca, miningpoolhub.com, Bitpoolmining.com
Algorithm: (proof of work)
Shelter Protocol (XHV)
Finally, the Haven protocol is a Monero based encryption that offers the same privacy benefits plus the added benefit of being easily portable without third-party intervention. You can convert mined XHV directly into US Dollar, Chinese Yen or even Gold based stable coins.
Mining Software: XMR Stak, MinerGate, Monero Spelunker, CC Miner BLOC GUI Miner, CryptoDredge, SRBMinerR
Groups: Hero Miners, Miner Rocks, Fracking Miner, Hashvault, FairPool, Hashpool
Algorithm: RandomX (proof of work)
Hardware: GPU, CPU
Mining is inherently risky as there are many more ways to spend money than there are ways to do it, but with the right amount of planning and research, money can be made.
And just like the gold rush that got people running across the California hills, cryptocurrency mining wouldn’t be as exciting if it were easy.
Great read, enlightening, many thanks.
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