In a nutshell, ‘Mining’ CryptoCurrency is basically verifying transactions on the network or blockchain. This happens to ensure the system remains safe, secure and reliable. The Miners are basically computers that solve a problem to verify that the correct data (or Transaction) has been sent between peers.
There are two ways to get CryptoCurrency. One is to ‘Mine’ it. (Using some Mining Hardware) and the other is to purchase it directly. (Using an exchange.) When looking to mine Crypto there are a few variables to take into account. The first is the Crypto Type that you want to mine. Bitcoin, for example, uses an SHA-256 algorithm and is best mined with ASIC based miners (We will go into ASIC chips later!) Whereas the Coin ‘Ethereum’ uses Ethash which is a modified version of SHA and some other protocols to make it ASIC-resistant and easier to verify transactions. In other words, you can use your computer Graphics card to mine this coin.
The ASIC miners for Bitcoin and GPU miners for Ethereum are only just the tip of the iceberg, new technologies are coming out all the time which will change how you mine crypto and which hardware you select. Below if a few comparisons to help you make up your mind if ‘mining’ crypto is for you.
Things to consider when purchasing a miner
- What Crypto am I going to Mine? (Bitcoin, Ethereum, Litecoin)
- What type of hardware do I require to mine the said coin?
- Is there a calculator to determine my earnings?
- How much maintenance does a miner require?
- Do I need an internet connection?
- Where shall I store the hardware?
- How much heat will my hardware produce?
- How noisy is the hardware?
- How much power will my mining rig use?
Where to Start
First, you need to determine the Crypto coin you want to mine. Check and make sure it is ‘mineable’ also. Not all Crypto can be mined. For example, NEO (Chinese Crypto) it is not able to be mined but has other benefits that are outside the scope of this post. (Google it, very interesting read!) In my case, the first miner I purchased was an ASIC based miner suitable for Bitcoin (SHA-256 capable). I decided upon this because Bitcoin is the most well known of the cryptocurrencies and I felt at the time that no matter the initial investment amount on the hardware, the price of Bitcoin will still go up relatively quickly.
We should really hit on the power consumption debate firstly as this is easily the most debated topic when mining crypto. Most of the hardware requires a fair bit of power to run. The key is to figure out how much you are paying for power and to weigh this up with the rewards you get from mining your crypto. In some cases (Especially in Australia!) the price of power may not allow you to make mining profitable.
Easily the best Crypto Profitability calculator going around is this one. It will allow you to incorporate your power consumption to give you a more accurate understanding of the potential returns you could make.
Noise and Heat
As with all computer hardware, they generally produce a fair bit of Noise and Heat. Any device that is using upwards of 1000W of power is going to produce heat. A byproduct of this is the use of fans to cool the hardware, which in turn produces noise. Taking this into account you will need to store your mining rig in a suitable location so that you do not overheat the device, and that the constant drone of the fans are not annoying. Check out the video below. This is an Ebit E9, the first miner that I purchased. Noisy AF!
Where to buy?
Generally purchasing directly from the manufacturer is always a good idea. My first stop would be to check the Bitmain website to see what is available. They have some of the best ASIC and Litecoin miners going. At present, you can’t really beat the Antminer S9 if you want o mine Bitcoin. They sell all the equipment in batches. Thus you may find them to be out-of-stock on a regular basis. Keep checking in periodically to get a good deal.
As with all tech, at the time of this post, the prices listed for the gear were pretty competitive. Once this post is 3-4 months old, you will see that another tech has come out which is better spec and a better price.