We at Finrazor have prepared a beginner's guide for choosing mining hardware.
Feel free to leave your feedback, suggestions, further questions, or corrections down in the replies.
Mining is not the easiest way of making money in crypto. If you are not a tech-minded person and do not have the time and effort to become one, you better off hodling or day-trading. You can also find an appropriate application for your professional skills, such as web design, community management, social media marketing, translation, and many others that the crypto space may demand. However, if you see yourself as a miner, especially the one who makes their living off of it, you have to have all the know-hows of mining, particularly hardware management.
FACTORS
When choosing your hardware, you must keep in mind two criteria: hashrate and energy consumption. Your hashrate directly affects your earnings: the larger a portion of a pool’s hashrate you provide, the more you earn. However, with great hashrate comes great energy consumption. So you must make sure that you are making more than you are paying for electricity. There is a lot of mining profitability calculators available online. However, they do not account for two important factors:
Growing difficulty of mining. As the network grows, your hardware becomes less and less efficient, because mining is designed to become progressively harder in order to maintain the same block time.
Price appreciation of a cryptocurrency. Mining a certain coin may not bring as much money to cover your bills now. But if you are confident in the project’s success, their coin may go up in price in future, and you will have your eventual returns.
HARDWARE CHOICES
There are three types of hardware you can choose from to get into mining:
- GPU
- FPGA
- ASIC
GPU mining
Graphics Processing Units, or graphics cards, are used by your computer to process all the polygons in your games. This is done by making thousands of calculations per second, which is coincidentally the same what mining requires your computer to do. GPU mining is, arguably, the most common and reliable way of mining altcoins, such as Ethereum and other ASIC-resistant cryptocurrencies. With GPUs, you can always switch to a more profitable coin to mine. This grants you that flexibility other mining hardware cannot.
GPU mining is also an optimal choice for beginners and those who want only to try mining out. A GPU-powered mining rig is not as much a commitment as an ASIC miner. If you decided that mining is not for you, you can sell your graphics cards to return a significant portion of the money you have spent on them. Your GPUs will not make you wait for too long to find themselves a new owner. GPUs are and always have been in great demand.
Two biggest GPU manufacturers are ATI (AMD) and Nvidia. ATI graphics cards are much more powerful with their high-end models offering up to 2.5 GH/s, while the Nvidia’s biggest Tesla S2070 — around 750 MH/s. For more information about specific hardware, click here.
Setting up a GPU mining rig can be a tricky job. You will have to pay close attention to choosing the accompanying hardware. If you are going big and aiming for a complete eight-GPU mining rig, you must get yourself an eight-slot motherboard, which, in turn, must be compatible with your CPU. Another issues you may come across are drivers and other necessary software to support your rig. Fortunately, there is a ton of help online, and half an hour of googling should do it.
FPGA mining
A Field Programmable Gate Array is a piece of hardware that can be configured to do a certain task. Mining companies buy these chips and program them to do mining and put them into their own equipment. Though FPGA mining is not very popular, it has its own upsides. FPGAs are more moderate in terms of energy consumption than GPUs. They offer about 750 MH/s, which is on-par with GPU mining standards. FPGAs are half-way between GPUs and ASICs: they do not consume as much energy as GPUs and, at the same time, they do not offer as high a hashrate as ASICs.
ASIC mining
Bitcoin is largely an ASIC-mined cryptocurrency. An Application-Specific Integrated Circuit is designed to find solutions for a specific hashing algorithm, for example, Bitcoin’s double SHA-256. If you want to join the bitcoin miners, you have to have an ASIC miner. Otherwise, you will see little to no return whatsoever.
ASICs are the superior hardware when it comes to mining, as they offer up to 20 TH/s (e.g. Yesminer M20) and consume much less energy than GPUs. An ASIC mining rig is far easier to set up compared to a GPU-powered one. Most ASIC companies deliver pre-configured hardware with all the software already installed. Some of them come with a ready-made wallet. All you are going to have to do is to plug power and Ethernet cables. Go here, if want to learn about a specific ASIC.
Though ASICs may seem like a go-to option in mining, it is far from being true. If you can get hold of a new high-end ASIC from the first batch, it may pay for itself in a matter of weeks. However, you will not be the only one with the new ASIC. As more miners acquire their new ASICS, the total hashrate will see a significant spike, and the mining difficulty will increase. This makes it so that ASICs are becoming rapidly obsolete. The most powerful ASIC right now may not remain so in just three months. This is a very important point you should consider because ASICs can cost up to $10k and they have a terrible resale value. Do an extensive research and consider mining hardware as an investment, and investing more than you can afford to lose is never a good idea.
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Thanks for your interest, and have a good day!