How To Become a Miner - Explained

There are currently 3 major categories of bitcoin hardware for mining, each expensive and stronger than the previous one. This guide explains each of them and how they work. To understand this section, it's important to know the guide ahead of it, mining.

In order to bring theory into practice, it is necessary to explain why everything is actually turning. Of course, hardware is needed, but which hardware to choose? When choosing, it's important to observe two things: the hash speed and energy consumption.

In this article, we will look more closely at the "concepts" of mining and take bitcoins as an example, but bitcoin is not the only cryptocurrency that is mining today. Litecoin, Ethereum, Monero and many others can also be mined, and the whole list can be found here.

Hashrate

The hashrate is the number of operations your hardware can do every second when trying to break the math problem. The rate is measured in: megahash, gigahash, and terahash per second (MH / s, GH / s, TH / s). The higher the louse rate (compared to the average rate), the greater the chances of solving the transaction block. The Wiki page where comparisons are made is a great place to look at the hardware difference. -> Wiki Hardware Comparison

Energy consumption

All computing power consumes energy, of course it costs. It is very important to check the wattage consumption when you make the selection. You want to make sure that you will take hardware that will not spend more energy than you will earn by mining.

Consider both factors kakbitcoin-mining-usb-block-erupter-power-consuming-while-using-anker-9-port-usb hub to calculate how many hashes you can produce per watt. To get it, divide the hash with the wad.

For example, if you have a 600 GH / s device that consumes 400 watts of energy, then you get 1.5 GH / s per watt. You can check how much this will cost you by checking your current account or online calculator.

Of course, in some cases you will also use your computer to run mining hardware. Then it is important to count on the power consumption of the computer.

Bitcoin hardware for mining

There are three main hardware categories for mining: GPU, FPGA, and ASIC.

CPU / GPU Bitcoin mining

The worst category of these three computers is only. Theoretically, you can use the CPU of your computer to mine bitcoins, but in practice it is very slow in today's market makes no sense.

You can enhance the GPU miningStop of the hash by adding graphic hardware to your computer. Graphics cards contain GPUs. They are designed for difficult math problems to count complex polygons in the latest computer games. This makes them particularly good in solving the bitcoin algorithm, ie solving the transaction block.

The biggest GPU dealers are ATI and Nvidia. However, high-end graphics cards cost a around or over thosand $, but give a significant advantage over CPU cache. For example, the ATI 5970 graphics card will give you 800MH / s compared to the average CPU that will get you around 10MH / s.

One of the great advantages of the GPU is leaving you open options. Unlike the hardware, which we will talk below in the article, the GPU can be used to mining other cryptocurrencies than bitcoins. For example, Litecoin uses a different algorithm that is designed to be "friendly" to CPU and GPU miners, and thus enables miners to switch to that currency.

These days GPU mining is used mainly on other crypocurrencies. The bitcoin mining weight has been so advanced since the ASIC hardware has come to market, so GPUs can not compete. If you want to use them, be prepared to allocate large amounts of money, as you will need a motherboard that can trigger multiple graphics units over the same power supply.

FPGA Bitcoin Mining

Field Programmable Gate Array (FPGA) is an integrated circuit that is configured after it is built. This allows mining hardware manufacturers to buy chips and fix the equipment themselves. Because the hardware is configured for mining, it often gives better results than the CPU and GPU. It can be seen that one FPGA chip works at 750MH / s, although it is high-end. Of course, it is possible to put more chips on one hardware.

ASIC Bitcoin Mining

This is the area where the action actually takes place. ASIC (Application Specific Integrated Circuits) is specifically designed to do just one thing: bitcoin miners at astonishing speed with relatively low power consumption. Since these chips have to be specifically designed for this task, they are extremely expensive and time-consuming to produce - but conquer at speed. At the time of writing the article, some units were sold at speeds of between 5-500GH / s (although it is very difficult to buy). Traders already promise ASIC devices with even more power, which extends up to 2TH / s. Some of them are: Avalon, Buterfly Labs, and the famous Bitmain.

The third largest in the market is 14 TH / s. So, in 4 years, the power has more than doubled with new technology.

Cloud mining (cloudhashing)

For beginner miners (whether in bitcoin or some other cryptcurrencies), a major investment in hardware and equipment devoted and optimized for mining (ASIC / Scrypt) is needed first. The reason why you need bigger investments is that the network's "weight" is growing and you need more integrated ASICs, but also because of the shipment and industry growth where printers are building stronger and better hardware with a relatively increasing price. One of the trends that appears in the Bitcoin industry is cloud mining. As the name itself tells you, mining is on your side in "cloud", meaning that the provider of this service cares for all the processes required for mining - from hardware, power, maintenance, programs, and mining to mines pool). This approach gives the user who wants to dig in the network a finished product and this is the rate of hash rate you buy in a batch and you are doing the mining process. So all you have is GH / s (Giga hashes / seconds) or TH / s depending on which package you buy and at which bidders.

Many people have asked us, "Why would these companies sell the mining power of their equipment if they could use it for their benefit and directly mining?" Well, let's just make the question here. The reason is very simple, and it's called risk diversification. Namely, such companies that went in this direction had to invest large investments first to set up their mining centers. The return on investment through mining would only be paid after a period of several years. So there are costs for electricity, cooling, maintenance, workforce and support. Risk management also counts the risks of power failure, repairs, unexpected failures, and even in case of elemental disasters. There is still the highest risk, which is the unpredictability of bitcoins and the possibility of falling prices that could, in certain situations, make the complete mining operation negative in the sense that costs are higher than profits. Of course, one part of this equipment will be directly targeted at mining for that same company, but to reduce that risk most of the equipment or lithouse rate is sold immediately at a certain price to users who then "rent" or permanently buy the hashing power.

One of the most famous of these companies is CEX.io which offers its users the purchase of GH / s for bitcoin at the current market price traded by other users. For beginners this is one of the easiest solutions where you can buy 1 GH / S for a few dollars (in bitcoin equivalent) depending on the current market situation.

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