What beginner should know about mining: advice from Blockchain & Bitcoin Conference Belarus expert
People don’t compare cryptocurrency miners to gold diggers for nothing. Miners know that there is no easy money. And those who are ready to sacrifice time, money and work hard will get the long-expected profit.
However, the success of mining depends not only on the miner’s obstinacy, but also on the equipment quality. This article will tell about different types of mining hardware and useful tips for beginners.
What is mining and how does it work?
Mining is the process of extracting cryptocurrency. A few years ago, cryptocurrencies could be mined on regular computers, but when the popularity of cryptocurrency increased, regular processors stopped coping with the task. The thing is that the more users are engaged in the production, the more difficult this task is.
In order to withstand competition, miners had to buy more powerful equipment, combining it into mining farms. Mining farm is a complex of computing devices – a cascade of units connected to one or several computers.
Depending on the type of equipment, farms for mining are divided into three types:
- GPU mining;
- CPU mining;
- ASIC mining.
Mining with video cards is a traditional method of cryptocurrency mining. In this case, GPU (or several of them) is connected to one motherboard. Experienced miners advise to take at least 4 graphics cards with good memory for profitable mining.
Graphics cards were popular equipment for the production of cryptocurrency until 2016, and then ASICs appeared. Today, GPU mining is inferior to ASIC one in efficiency and power consumption. However, some currencies are still mined on video cards, for example Ethereum. It should be taken into account that for the ETC mining, you need at least 4 GB GPU.
Over time, the complexity of mining increased, and miners began to look for more powerful equipment.
In 2012, the Chinese company Butterfly Labs released the first chips, designed specifically for Bitcoin mining. These were ASICs.
Today, ASIC is the most popular equipment for mining. It has the most powerful specifics and the lowest energy consumption level.
In this case, the main work is performed by processors. Like GPUs, they are connected to a motherboard. Now, almost nobody uses processors for mining: they produce few hash rates, but consume more power compared to GPUs or ASICs.
Nevertheless, there are cryptocurrencies, algorithm of which is designed for mining on CPUs, and not on GPUs or ASICs, for example, Monero.
What beginners should know about mining: advice of Alexander Petrakovsky
It is difficult to find information on the Internet on how to mine cryptocurrencies properly. In this regard, newcomers are concerned: is it necessary to have specific knowledge to start mining? Where is the best place to buy equipment? What risks are expected and how to avoid them?
Exclusively for Blockchain & Bitcoin Conference Belarus, these questions were answered by the CEO at Bittech.vc, Alexander Petrakovsky.
The expert believes that to start mining basic knowledge is enough, and it is necessary to master skills gradually.
“To start mining on your own, it is enough to have basic skills of the system administration and a computer with a powerful gaming GPU. If you deal with it on a professional or industrial level, you will immediately face specific questions about ventilation, cooling and energy consumption. Advanced skills in network administration, network design and monitoring are also required in this case,” says Alexander.
Alexander didn’t give preference to GPUs or ASICs. The expert advises miners to take into account their personal needs when choosing between these two types of hardware. He prefers ASICs.
“Video cards are universal devices and are suitable for a large number of algorithms, while ASICs are highly specialized chips created for hashing in a certain encryption algorithm. I prefer ASICs. For those algorithms where ASICs work, there is no need of using GPUs, since ASICs are more energy efficient.
Almost all top currencies (Bitcoin, Litecoin, Dash, Zcash, Ethereum) are already mined with ASICs, so GPUs are used mainly for exotic coins. I would also note that thanks to the directional cooling flow and a standard form factor, it is much easier to service ASICs on the industrial level, because it is very easy to separate the cold and hot airflow. At the same time, graphics cards “blow” in all directions, which greatly complicates their cooling”.
The expert says: in order not to buy trash instead of good hardware, it is necessary to be guided by simple life rules.
“Beginners shouldn’t chase cheapness and buy pre-owned equipment without a guarantee and if they cannot adequately assess its condition. Don’t put all the eggs in one basket, you need to try to diversify risks and, therefore, buy equipment for different algorithms. In case of large investments, in any case, you’ll need to contact a service company. Therefore, the best option for beginners is to hire consultants before buying the equipment”.
According to Alexander, the only way to avoid risks on the cryptocurrency market is to improve your skills constantly.
“Beginners face many problems and associated risks: choosing the equipment, place to buy it, its servicing, etc. To avoid them learn more about the field, study the problems and choose a reliable partner. I have already said that we recommend diversifying risks and mining on different algorithms. In my opinion, the most conservative mining is carried out on the SHA-256 algorithm, it is used for Bitcoin and Bitcoin Cash. The riskiest method of mining cryptocurrencies is to choose the newest ASICs for altcoins, like antminer Z9”.
Alexander Petrakovsky is speaker of Blockchain & Bitcoin Conference Belarus. During his report ‘Graphics cards or ASICs? Review of specific case studies’, he will explain how to choose proper equipment to increase profits, calculate and predict its profitability, as well as talk about modern ways of maintaining computer facilities.
To listen to Alexander and other experts come to Blockchain & Bitcoin Conference Belarus, which will be held on October 10, 2018 in Minsk.