Mining in 2021: how to start and is it worth it?
Against the background of the rise in the value of BTC, mining is becoming popular again. At the moment, this coin is worth almost $ 55,000.
Other cryptocurrencies are also on the rise. For example, ETH is worth almost $1,700 (according to Coindesk data as of March 27th, 2021).
Yes, cryptocurrency prices are rising, and this attracts new miners to the field. But how exactly do you start mining? What is needed for this? And is it even worth doing this in 2021? The answers to the questions are in this article.
Mining theory: necessary terms
If you don't know anything about mining yet (besides the fact that BTC is very expensive), it will be useful for you to familiarise yourself with the basic terms:
- A GPU rig (sometimes just a rig) is a mining device that combines several video cards.
- ASIC (Application-Specific Integrated Circuit) - a device for mining on a specific algorithm. ASICs can be used exclusively for mining cryptocurrencies.
- Worker - this term can refer to both GPU rigs and ASICs, this is the general name for mining devices.
- Hashrate - computing power of devices, mining speed.
- Miner - a person involved in mining, or a “method” of solving an algorithm (for example, Phoenix Miner).
- Algorithm - a way to encrypt a cryptocurrency (for example, ETHASH).
- A pool is a group of miners who mine cryptocurrency together. Pool mining is often more profitable than mining alone.
- Shara (from the English word share) - the contribution of the miner to the general work of detecting the block.
- Cloud mining - mining on devices rented on the network. Convenient in that you do not have to buy equipment yourself.
How to start mining?
To join the ranks of miners and start mining cryptocurrency, you need to follow these steps:
Step 1: choose and purchase equipment
Step 2: create a wallet
Step 3: choose a miner
Step 4: join the pool
Let's take a closer look at each step.
So, you have two types of devices to choose from: ASICs and GPU rigs. To make the right decision and decide on specific ASICs or rigs, the following factors must be considered:
First of all, you need to decide which coin you want to mine. This is important because only coins of a particular algorithm can be mined on ASICs. For example, if you want to mine BTC, Antminer L3 + is not for you. But it will be a great choice if you want to mine LTC.
- Equipment power
After the list of your potential devices has been reduced to those that can mine the coin of your choice, familiarise yourself with the characteristics of each of them and find out what hashrate you can achieve on them.
- power usage
In the process of mining, the equipment constantly consumes electricity, and usually in considerable quantities. To avoid cosmic electricity bills, choose devices with the lowest power consumption. However, after purchase it can be reduced. This can be done using the Hive OS control and monitoring system or the Hiveon ASIC firmware .
- Spare parts availability
Even the most expensive mining equipment can fail. To minimise downtime and loss of profit, choose devices that you can easily get spare parts.
- Availability of service centers
You should also pay attention to the availability of warranty and post-warranty service centers in your city or country.
- The cost
Mining devices can be quite expensive, especially since middlemen often overcharge. This factor can be decisive when choosing, especially if you are going to create a large farm.
You can start your search for suitable ASICs from this site . On it you will find the names of the models, their release date, hash rate, algorithm, and so on. If you are looking to buy graphics cards for rigs, check out the NVIDIA RTX 3060 Ti, and the AMD 5600XT and 5700XT if you can find any at a reasonable price.
Creating a wallet
There are two types of mining wallets: cold and hot. Cold wallets are physical devices that do not have an internet connection. But the "hot" ones are available online or from a mobile phone. This is convenient, since they are always at hand for the owner, but at the same time they can be hacked. Cold wallets cannot be hacked, but they can be accidentally lost or forgotten somewhere.
To choose the type of wallet, decide what you need it for. If you are looking to hoard mined cryptocurrency, a cold wallet would be an excellent choice. And if you just want to pay for your purchases on the Internet, you can create a “hot” one. Also decide how much you are willing to spend on creating a wallet. A cold wallet needs some kind of external device (for example, a USB flash drive), but a hot wallet can usually be created for free.
If you chose a "hot" wallet, do not create it on the exchange:
- Exchanges attract hackers
- You will not have access to money during maintenance
- Private keys are not shared on exchanges, so your hot wallet will never be completely yours
When choosing a provider, pay attention to its reputation and level of protection.
The choice of the miner directly depends on the choice of the coin and, accordingly, the algorithm. For example, the coin you have chosen is on the ETHASH algorithm. The following miners are recommended for it:
- T-Rex / Ethminer для Nvidia
- TeamRedMiner / lolMiner для AMD
- lolMiner for hybrid rigs (AMD and NVIDIA in one rig).
It all depends on the individual hash rate, but most often it is more profitable to mine on the pool than alone, because your income will be much more stable. When choosing a pool, consider the following factors:
There are many cryptocurrencies, but you are unlikely to find a pool that supports absolutely every one of them. So start by choosing a coin - this will narrow down the list of your potential pools.
- Reward system
There are several options for pool reward schemes: PPS, PPLNS, PPS +, and so on. The best choice would be PPS +. This system will provide you with the most stable income.
Mining on most pools is subject to a commission - look for the pool with the lowest, because this directly affects your profit. Also, don't forget about transaction fees. Some pools cover them, so miners don't have to worry about it.
- Minimum payout threshold
The lower the payout threshold, the more often you will be able to withdraw your money. But don't forget about transaction fees. If on your pool you pay for them yourself, then frequent withdrawal of funds will also mean frequent payment of commissions.
Consider the Hiveon pool . You can mine ETH and ETC on it. Pool fees are 0% and transaction fees are paid by the pool - a very rare combination. The servers are located all over the world and the minimum payout threshold is 0.1 ETH or 1 ETC.
A few words about the costs of miners. So, you purchased the equipment (the amount depends on the selected models and the number of devices) and organised a farm. What expenses await you now?
- Operating expenses (rent of premises, purchase of software, etc.)
- Fees (pool fees, transaction fees, and so on)
Don't forget that there is a possibility of expenses for device repairs. Also, you may want to buy more devices, or you may have to buy new equipment in the event of a serious breakdown of the old one. This is not a mandatory expense item, but you need to remember about it.
Should you become a miner in 2021?
Mining in 2021 looks quite promising: stable growth of cryptocurrencies, availability of powerful equipment on the market, and so on. Everything seems quite promising, but one should also take into account the fact that the prices for the equipment are very high, and some devices are very difficult to get. In addition, there are network difficulties and a large number of miners to be aware of. Another factor is that the industry is on the cusp of major changes (ETH 2.0 and everything that comes with it). When these changes take effect, it will no longer be possible to mine ETH on rigs and ASICs. Mining will turn into staking, and the equipment will simply become useless. Also, no one can say for sure how long the market will be in an uptrend. Yes, cryptocurrencies are growing now, but what will happen, for example, in two months? No one can guarantee your ROI.
However, mining can still bring you good income, you just need to do your due diligence. Look for equipment that will allow you to achieve high hash rates without consuming huge amounts of electricity. Use software and firmware to reduce your electricity consumption. Choose the most profitable pools. Keep track of the condition of your devices and service them in time to avoid repair costs or the forced purchase of new equipment. And don't forget to keep your funds safe - protect your wallet.
Hive OS is a one-stop solution to control, monitor and administer your ASIC and GPU mining farms