There are three major categories of bitcoin mining equipment, each more costly and more effective than the last. This guide to setting up a bitcoin miner describes each of them and discusses how to make them function.
By this stage, you’ll understand how bitcoin works and what mining means. But we need to go from theory to practice. How do you set up a bitcoin mining hardware and begin creating some digital cash? The first thing you need to do is decide on your hardware, and when you choose it, there are two primary things to think about:
Hash Rates
This is the number of calculations your hardware can execute every second as it attempts to break the mathematical problem we outlined in our mining post. Hash rates are calculated in megahashes, gigahashes, and terahashes per second (MH / sec, GH / sec, and TH / sec). The greater your hash rate (compared to the present average hash rate), the more likely you are to fix a transaction block. The mining hardware comparison page of the bitcoin wiki is a nice location to go for rough data on hash prices for distinct hardware.
Power Consumption
All this computing energy checks electricity, and it costs cash. When making your decision, it’s worth looking at the energy consumption of your hardware in watts. You want to make sure you don’t end up spending all of your money on electricity to mine coins that won’t be worth what you paid.
Use these two variables to work out how many hashes you get for every watt of electricity you use. To do this, split the count of hash by the number of watts.
For example, if you have a device of 500 GH / sec and it takes 400 watts of power, then you get 1.25 GH / sec per watt. You can check your energy bill or use an internet electricity price calculator to figure out how much that means in difficult money.
There’s a caveat here, though. In some cases, you will use your computer to run the mining hardware. Your computer has its own electricity draw on top of the mining hardware, and you will need to factor that into your calculation.
Mining Hardware
There are three primary categories of hardware for bitcoin miners: GPUs, FPGAs, and ASICs. We will investigate them in depth below.
CPU/GPU Bitcoin Mining
The least strong category of bitcoin mining equipment is your own laptop. Theoretically, you could use your computer’s CPU to mine for bitcoins, but in reality, today’s norms make this so slow that there’s no point in it.
By adding graphics hardware to your desktop computer, you can improve your bitcoin hash rate. Graphic cards feature graphical processing units (GPUs). These are intended for heavy mathematical lifting so that they can calculate all the complex polygons required in high-end video games. This makes them particularly good at the SHA hashing mathematics needed to fix transaction blocks.
You can purchase GPUs from two major suppliers: ATI and Nvidia. High-end cards can cost hundreds of bucks, but also offer you an important benefit over having a CPU. For instance, an ATI 5970 graphics card can offer you more than 800 MH / sec compared to a CPU, which will usually give you less than 10 MH / sec.
One of the good things about GPUs is that they also leave their choices open. Unlike other later discussed alternatives, these units can be used with cryptocurrencies other than bitcoin. For instance, Litecoin utilizes distinct working algorithm evidence to bitcoin, called Scrypt. This has been optimized to be friendly with CPUs and GPUs, making them a useful choice for GPU miners who want to switch between distinct currencies.
These days, GPU mining is mainly dead. Bitcoin mining difficulty has accelerated so much with the release of ASIC mining power that graphics cards can not compete. If you want to use them, the best way to save on running distinct PSUs for different boards is to equip yourself with a motherboard that can handle various panels.
FPGA Bitcoin Mining
A Field Programmable Gate Array is an integrated circuit intended to be configured after it has been constructed. This allows a manufacturer of mining hardware to purchase the chips in quantity and then customize them for bitcoin mining before placing them into their own equipment. They give efficiency improvements over CPUs and GPUs because they are tailored for mining. Single-chip FPGAs were seen operating at around 750 Megahashes / sec, although at the high end. It is possible, of course, to put more than one chip in a box.
ASIC Bitcoin Miners
This is where the action really is at. Application-Specific Integrated Circuits (ASICs) are made to do just one thing: mine bitcoins at insanely crushing speeds with comparatively low power consumption. Because these chips have to be specifically designed for this job and then manufactured, they are costly and time-consuming to create–but the speeds are amazing. At the moment of writing, units are selling at speeds from 5-500 Gigahashes / sec (although it was an issue effectively getting some of them to ship). Vendors are already promising ASIC equipment with much more energy, extending into the 2 Terahashes / sec range.
In September 2015, 21 published its ‘ Bitcoin Computer, ‘ which houses a mining chip and retails for about $400. It is targeted at developers who want to construct apps with and not those who want to mine bitcoin for profit.
Mining Profitability Calculation
Calculate your miner’s predicted profitability before making your purchase using this one’s great mining profitability calculator from The Genesis Blocker. You can input parameters such as cost of materials, hash frequency, power consumption, and the present bitcoin price to see how long it will take to pay back your investment.
One of the other main parameters here is the complexity of the network. This metric determines how difficult it is to fix transaction blocks and differs according to the hash frequency of the network. The difficulty is likely to improve significantly as ASIC devices come onto the market, so it might be worth raising this metric in the calculator to see what your return on investment will be like as more individuals join the game. Use this guide to calculate mining profitability for more data.
Once you’ve selected your hardware, you’ll need to do several other stuff:
Mining Software
Depending on the machinery you choose, you will need to operate software to make use of it. Typically you will need a host computer running two stuff when using GPUs and FPGAs: the normal bitcoin client and the mining software.
Standard bitcoin client
This software connects your laptop to the network and allows it to communicate with the Bitcoin customers, forward transactions, and keep track of the blockchain. It will take some time for it to download the entire Bitcoin blockchain so it can start. The Bitcoin customer efficiently relays data between your miner and the Bitcoin network.
Bitcoin mining software
Bitcoin mining software is what instructs the hardware to do the hard work, passing through transaction blocks to fix it. Depending on your working scheme, a range of these is accessible. They’re accessible for Windows, Mac OS X, and others.
Some might also need mining software for their ASIC miner, though some newer models promise to ship with everything already configured, including a bitcoin address, so the only thing you need to do is plug it into the wall.
One intelligent developer even created a mining operating system intended to operate on the Raspberry Pi, a low-cost Linux-sized credit card computer intended to consume very tiny quantities of energy. This could be used to power an ASIC miner connected to the USB.
Joining a Pool
You’re all set up now. Good to you. I bet you thought you’d be mining more bitcoins than the dollars printed by the Federal Reserve, didn’t you? Sadly not. You will have little opportunity of achievement in mining bitcoins unless you work with other individuals. You can find out more about this in guides on how to join a mining pool.
