Beginner's Guide Crypto
Bitcoin mining began in 2009, with Bitcoin (BTC). Bitcoin's mining difficulty was so low in the early days that Bitcoin miners were able to mine large quantities of digital currency. The rise in Bitcoin's value allowed miners to make impressive profits.
In the years to follow, other cryptocurrencies with similar mining models as Bitcoin entered the market. It was possible to mine other digital currencies (altcoins), with less competition, than Bitcoin.
You can mine any cryptocurrency by purchasing or building your own crypto mining rig. This article will explain what cryptocurrency mining is and what mining rigs do. We'll also show you how to build your own mining rig.
What is cryptocurrency mining?
Blockchain technology is used by cryptocurrency to create distributed and decentralized networks made up of nodes. These nodes are run by individuals or groups and collectively they secure the network through the process of consensus.
Mining and stake are the most common methods of securing networks. We will be focusing on the mining.
Mining-based networks rely on a consensus method called Proof-of Work. The miners are responsible for "mining" blocks of data that represent transactions. These blocks are then added to a blockchain ledger.
Miners are required to solve cryptographic puzzles, which require intensive computational work. As a reward for their efforts, they are given the cryptocurrency of the network. The process is repeated in order to maintain an updated ledger that reflects the most recent network transactions. The first miner to complete the "mining task" will earn rewards.
Mining Difficulty changes as the number of miners increases or decreases. This mechanism controls the amount of time required to mine rewards. It prevents coins being mined too fast or slowly, and keeps transaction processing times relatively constant.
Mining tasks are becoming more complex and require specialized equipment. Mining used to be possible with standard computer hardware. However, the Difficulty level has increased so much that it is now almost impossible.
If you have ever heard of NVIDIA GPUs running out of stock, it is because mining enthusiasts purchase these powerful hardware devices to perform their mining!
Halfing is another important mining method. This idea can be used to create a'scarcity of supply' for digital currencies, which could help fight economic inflation.
As an example, if we take Bitcoin, the mining rewards are roughly halved about every four years. In May 2020, the most recent Bitcoin halving occurred. This reduced mining rewards from 12.25 BTC to only 6.25 BTC. The next halving will take place in 2024, and rewards will be reduced to 3.125 BTC.
Why should you mine cryptocurrency?
Why should you bother mining if it requires specialized equipment and is becoming increasingly difficult? There are several reasons.
You can first choose an alternative to Bitcoin when mining cryptocurrency. The Bitcoin mining difficulty level may be high, but this is not the case with other'smaller cryptocurrencies'.
Imagine you are interested in knowing how profitable mining these other cryptos can be. You can estimate the time it will take for you to recover your hardware and electricity costs by using online mining calculators.
Second, it is possible that the cryptocurrency you mine may appreciate in value. This can take a while depending on if the crypto market has a bull or bear market. But over time, this can be a nice revenue stream.
Hardware and electricity are the two major costs that you should consider in order to turn a profit. You might have a stable income stream if you are able to mine enough cryptos to cover these costs and turn a profit.
Last but not least, you will be a part of the security of the cryptocurrency network. If you are a believer in the basic principles of cryptocurrency and blockchain technology, this can be attractive.
What is a Mining Rig?
A cryptocurrency mining rig is an array of hardware designed to carry out computationally-intensive mining tasks as efficiently as possible. This could be done via CPUs or GPUs depending on the mining setup.
By 2022, GPU and ASIC mining rigs will almost completely replace CPUs for mining. They can be up to 100 times more powerful, but also more expensive than CPU-based mining equipment.
A mining rig, at its core, is a computer designed to perform a specific task. If you want to learn how to build a crypto-mining rig, then you will need the following components:
- Mining Rig Frame
- ASICs or GPUs?
- Motherboard
- The following are some of the ways to get in touch with each other
- ARRANGEMENTS OF RAM
- Storage (SSD and HDD)
- Power Supply Units (PSUs)
- PCIe USB Risers
You'll also need mining software, a bootable operating system (Windows, Linux etc.), and a cryptocurrency wallet. The software is loaded on a USB flash drive. You'll also need a monitor and a keyboard and mouse to complete your setup.
How much does a mining rig cost?
Budgeting for your mining system is a complex process. Even the simplest setup, which costs between $1,300 and $1,500, will be more expensive in 2022 if you use the GPU or ASIC.
It is tempting to go with ASICs because they are cheaper, but you might need two GPUs for an efficient setup.
Electricity costs will also vary depending on your location.
Calculate the total wattage required to run your mining rig for 24 hour and you can estimate your monthly cost. Don't forget to include this cost in your crypto-mining setup.
What Cryptocurrencies can you mine?
You can mine several different cryptocurrencies. Crypto is the most popular and prominent choice but it's probably out of the reach of the majority due to the high levels of mining difficulty and competition.
You'll be better off focusing on other crypto tokens, such as those listed in the table. The dollar value of each token will change over time, and the block rewards will also vary.
Who knows what you could make if your mining a coin that is popular or has the potential to be adopted in the future? If you mined DOGE in 2020, and then sold it when the price soared at the beginning of 2021, that would have made you very happy!
How to build a mining rig
After you've learned what cryptocurrency mining is and why it's valuable, as well as which cryptocurrencies can be mined, let's learn how to build your own mining rig.
We will focus on building a GPU-based mining rig. Assuming that you have already selected your components, we will proceed.
1. Prepare the Motherboard
The motherboard is the heart of your mining rig.
You'll first need to put your motherboard on an anti-static surface. The CPU can now be installed in the motherboard CPU socket.
2. Install CPU, Heat Sink Fan
Install the CPU with care.
Be sure that the CPU lever socket has been released. The CPU will be placed into this socket.
It is important to ensure that you can clearly see the arrow indicating the direction of the CPU when it is inserted into the slot.
You should be careful when handling your CPU to avoid bending the pins. Place the CPU gently in the socket, and then turn the lock lever.
Apply thermal paste on the top surface your CPU. The heat sink and fan can now be mounted on the CPU. The fan cable can be attached to the motherboard.
Please refer to the component manuals at each stage in the build process for specific instructions.
3. Install RAM
Your mining rig won't require much RAM.
Install your RAM into the motherboard's memory slots.
Open the brackets at the ends of the RAM slots. Push the RAM into memory slots gently, but firmly.
If you have installed RAM correctly, you will hear a click when the brackets at the ends automatically latch on to the RAM modules.
4. Install Motherboard
Install the motherboard in the mining frame's lower deck.
You may want to place the motherboard on an object that is not conductive (wood or plastic), to avoid any short circuits and scratches.
If you do not want to use the screws, make sure that the motherboard is only in contact with the holes.
The motherboard should be screwed in tightly.
5. Install Power Supply Unit
The PSU provides power to your entire system.
The Power Supply Unit will be installed next, close to the Motherboard. The 24-pin power cable can be connected to the motherboard, and the 8-pin cable will power the CPU.
Refer to the manual of your PSU to find the correct 8-pin connector for the CPU. Do not confuse it with the GPU 8-pin cable which is typically thinner.
The GPU will be attached to the frame at the top to allow for a good airflow. The USB riser can be connected to the GPU using the x16 connector.
Connecting a USB cable to the x1 or x16 USB cards is the final step of the riser installation. The GPU is now connected to the motherboard.
This step only leaves the power.
Start by connecting power cables to the USB riser's x16 connector (connected to your GPU). This could be either a 4-pin Molex, 15-pin or 6-pin PCIe cable, depending on the PCIe Riser model.
Connect the GPU's PCIe power cables 6+2 to the PSU.
How to Setup Mining Rig
It's now time to set up the mining rig.
Connect the GPU with a monitor using a cable that is compatible (HDMI, DP). Then, we need to connect the mouse, keyboard and ethernet cable.
Now we're ready to finish our crypto mining setup. Configure the miner now!
Press F2 (or 'delete" to access BIOS settings on your motherboard) after you have turned your mining rig ON. Press F7 to get the advanced settings.
The next step is to configure the hardware settings of our system.
- Select DMI/OPI configuration, click System Agent (SA), and set DMI Maximum Link Speed to Gen1
- Change all PCIEX16_x ports to Gen1 by staying in the System agent and accessing PEG Port Configuration.
- Disable ALL SATA devices not connected to SSDs on the PCH Storage Configuration page.
- PCI Express Configuration is still available in the PCH Configuration window. Set PCIe speed to Gen1.
- Disable HD Audio Controller on the Onboard Device Configuration screen
- Set the 'Restore AC power loss' option to 'Power on'.
- Disable Fast Boot in the BIOS Boot Settings screen and then enable 'Above4G Decoding.
Plug a USB drive with an already configured bootable Windows OS in a USB slot available on the motherboard. Once this has booted, follow the steps to install OS.
Note: Don't install OneDrive, Cortana or any other unnecessary services.
When the OS installation is complete, login to Windows and go directly to the Nvidia site to download the latest GPU drivers. Installing these drivers, make sure to uncheck everything except the graphics driver. We don't need our miner bloated with useless software and apps.
Install the GPU mining software that you want. Wait for the installation process to finish.
The last step is to connect to a mining pool using the GPU mining software. Follow any instructions provided on the website of the mining pool.
You're ready to start mining cryptocurrency!
Remember these Things
Before you build your crypto mining set-up, there are some things to consider.
First, the cost of electricity. Electricity costs play a major role in your mining rig's profitability. It is the only recurring cost that all miners must pay.
If you plan to use your mining rig hardware 24 hours a day, this will lead to a massive amount of power consumption. Knowing how much electricity you use is essential to calculating the profit that can be made from mining.
The current value of the crypto token will determine your actual mining profitability. If you are lucky, you may be able ride the wild bull market of 2020-2021 that led to huge increases in value for cryptos including mining tokens.
Cooling is the next thing you should keep in mind. You must ensure that the GPU and other hardware components of your rig are cooled properly to prolong their life.
The location of the mining rig is also important for cooling. In general, mining rigs are noisy machines which increase the temperature in their surrounding.
If you can, keep your computer in a separate, ideally cool room. This will keep noise at bay and allow passive cooling.
The selection of GPU or ASIC is perhaps the most critical factor in any mining rig.
There are many choices in this category. As you might expect, the higher the power of the device, then the better the performance and the higher the price. Check out our article about the 8 best GPUs to build a GPU Mining rig if you are unsure of which one you should choose.
If you want to mine crypto but aren't sure if your mining rig is ready, you could also look into cloud mining platforms.
You can mine cryptocurrency without having to purchase or build a mining rig. This eliminates the need for electricity or hardware maintenance. Cloud mining contracts are easy to purchase. Check out our article about the 8 best Cloud Mining websites if this is of interest to you.