The simplest ways to get cryptocurrency coins are by either buying them or by accepting them as payment for goods and services. If, however, you want to get involved in the creation of new coins as a miner, you have some options.
Your level of return will vary according to the method you choose and is vulnerable to market movement but almost anyone can give mining a go at some level.
Some parts of this guide are a little technical – sadly we don’t make any bones about that. Crypto is a bit technical. There is a learning curve here and we hope this helps push you up it a bit further than when you started.
You lease computing power from providers who run their own hardware in bulk. These mining farms are found in places with cheap electricity, for example, China or Iceland, to keep their overheads low. Your earnings depend upon how much power you’re leasing and you never own the hardware.
Due diligence: Do your homework for proof that the cloud mining provider is real. Pictures and live feeds from their farms are a good sign. Make sure you know how and what they’ll charge you and when you can expect payouts before you lock yourself into a contract.
You pay a company to house your equipment in temperature-controlled data-centres for a monthly fee. These companies may sell the rigs or allow you to send in your own. The hosting company will normally include minimum uptime standards and regular maintenance in your contract.
Due diligence: Hosting fees will vary according to what type of rig you are supplying. Always check terms and conditions for minimum uptime standards and what happens to your rig in case of non-payment of fees or catastrophic failure, e.g. fire or flood.
Hosting Service Examples
You can build or buy a mining machine for use at home or with a hosting provider. There are two different platforms, ASIC and GPU.
This stands for Application-Specific Integrated Circuit – a machine that only does one thing but is superb at that. ASIC machines come pre-built but you will need to add a power supply. Most ASIC machines use the SHA-256 or Scrypt algorithms which mine Bitcoin or Litecoin, respectively. Other coins are available under each form of calculation but you have to stick to the algorithm you purchased, there’s no customisation. Most ASIC miners are available from companies that run mining farms on the same hardware which can lead to availability issues. A web interface lets you add your wallet details for payouts. New iterations can be up to 50% faster than the previous model so the focus is on making a profit as fast as possible. Hence for maximum efficiency, the miners stay active 24/7.
Due diligence: ASIC gives the best rate of return on the right currencies. However, their environmental needs are inconvenient, demanding their own clean, ventilated and ideally soundproofed space. A good option is to make use of a hosting company as above, who are able to handle the needs of ASIC machines in clean spaces, allowing for maximum uptime. If you DO decide to run ASIC rigs at home, then you’ll need a secure and well-ventilated room away from your living space.
Current ASIC Miners
A mining rig based on GPUs makes use of the calculating ability of retail graphics cards to work through the mathematical problems generating new crypto coinage. Unlike ASIC machines GPU miners require a full computer to work. Although this makes them trickier to set up, they are far more household-friendly than ASICs. GPUs cannot compete with the speed of dedicated ASIC machines and are therefore suitable for coins resistant to being mined with an ASIC rig. ASICs have cornered the market on Bitcoin and its clones but the Ethereum algorithm and its offshoots work better on GPU rigs.
GPU miners broadly fall into two categories; dedicated mining engines and part-timers, general purpose machines which can be used for tasks other than mining, such as games. The initial level of investment can be higher than ASIC machines but GPU rigs have several advantages; being built from retail components they have standard warranties, usually at least 1 year. They also tend to hold their value on the resale market as gamers look for affordable upgrades.
Due Diligence: GPU mining can be an excellent introduction to cryptocurrency creation but requires more set up and software maintenance than ASICs for a slower return. The potential is there to make a reasonable profit but this needs to be balanced against the costs of power. The versatility of GPU mining is that different software allows you to mine different coins so you can adapt to a changing market and take advantage of new coins as they arise.
GPU miners are just specialised PCs at heart. You CAN buy pre-built but you can also put together a reasonable first machine from easily available components. This gives you control over the rig and allows you to upgrade at a later date if you want. You’ll need the following components, a clear space to build and access to one of the many excellent tutorials available online. Or a tech-savvy friend.
Case: A dedicated miner needs to mount multiple graphics cards; 6 or 8 is considered the sweet spot for the home miner, and that means a frame case. These open structures let you mount multiple GPUs and fans, giving maximum airflow and keeping the cards cooler. They’re unsuitable for use as home PCs as the exposed components mean you’ll want to keep them away from children and pets to avoid damage. Part-time miners can use closed cases housing 1-3 cards but you need to check how big the GPUs are to ensure they’ll fit.
Almost any processor can run a mining rig, they don’t need to be that powerful. However while a 6-GPU machine doesn’t need it, a 1 or 2 GPU part-timer might benefit from the massive L3 cache (fast, on-chip memory) and the high number of cores on the new AMD Ryzen and Threadripper processors. These can effectively give you the power of an additional GPU and although they have a higher upfront cost they stand a good chance of paying for themselves within a year. The choice of CPU will dictate your motherboard options and dedicated miners will have more choice with Intel processors.
Dictated by your processor and how many GPUs you’re using. Currently Intel boards are more suited for multi-GPU miners, AMD for general-purpose machines. Key features to look out for are build quality, stability and number of supported GPUs. For Motherboards supporting 6+ GPUs you will need to use “PCIE risers”to connect your motherboard to the GPUs on their frame. For the protection of your components look for risers with 3 or 4 capacitors, the best of which are made in Japan.
Your mining power supply has the greatest potential to damage your system, so look for those rated “Silver” or better. Once you’ve worked out how much power your rig draws by adding up the requirements of the components, factor in another 20% as a safety margin in the PSU capability.
The very best mining cards have a lot of high speed (DDR5) memory, i.e. 8gb or more. These are the most expensive parts but the modular nature of building a mining PC means that you can add to or upgrade the cards as finances permit.
The home build option is not necessarily the cheapest way to mine coins but for learning about the process and your options it’s hard to beat getting hands-on. The suggested components are very good but you can pull something together with spares you have lying around or picked up 2nd hand that can show you how mining works and if you want to invest in the next step.
As you can see with coin mining there are a lot of options. You have not missed the boat by any stretch of the imagination. Depending on your current level of knowledge or time you can either join a cloud or remote based mining service, or if you feel up to it you can build your own crypto miner. Whatever you decide we hope this guide has given you some ideas.