Cryptocurrency mining is one of the safest ways to make money from decentralized finance in 2022. Just last year alone, large and small miners of Bitcoin earned a whopping sum of $15 billion.
The best part is that anyone can mine any cryptocurrency with the right equipment and understanding of the steps to take. In the early period of crypto mining, you had to rely on heavy machinery like a collection of CPUs. But now, there are small chip-like devices that small-scale miners can turn to, and it does not put a strain on the environment or your pockets.
These devices are also easy to install, and maintenance is just as breezy. But you must first understand primary concepts such as Proof-of-Work and crypto mining rigs, and we’ve got you. Stay right there!
What is a Crypto Mining Rig?
A crypto mining rig is an essential operation in mining cryptocurrency. This is how crypto networks that use a Proof-Of-Work consensus mechanism secure their ecosystem and validate the accuracy of data.
Proof-Of-Work consumes much energy (which is why new consensus mechanisms are striving to replace this technique), but there is no doubt that there is still much money to be made. There are other consensus mechanisms too, and each has a mining rig or equipment that best suits it.
How does a crypto mining rig work?
A cryptocurrency mining rig is a technology or system that searches for the hidden sequence of numbers that validate the legitimacy of a cryptocurrency block. To fully understand how mining rigs work, you must first comprehend what crypto mining is.
It was invented by Nakamoto Satoshi, the creator of Bitcoin. It involves solving a series of mathematical puzzles to find the one that validates the block.
This is called Proof-Of-Work, and it requires high computational power. You should also know that it is highly competitive, and the reward (the cryptocurrency of the network you work for) goes to only the finder of the correct hash.
The high competition has led to the invention of devices or technology to make it easier, more profitable, and more environmentally friendly to mine cryptocurrencies.
And you can create a mining rig in your home or a rented space, depending on how dedicated or involved you want to be.
How to build a crypto mining rig?
When building a crypto mining rig, consider four major options:
A CPU miner
A CPU miner is one of the foremost cryptocurrency miners in the industry. It has a high computing power that was once enough at the beginning stages of bitcoin mining since it was the only go-to option to consider.
The computer’s Central Processing Unit used to be efficient at mining large loads of Bitcoin, which was used at the advent of cryptocurrency. However, it was not exactly designed to mine bitcoins and would consume high amounts of energy, thereby making it non-ecofriendly.
Although a CPU miner is now considered archaic for mining cryptocurrency, major tokens like Monero and Bitcoin still rely on it to validate their blocks and security.
Here, you solve complex mathematical puzzles for mining rewards. When CPU mining was still popular, it was also a more rewardable way to increase your income.
In that case, the amount of energy consumed was easily affordable by miners because they earned hundreds of Bitcoins (this was at the very early stages). But Nakamoto introduced the halving protocol to ensure that mining bitcoin does not get out of hand.
With a limit to the amount miners earn, it becomes possible for the token’s value to grow. There is a limit to the amount of bitcoin that can ever exist.
Presently, there are little above 19 million in circulation, but the halving protocol ensures that the maximum number ever to exist is, at most, 21 million. This is why CPU mining has gone out of style.
However, it is the only way you can mine Monero.
There are two ways to make money from mining with a CPU. The first is solo mining, and the other is a mining pool.
You can use one or a couple of CPUs to mine cryptocurrency with solo mining. But of course, this is less profitable than pool mining.
Pool mining is the combination of several computers. These systems put their computing power together to increase their chances of earning higher. The collection of resources gives users better chances of discovering the hash.
Despite its obvious shortcomings, there are several benefits of using a CPU miner. One is that there is less noise associated with using the device. It also generates lower heat, which means you can leave your miner in your room or around you, and you will spend less on cooling equipment or refrigeration.
This is a less expensive way to mine cryptocurrency, or it used to be until more complicated devices replaced a CPU miner.
Another advantage of using a CPU miner is the ease and affordability associated with maintenance. You pay less to create your mining rig, and joining a farm or pool is also affordable.
Look for any AMD Ryzen CPU to get started. Bitcoin, Monero, X-Cash, and PascalCoin are some tokens you can mine with a CPU miner.
A GPU miner
GPU stands for graphics processing unit, and you will have guessed right if you thought this was the microchip belonging to gaming computers. Devices like ASUS, Nvidia, and MSI are popular PCs that allow you to create new bitcoin through mining.
Gamers are at the profiting end of this technology. A gaming laptop already has a powerful GPU chip, which you can use to mine cryptocurrency without interfering with other activities.
But even better, you can change your GPU algorithm to make it mine different cryptocurrencies.
This is because every GPU has a Large Arithmetic Logical Unit or ALU, which makes it easy for this technology to compute or process large batches of data within a short period.
Initially, GPUs were not designed to mine cryptocurrency. Instead, they were made to bring gaming ideas, gaming worlds, and other graphics-intensive applications to life. Imagine it this way: the computing power that goes into powering a simulation like the world of Call of Duty or any other well-developed game must be massive and super-advanced.
It is this capacity that miners take advantage of. Instead of dedicating their intensive computing power to gaming alone, they also get to take advantage of the technology to discover the hidden numbers that verify a block or record of a cryptocurrency.
Before the advent of other mining options like an ASIC or FPGA miner, a GPU was your best and most profitable entry into crypto mining. Its fast computing power gave users an edge in discovering the hidden 64-digit long hash for bitcoin and the other hash rates for tokens like Ethereum.
You can join a mining pool with your GPU miner or decide to go solo.
However, the downside of using a GPU miner is that it generates more heat and noise than a CPU miner because it does more computational work. It also consumes more energy, making it one of the least energy-efficient options you can turn to for crypto mining.
But again, there is no doubt that a GPU miner has a strong computational power to give you an edge when mining cryptocurrency. It is affordable, and you may not even need to buy one if you already have a gaming computer.
An ASIC miner is a special device created to mine a cryptocurrency, and in most cases, the choice is Bitcoin. ASIC stands for Application-Specific Integrated Circuit, a microchip (weighs about 40 pounds) designed to mine Bitcoin, hence the moniker “application-specific.”
The program has been integrated to execute only SHA-256 hash functions, which is the hash function on which the security of the entire Bitcoin blockchain runs. It is 256 bits long and ensures that the input and output are either the same or nothing, hence the deterministic nature.
This is quite different from many other cryptocurrencies in the market. The reason is that Proof-Of-Work is very energy-draining (Elon could not stand this and thereby withdrew his interest from Bitcoin mining and put it in a more environmentally-friendly token).
The green movement is growing, so even cryptocurrency projects strive to adopt more eco-friendly methods of mining digital assets. This leads to modifications in their consensus mechanisms (as in the case of Ethereum, moving from Ethereum to Ethereum Proof-Of-Stake) or software that is initially built without the need for high energy consumption, like the Solana blockchain and many others that are emerging today.
Taking the issue of power consumption into consideration, it is for this reason that ASIC mining chips cannot mine many of the digital assets in existence today. The latest projects adopt a different approach, so you can only use your ASIC chip to mine tokens that use an SHA-256 hash function algorithm.
This is what the chip understands, but this is also what limits the ASIC miner. Taking everything into consideration, an ASIC miner may not be the one for you if you desire to mine more than a couple of digital assets.
But if you are satisfied with focusing on securing the bitcoin blockchain, among other protocols that employ the SHA-256-bit hash function, ASIC miners were made for you.
You can combine more than two ASIC miners to mine Bitcoin for you, and since that is what they have been designed to do, they can be left with no supervision. Then, you have built an ASIC mining rig.
WhatsMiner M32 and Antminer S19 Pro are two ASIC miners worth checking out.
ASIC miners are among the strongest mining software in the market. They have more computing power than GPU miners, so they consume more energy and require more equipment to cool them.
You will also invest in noise-cancellation technology or systems because an ASIC miner generates much noise. This limits the number of ASIC miners you can have in a single room unless you are a company dedicated to mining cryptocurrencies.
FPGA is short for Field Programmable Gate Array, another high-performance tech you can use to mine bitcoin and other cryptocurrencies. It is a better alternative because it can find more hashes without consuming overwhelming data.
It is a blank digital circuit, which means you can program it to suit the hash model of your choice. The performance capacity is also quite high, like those you see on Graphic Processing Units.
The programable function is advantageous because users can change the software to mine any cryptography they want. It is that versatile.
An FPGA miner is your best bet as a beginner miner. It helps you make more money within a shorter period, and the adaptability of the software also helps.
The process of mining bitcoin or any other cryptocurrency is only profitable when you use a device with high computational power, and you must also consider the cost of running that system.
FPGA miners are environmentally friendly because they have been designed to mine cryptocurrency. Thus, they do it at a fast rate and efficiently. The best part is that you will pay less for electricity, leaving you with more profits than when using other cryptocurrency mining options like a GPU or CPU miner.
Remember mining pools and farms? Your FPGA miner can also be customized to join a mining pool or farm, increasing your chances even more.
But nothing can beat the device’s ability to switch cryptography algorithms at the click of a button. You only have to customize the device to mine a certain cryptocurrency. The diversity ensures that you can change programs to the most profitable ones.
Mining cryptocurrency can help you make enough money from cryptocurrency. However, the value of money that can be made from securing networks and validating hashes has reduced significantly since the “halving protocol” Nakamoto set in place for Bitcoin.
Therefore, using a mining calculator can be helpful. It is software that requires variables like the energy consumed, your mining software or hardware, and the digital token you want to mine. The computer sums these up and lets you know how much profit you stand to make from that endeavor.