Is mining bitcoin still a viable venture to undertake in today’s world? We will explore that question in this article. But first, let’s explore the various ways in which you can mine Bitcoin.
By reading this article we are assuming that you are already familiar with the basic fundamentals of Bitcoin and Bitcoin mining. In this article, we’ll explore the actual hardware, software and technical aspects that are required in order to be profitable in Bitcoin mining.
As described in our previous Bitcoin mining article, miners get rewarded every time the “hash puzzle” is solved. The speed at which you are able to solve this puzzle is based on the hardware that you are using. This speed measurement is referred to as the Hash rate.
The Hash rate refers to the number of calculations that your hardware can perform every second as it tries to solve each hash puzzle to complete a transaction block. Hash rates are measured in megahashes, gigahashes, and terahashes per second (MH/sec, GH/sec, and TH/sec). The higher your hash rate (compared to the current average hash rate), the more likely you are to solve the “hash puzzle” and complete a transaction block.
This of course means that the more hardware resources you dedicate towards Bitcoin mining, the more likely you are to earn Bitcoin. This can get very expensive.
All electrical and electronic devices require energy in order to function. This energy comes in the form of electricity – and (for the time being) electricity is not free. In order to profit, you need to ensure that your electrical costs are not higher than the value of the actual Bitcoin that you’ve mined.
Your electrical consumption can be measured in watts. With these factors in mind, you can calculate how many hashes you’ll be getting for every watt of electricity that you’ve used. To do this, divide your hash count by the number of watts.
Here’s an example. Let’s say that your rig’s output is 700 GH/sec and this rig consumes 400 watts of electricity, your end result would be 1.75 GH/sec per watt.
You can use our Bitcoin Mining Calculator to calculate your profit – so there’s no need to pull out your own calculator to do the math.
Bitcoin mining hardware essentially falls under three main categories:
By today’s standards, CPU/GPU Bitcoin Mining, is the least profitable way of earning Bitcoin – and it would simply be best to avoid using this method altogether. Your desktop computer simply cannot compete against hardware rigs that are completely dedicated to the sole purpose of mining Bitcoins.
You can of course add additional graphics cards to your desktop computer (if the motherboard supports multiple cards) but this will still not be enough to cover the electrical costs and also earn a respectable amount of Bitcoin from mining alone.
One major advantage of having a graphics card (or multiple graphics cards) is that you are not limited to just Bitcoin mining. There are a growing number of other cryptocurrencies that are far more suitable for CPU/GPU mining, such as Litecoin and Monero for example.
Hardware manufacturers have built circuit boards that are specifically designed for Bitcoin mining. These circuit boards are built around highly adaptable microchips that are custom-built for mining Bitcoin.
Due to the fact that these chips are custom-built for mining Bitcoin, their performance levels will be higher than your CPU or GPU. Remember that desktop CPUs and GPUs are originally designed as multipurpose devices.
ASIC Bitcoin devices are built from the ground-up to perform one function and one function only – to mine Bitcoins as fast as technically possible. If you are serious about mining Bitcoins, you’ll need to use these devices. These devices are expensive (but they are always in demand). In most cases, you’ll need to wait for your order to be fulfilled (as suppliers tend to run out of stock rather quickly).
Now before you hastily attempt to purchase an ASCI Bitcoin Mining device, you’ll need to calculate the viability of your possible purchase. Multiple factors need to be checked when it comes to Bitcoin mining, such as:
Insert these figures into our Bitcoin Mining Calculator to calculate your Bitcoin mining profitability.
Deciding on what hardware to use is one part of the puzzle. Once your hardware is set up, the next step is to install your software so you can connect to the Bitcoin Blockchain and begin mining Bitcoin.
Bitcoin Core allows you to download and synchronize with the entire Blockchain. Bitcoin Core’s initial synchronization will take time and it will also download a lot of data. You should make sure that you have enough bandwidth and storage space for the full blockchain size (over 200GB as of this writing). If you have a good Internet connection, you can help strengthen the network by keeping your PC running with Bitcoin Core and port 8333 open.
In other words, if you intend to go this route, it would be best for you to dedicate one computer for the sole purpose of cryptocurrency mining.
The Bitcoin mining software that you choose is entirely dependent on the operating system that you are currently using; Windows, Mac, Linux, etc. There are a variety of mining software platforms for any operating system of your choosing, but they all essentially perform the same function – instruct your hardware to do the complex calculations, passing through transaction blocks for it to solve.
Do a Google Search for “Bitcoin Mining Software (insert OS name here)”, download the software platforms, test them out and decide which one you will mine with.
So with all of that said, let’s go back to our original question …
The answer to that question is both YES and NO. It all depends on how much money you are willing to spend on hardware in order to be a competitive Bitcoin miner.
If you are willing to spend money on dedicated ASIC Bitcoin Mining devices, and you have already factored in the other variables (as stated above) then you will indeed be competitive in mining Bitcoin against other miners. However, if all you’ve got is your desktop (or laptop) computer, then mining other cryptocurrencies (that cater to CPU and GPU mining) would be a much better use of your hardware resources.
This does not mean that you are totally out of the race when it comes to mining Bitcoin. You might be able to push a boulder up a hill by yourself – but the boulder will move much faster if you’ve got other people to help you.
In an upcoming article, we’ll talk about the benefits of joining Bitcoin Mining Pools.