Mining is a complex process that involves solving mathematical puzzles to validate transactions or to mine new blocks of currency. Bitcoin is one of the most popular cryptocurrencies in the market that can be mined and stored securely in a Bitcoin wallet.
The main component of Bitcoin mining hardware includes Application-Specific Integrated Circuits (ASICs) or Graphics Processing Units (GPUs/Graphics Card). If you want to build a mining rig, the hardware costs can be quite daunting. There is also the additional cost of energy consumption that adds up.
There is also the risk of the cryptocurrency losing its value as it’s quite volatile. There is no guarantee that you will make money to compensate for the hardware.
Except for the GPU, other parts of the mining system need not be top-notch. It can contain a mediocre CPU, regular motherboard, and a DRAM (Dynamic random-access memory). You might even find these components lying around in your old gaming PC.
What are the Minimum System Requirements for Bitcoin Mining?
Let’s have a look at the minimum system requirements for Bitcoin mining.
|Motherboard||Asus B250 Mining Expert|
|CPU||Intel Celeron/Pentium/Ivy Bridge|
|Graphics Card||Nvidia GTX 1070 / AMD Vega 56|
|Power Supply||Corsair HX1200i / EVGA SuperNOVA 1600|
|RAM and Storage||Newegg Patriot Memory 4GB DDR|
What is Bitcoin Mining?
Fiat currencies are printed by the government, whereas Bitcoin allows users to mine new coins and earn rewards for it.
Anyone can mine Bitcoin with the use of specific hardware, and they will earn a fixed reward (6.25 BTC currently) for every block mined. However, the rewards are halved approximately every four years or after 210,000 blocks are mined.
Mining not only creates new blocks of Bitcoin, but it also helps verify transactions on the network. Every 1MB block of transaction verified provides rewards to the miners.
One block of Bitcoin contains hashes that store hashes of previous blocks and its transaction details. A hash is a fixed length of random digits containing numbers and alphabets. Every hash is unique, and no one can predict the data it contains just by looking at it.
In some cases, even though a miner verified a block of transactions, they may not receive any reward for it. How mining works is that, if you verify a block of transactions, you need to be the first miner to do it to receive any reward for it. This is how proof-of-work is implemented.
Bitcoin mining has become more difficult and complex over the years. It started with a difficulty number 1, and now the difficulty is in trillions.
Bitcoin mining has kept the bitcoin network up and running for all these years. With the rewards being halved and difficulty level rising, there aren’t many individual miners like before.
Check this post to know more about Bitcoin mining and CPU mining.
What do you Need to Become a Bitcoin Miner?
To become a Bitcoin miner, you need a mining system. You can purchase a pre-built rig. However, they may cost more than a custom assembled mining rig.
The whole mining system can be quite noisy, build up a lot of heat, and needs to operate 24/7. A Bitcoin mining operation is quite an extreme environment to be working in.
An open-air frame is necessary for the ventilation for the GPU. You need to ensure that your GPU can breathe. You need to replace burned-out cards, clear the dust and perform various other maintenance so that your components stay in working condition.
Building your mining rig is no different from building a gaming pc. If you build it yourself, you may know how to maintain and service the hardware in case anything goes wrong. If you do not have the time to build one, you can always go for a pre-build.
The pre-built mining rigs may come with a maximum of 2 GPUs, whereas custom-built rigs can contain many more GPUs than that. A new or used mining rig costs a couple of thousand dollars. Buying a used mining rig would give you a GPU that has been worn out already and has a minimal lifespan on it.
The rig requires just a basic Windows OS and some mining software, to begin with. Once you have selected the casing for your mining rig, you can start looking for the motherboard. You don’t need a top of the line motherboard for your mining rig. The main goal is that it should be able to accommodate the maximum number of GPUs.
These MOBOs should also be customisable. You check out the motherboards made by Asus, MSI or Gigabyte.
Once you have found these components it’s time to select the CPU. You will require a modern multi-core CPU with 4-8 GB of RAM. You don’t have to overclock the CPU just to bring out more performance by compromising stability. The basic Intel CPUs such as Celeron or Pentium will suffice.
People often purchase AMD or Nvidia GPUs for mining individual or participating in a mining pool. You may also find good deals for six-packs or even older models, which will still get the job done, even when contributing to mining pools.
For a mining rig, you need at least a 1000W power supply and a strong internet connection. You need a gold rated mining power supply as these mining systems run at high loads 24/7. This can vastly increase the electricity bill! For a bigger mining system you can couple two power supplies.
After all the expensive GPUs and high wattage power supplies, you can save some dollars when it comes to storage and RAM. An 8GB RAM is recommended for a PC running Windows operating system; however, you can do with a 4GB as well. Just remember if you have low power rates, or spare parts lying around, you can easily set up a mining system for a little or no additional cost without breaking your bank account.
You may take longer to break even for the mining setup, thanks to the Bitcoin market’s volatility. If you ever do begin mining, our advice is not to invest more than you can afford to lose. Also, do not even think about breaking even in just a couple of months.
You also need to keep in mind the difficulty of mining a block of Bitcoin in today’s world. If nothing goes wrong, you may start making a profit after 7-8 months. If you have some hardware lying around, you can give it a try!