ASIC mining is essentially the process of mining cryptocurrencies like Bitcoin using ASIC rigs. An ASIC miner purposely made equipment for mining. Unlike other mining devices, ASICs can only be used for crypto mining and nothing else.
Mining is an activity required by a proof-of-work (PoW) blockchain to run its transactions. It involves doing complex calculations to solve a mathematical puzzle where miners compete to win block prizes.
Satoshi Nakamoto, the anonymous creator of Bitcoin, envisioned a scenario where the difficulty of Bitcoin mining increases when more mining devices are added to the network. With an increasing number of powerful mining devices, miners are encouraged to invest in ASIC hardware to give them the best chance of successfully mining a block.
Note that every ASIC device is designed to mine a specific coin (or rather a specific algorithm). For example, a Bitcoin ASIC miner can only mine BTC, while a Litecoin ASIC miner only interfaces with the LTC blockchain. This is because each digital currency has its own cryptographic hash algorithm that ASIC devices are meant to match. For example, Litecoin uses Scrypt while Bitcoin uses SHA-256.
Is Bitcoin Mining Profitable?
Yes, Bitcoin mining is profitable but a little more subtle. Things were simple in the early days. Standard CPUs handled BTC mining and the rewards were 50 BTC for each block that was successfully mined. Today, the cost of running a BTC miner is higher while the rewards (the amount of BTC) are lower, only 6.25 BTC after the 2020 Bitcoin halving with current block rewards. Moreover, mining Bitcoin with CPUs has not been profitable for a long time.
However, while block rewards were higher then, prices were also significantly lower than today. This makes ASIC mining not only a valuable endeavor, but also a reasonably profitable venture.
The tricky part is that you have to consider many metrics before you dive into space, the most affordable of which is the cost of electricity and the AntMiner price.
Antminer price is determined by its model and hash rate, which, among other things, is a measure of computing power. The higher the better, but also more expensive.
Later in this article, we will look at how to calculate the mining profitability of an ASIC, taking into account the hash rate, Antminer price, and cost of electricity.
ASIC Mining ASIC mining can cost more in terms of hardware than any other mining program, but it has some key benefits. For example:
1- Easy to install – Thanks to the special nature of extracting a single coin, they have plug-and-play capabilities.
2- High mining efficiency – ASICs have high computing power and efficiency compared to GPUs and CPUs.
3- Relatively high profits – With the power of an ASIC, you are almost certain to win and win prizes faster than almost any other type of hardware.
4- Low energy consumption – Thanks to mining innovations in recent years, these devices are designed to consume less energy compared to other mining models.
Bitcoin (BTC) Best Cryptocurrencies for ASIC Miners Top of the
list is Bitcoin, the leading cryptocurrency. The extraordinary price increase per coin in the last few years increases its profitability. Although the reward to miners is halved every four years, the price has increased consistently after a certain period of time with each halving, making it even more profitable and as a PoW powered platform, all mining rewards go to miners.
Use the latest or most powerful ASICs in the industry to generate as many BTCs as possible. Some of the best ASIC Bitcoin miners are AntMiner S9 with a hash rate of 13.5 tera hashes per second (TH / s) or Innosilicon Terminator 2-Turbo with a hash rate of 24 TH / s.
For those who want to mine something different – perhaps like a blockchain with lower mining difficulty than BTC – then LTC is a good bet. Although it is a PoW protocol, it differs from Bitcoin in terms of hashing algorithms as it uses LTC Scrypt. Therefore, unique ASIC needs Litecoin miners.
Miners that handle scrypt-based cryptocurrencies include AntMiner L3 ++ with a hash rate of 596 mega hashes per second (MG / s) or Innosilicon A4 + with 620 MG / s. In addition, Innosilicon A6 LTCMaster is a worthwhile investment, although it has a speed of 1.2 Giga hashes per second (GH / s) but comes at a higher cost.
Ethereum (ETH) Since the
The network has migrated to a proof-of-stake (PoS) system, you might think it’s probably not worth mining ETH. To some extent, you may be right. However, Ethereum still supports PoW and it is likely to do so for a certain period of time as Ethereum 2.0, the PoS upgrade, is a multi-year initiative.
Also, ASIC Ethereum miners are not as costly as Bitcoin’s. Therefore, you have a chance to make easy money from mining the second largest cryptocurrency which is less competitive. After all, the decreasing hash rate is ideal for new miners using ASIC devices.
Ethereum uses the Ethash hash algorithm. As such, the best ETH miners right now are AntMiner E3 running at 190 MH / s and InnoSilicon A10 ETHMaster with a power of up to 485 MH / s. 700 MH / s of the InnoSilicon A10 Pro places it among the most efficient ASIC ETH miners on the market.
How to Mine Bitcoin with an ASIC
Although ASICs have plug-and-play capabilities, it is a bit more complicated than buying and installing hardware. Since this is a business, things like profitable planning should come into play. Fortunately, you can use a Bitcoin mining profitability calculator to estimate the ROI margin before shopping for these ASICs.
A calculator takes into account key metrics such as the hash rate of your mining rig, current BTC price, rig’s power consumption and electricity costs. It will then show you the daily, monthly and yearly profitability.
CryptoCompare offers a reliable mining profitability calculator. Firstly, you can calculate your hash rate, power consumption, cost per KWh, pool charge, etc. You have to follow the steps below to find out. Then click here and enter your variables (see step 4).
With Bitmain’s AntMiner devices widely used in the market, it’s good to shop for a good ASIC Bitcoin miner with the same or higher computing power. However, if pre-used devices are the only ones in your range, make sure they are working properly before swiping that credit card.
Here are the steps to mine Bitcoin with an ASIC device:
1- Select an ASIC mining rig.
2- Choose your mining software.
3- Join a reputable mining pool.
You use a mining profitability calculator to make a profit.
4- Create a new Bitcoin wallet for your Bitcoin rewards or use what you already have. This can be a software or hardware wallet.
And you are done! The same steps can be applied to Litecoin, Ethereum, and other digital currencies.
The next section will discuss this in more detail.
Things to Consider Before Entering ASIC Mining Before getting
into ASIC mining, it’s best to think deeply about critical things like mining equipment, pools, and software.
Choosing an ASIC Mining
Rig Choosing the best rig depends on the device you prefer and your budget. For those who want to buy new machines, it is the best choice to go for the latest models. However, there are also pre-owned models in online marketplaces such as Amazon and eBay.
The right equipment depends on one’s needs. Some may want to use free space in their garages, while others may want to set up mini ASIC mining farms.
Whichever option you choose, there are important things to consider. For example:
1- Hardware – A rig consists of several ASIC devices connected to operate as a single unit. The things that need attention in hardware are calculation speed and electrical power consumption. Efficiency is also a critical consideration when choosing hardware. Less efficiency means more electricity costs than output and vice versa.
2- Motherboard – This is the backbone of the rig as it holds the hardware together. The choice of motherboard depends on the hardware you want to run on.
3- Power supply – Miners need power. How big or small the power supply depends on the number of devices operating. It also depends on whether or not you will overclock your miners, as doing so will consume more power.
4- Central Processing Unit (CPU) – The CPU coordinates different aspects of the equipment, including ASICs. Therefore, a sound processor is key to keeping the equipment running smoothly.
5- Frame – One frame holds everything together to form a compact system. A more robust frame means less repair costs. However, its size depends on the number of miners you want to add.
Choosing the Best Bitcoin Mining Pool
While it is possible to become a stand-alone Bitcoin miner, significant investments in mining devices may be required to find a new block in the BTC-backed blockchain. The next option is to join a mining pool where miners join the power of their rigs, direct them to Bitcoin, and share rewards for successfully mined blocks.
Unfortunately, their pool of charlatans is also doing naughty deeds. To avoid falling prey, consider the following mining pool variables:
1- Reputation – Some pools do not pay miners, others charge exorbitant fees. Reliability can be seen by analyzing other miners’ comments on different social platforms such as Reddit and Twitter. However, be careful when artificially offering positive compliments to the ear. Some players in the crypto industry are known to use sock puppets, namely fake online IDs used to fill in review scores.
2- Size – The size of a pool is a testament to its reliability, reliability and effectiveness. Therefore, a larger pool is often the better choice as it has a higher hash rate; hence, it is more likely to spawn a new block. As a result, participants of large pools receive frequent and consistent rewards.
3- Payment rules – How often does the pool transfer money to the miners? Is there a minimum payment? These factors are vital before deciding on a Bitcoin mining pool. If the minimum payout is high, a small miner may have to wait longer before receiving their rewards.
The payment rules determine the pool fees and payment methods. Payment methods include DGM (double geometric method), ESMPPS (Equalized Shared Maximum Pay Per Share) and CPPSRB (Limited Pay Per Share including Final Repayment).
4- Other factors – Other important factors to consider when choosing the best Bitcoin mining pool include latency, support/feedback, and uptime/efficiency.
Choosing the Right Mining Software
Mining software is a computer program specifically designed to connect mining hardware and pool. Choosing the wrong BTC mining software will result in you being unable to connect to a pool or the Bitcoin network itself.
The best software depends on the target operating system; it will also rely on your expertise. Popular Bitcoin-mining software includes MultiMiner (best for beginners), CGMiner (for advanced users) and BitMiner (for quick setup).
The software can be free or paid. Some paid versions are subscription-based, while others charge based on the hash power of your hardware.
Our Closing Thoughts
The quest to find the perfect answer to the question “what is ASIC mining” led us to select a mining rig, pool and software, among other details.
From the above discussion, it is clear that although ASIC Bitcoin mining is very profitable, there are factors to consider before diving in as it is also competitive. For example, if you don’t have the financial strength to build a huge rig set or a mini ASIC farm, joining a pool is better than mining alone.
For the best ASIC Bitcoin mining hardware, it’s all about your wallet size. If your credit card balance allows, going for high performance devices like Dragonmint T1 or Bitmain Antminer S19 Pro will provide higher profits.
However, keep in mind that with technology, things change very quickly. As Moore’s Law predicts, the ASIC miner you buy at great cost today might be an expensive paperweight long before you regain your return on investment, as newer, more powerful models are released every year.
Also, Bitcoin’s price is very important, and if the price drops enough, you will be mining with more losses. The 2018 crypto winter brought mining companies like Bitmain to their knees due to low Bitcoin prices, and a similar winter could potentially happen again.
Therefore, make sure you do the right research and consume all of your options before diving in. Good mining!