Bitcoin Mining Hardware – Is it worth it?

/Bitcoin Mining Hardware – Is it worth it?

Bitcoin Mining Hardware – Is it worth it? 2018-04-05T14:31:01+00:00
Bitcoin Mining Hardware – Is it worth it?

Quick inner navigation:

  1. What is bitcoin mining hardware?
  2. Best bitcoin mining hardware
  3. How to use bitcoin mining hardware?
  4. How does bitcoin mining hardware work?
  5. Mine bitcoin without hardware

To put it simply, mining is the “creation” of bitcoins and a process of doing mathematical calculations (in some cases with computer hardware) through which transactions are verified and added to blockchain (public ledger). The more miners solve the mathematical algorithms, the more difficult the equations become. This idea is often referred to as mining difficulty, and for instance, it may be decided by the number of miners. The higher number of people solving an equation the faster it’s solved, therefore the difficulty increases as well. In this article, we will learn more about what’s bitcoin mining hardware, how it works, how to use it and more.

What is bitcoin mining hardware?

A bitcoin mining hardware is a tool/equipment, which mines blocks, by doing necessary mathematical calculations. It adds transaction records to the blockchain by creating bitcoin. The newly realized bitcoins are the incentive for bitcoin mining.

Anyone who has an access to the internet and a reliable hardware can mine bitcoins. To avoid confusing you and to make sure that everything makes sense, here are some phrases/terms that you’ll often come across while studying bitcoin mining.

Block reward: it’s the number of bitcoins received from mining a new block. It’s halved with every 210,000 blocks.

Hash rate: is measurement to see how powerful a machine is for mining bitcoin.  The higher hash rate the better, as it increases the opportunity of getting to the next block and receiving the reward – the cryptocurrency.

Hash Function: is a complex mathematical function.

ASIC: stands for Application – Specified Integrated Circuit, and is a microchip customized for a special application, for instance, a certain type of transmission protocol. Learn more about ASIC miners.

AntMiner: A brand name for ASIC. Read more about Antminer here.

How did bitcoin hardware mining start?

The first bitcoin mining hardware was introduced in 2009. Initially, miners used CPU (Central Processing Unit) hardware to mine, however, since then the hardware mining has improved in terms of speed and the process is much smoother for the host computer. A relatively new type of mining hardware for computer graphics card is GPU (Graphical Processing Unit). It’s able to hash data up to 100 times quicker then CPU. It also uses a lot less electricity than CPU.

The development and improvements of cryptocurrency mining hardware are getting better day by day and the performance standards keep increasing along with it.

GPU was followed by FPGA (Field – Programmable Gate Array), which let the mining farms come to reality. It’s more efficient and uses less electricity than CPU and GPU. The modern and the most recent hardware is ASIC, which is even faster, more efficient and saves a lot of electricity compared to its “ancestors”.

How does bitcoin mining hardware work?

Interestingly enough, bitcoin mining with hardware and gold mining have some things in common. Both are costly, dig and try to get the finite precious and get huge profits. To be more precise the process that takes place with the bitcoin mining hardware is the following.

1. The hardware takes input data represented in 1s and 0s

  • The input data can be the validly signed transaction data accumulated and listed in the peer-to-peer network since the past 10 minutes and a reference to the previous block of the blockchain (this is how all the blocks are chained to each other).
  • A hardware hashes random numbers. Each time the data runs, some of the numbers are changed to get different output.

2. Cuts and pastes the data into the hash function.

3. What comes out of is a unique 64 character string (with letters and numbers perfectly correlating with the input data).

  • The same input applied to a certain hash function always results in the same output.
  • The length of the input data doesn’t change the length of the 64 character string – it’s always the same.

4. Through this process, the “winners” are selected randomly.

How to use bitcoin mining hardware?

The main bitcoin mining hardware types are CPU, GPU, FPGA, and ASIC. Now let’s see how to use each of these in a more detailed sense and at the same time do a bitcoin mining hardware comparison.

CPU/GPU

As mentioned above these are some of the first types of bitcoin mining hardware. You can use your computer (as it has CPU) to mine bitcoin, however, it will be very slow and inefficient compared to the more developed types of mining hardware.

To increase the efficiency of your PC and the hash rate you may install GPU, which is able to solve complex mathematical equations for transaction blocks.

It’ll be much more productive than your initial PC with its CPU, but due to an increased level of mining difficulty, even with GPU mining will be inefficient. The vendors of GPU are ATI and Nvidia. Some cards can be around $100 and be more productive then CPU by almost 80 times more MH/sec.

FPGA

FPGA is somehow unique as it can be configured. Therefore, it’s optimal to buy the chips in bulk, then adjust for bitcoin hardware mining and only then put back on the equipment.

They are the fastest when it comes to hash rates as they operate at 750 mega hashes/second. It’s also important to note that you can put more than one chip in a box.

As you can see, FPGA is much more improved and efficient in comparison to CPU and GPU.

ASIC

This type of hardware is created solely for bitcoin mining with an impressive speed (around 5-500 gigahashes/second) and relatively low consumption of electricity.

To use the ASIC bitcoin mining hardware, you’ll need mining software. However, the newest versions come with bitcoin addresses and don’t require any effort to set up.

Others can work for computers using relatively less electricity and are used for powering an ASIC miner connected with USB.

Best bitcoin mining hardware

Because of the mining difficulty level and competition, nowadays some of the bitcoin mining hardware isn’t powerful enough to mine bitcoin (e.g. CPU, GPU). If you want to do hardware mining then you need to get a better hardware, for instance, ASIC or FPGA. A number of people often refers to AntMiner S9 as the best bitcoin mining hardware. Let’s see why is it considered the best trough cost and benefit analyses, and through encountering some technical advantages it ensures to its users. Bitcoin mining hardware for sale:

AntMiner S9

AntMiner S9 is over two times more efficient than AntMiner S7. The hardware is also very efficient when it comes to electricity use. It can be rather profitable as it yields 0.3 BTC per month.The temperature should be 250C or lower.

AntMiner S9 (around $5,500 – $6000)

  • Hash rate 5TH/s ±5% (assumption for further calculations – $0.1/kWh)
  • Power Consumption: 1323W ±10%
  • Built-in web management portal, therefore no separate host computer or software required
  • Most Power Efficient Bitcoin Miner: 0.098 J/GH ±7%
  • Power supply sold separately – AntMiner APW3++ power supply recommended if you have 220v+. EVGA SuperNova 1600 G2 recommended if you only have 110-120v power.

With current difficulty level and monthly price increase, you will get the following numbers:

1st year – 0.636 BTC, $6,996.24

2nd year – 0.636 BTC, $7,174

If we assume the difficulty increase is 15% and the price increase is 10% per month then:

1st year – 0.33 BTC, $5,447

2nd year – 0.062 BTC, $2,723

If we assume the difficulty increase is 40% and the price increase is 8% per month then:

1st year – 0.182 BTC, $1,890

2nd year – 0.0032 BTC, $0

Pros

  • Very high hash rate: 14TH/s
  • Very efficient

Cons

  • 4 times more expensive then AntMiner S7 and 8 times more than AntMiner S5
  • Power supply usually has to be purchased separately

AntMiner S7

AntMiner S7 losses 7% of electricity supplied. The profitability keeps decreasing as the mining difficulty increases, however, it’s more efficient then AntMiner S5. Solo mining with AntMiner S7 is doable but not cost effective. Comes with good fans, but the temperature should be 400C or lower.

Pros

  • High hash rate. 4.73 TH/s
  • Efficient
  • Comes with good guide
  • Comes with all necessary part

Cons

  • High power consumption
  • Noisy (62dB) but not as noisy as AntMiner S5

AntMiner S5

Solo mining with AntMiner S5 isn’t efficient and profitable you need to join a mining pool. For safety, the temperature has to be below 800C but to avoid fast depreciation temperature has to be below 600C.

Pros

  • Low price
  • Relatively low power demand
  • Good for beginners to learn more about the process

Cons

  • Low hash rate. Hash Rate – 1,155 GH/s
  • Noisy

 Avalon 6

Avalon can mine 0.13 BTC per month with the current level of mining difficulty. However, Avalon 6 will be more profitable if you use the hardware to mine with mining pools. The operation has to be below 350C.

Pros

  • Not as noisy as AntMiner S5 or S7 – 55dB
  • Has good power supply
  • Efficient use of electricity

Cons

  • Lower hash rate compared to AntMiner S7 or AntMiner S9: 3.5 TH/s
  • Price is relatively high compared to the hash rate

SP 20 Jackson

SP290 Jackson bitcoin mining hardware may be not profitable enough. Even though it is much cheaper than other bitcoin mining hardware, it is way less efficient. The temperature should be lower than 350C.

Pros

  • Cheap compared to other hardware
  • Relatively low electricity consumption

Cons

  • Poor thermal dynamic
  • Loud (around 80dB)
  • Hash rate is 1.7 TH/s only if it’s cool enough. Average is: 1.3-1.7 TH/s

AntMiner R4

AntMinerR4, from the point of view of profitability, is very productive. It normally uses 845 Watts of electricity. The optimal temperature is 350C or lower.

Pros

  • Good hash rate. 8.7 TH/s
  • Doesn’t require separate host computer
  • Relatively quiet 52 dB
  • Convenient for home mining

Cons

  • Doesn’t come with power supply
  • No control over hash rate

Mine bitcoin without hardware

“How to mine bitcoin without hardware?” To clarify the confusing answer to this question, here’s what you need to know. As mentioned above the vast majority of computers come with CPU and you can install GPU, so technically you can mine bitcoin without buying a separate equipment to start mining.

However, this isn’t efficient at all due to low hash rates, current mining difficulty, and electricity use. If you still want to mine bitcoin without purchasing additional hardware then you need to check out cloud mining, or pool mining.

Cloud mining >>

Thanks to cloud mining, you can get a contract and earn bitcoins without dealing with the offline technical processes. By investing in cloud mining you pay host companies, which own bitcoin hardware and rent out the hardware. The rewards you receive depend on the hash power you rent.

Pros

  • No investment for equipment is needed
  • No electricity costs
  • No inconveniences (e.g. noise, heat etc.)

Cons

  • Many scam websites
  • Lower profits

Pool Mining >>

Mining pools are networks of people who want to collaborate while mining a block and even split the profit with one another according to the amount of contributed hash rates. Before joining a pool, you have to have a bitcoin wallet in order to store your bitcoins. Then carefully pick a pool you want to join. You should pay a lot of attention to reputation before joining a mining pool. The ones with a good reputation will provide stability and progress.

Pros

  • Steady profits
  • Fees and costs are much lower than in case of hardware mining (in short run)
  • Frequent payouts

Cons

  • In long run may be more costly than hardware mining due to economies of scale
  • Small payouts

Summary

Thanks to bitcoin mining, we get to enjoy the privileges of the cryptocurrency. If you want to join the team of bitcoin creators, there’re a number of ways of doing it. We hope this article has given you a better idea about bitcoin mining. Thank you and you’re welcome to check our other articles to learn more about cryptocurrencies.

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