The Basics of ASIC Mining For Cryptocurrency
This is true even if you want to not lose money, especially in terms of major coins like Bitcoin.
You need to use ASIC hardware because it is the only hardware powerful enough to mine most of the major coins.
Meanwhile, you need to join a pool, because the average person won’t have enough hash power to mine a block on their own.
With that said, if you only want to mine cryptocurrency as a hobby (if you don’t mind losing money), you can start mining on any consumer CPU/GPU today (you still need to join a pool).
Not only do you need to use an ASIC rig (or equally high powered and efficient rig) to have a chance at profiting from mining, but you also need a new relatively new ASIC mining rig.
Thus, you should buy your rig at launch and/or at a reduced price if not (because they age quickly).
TIP: Another factor in mining is energy costs. In some regions the cost of energy is too high to reasonably make a profit from mining.
ASIC Mining Q&A
Let’s assume you understand all of the above and want to mine explore ASIC mining. From that frame there only a few things left to cover:
- What is ASIC? It is an “Application-specific integrated circuit.” It’s essentially a little computer built specifically for a limited set of processes. It’s “a system on a chip.” So with crypto, we are talking about a little computer built specifically for mining a certain coin or set of coins.
- What is ASIC mining? The gist is ASIC describes a type of chip that is ultra specialized in a single set of processes (in this case, mining cryptocurrency). An ASIC miner generally consists of an ASIC chip, power source, fan, and mining software.
- What ASIC mining rig should I use? The general consensus is Antminer rigs from Bitmain are a good choice, as are Innosilicon rigs. With that said, it can differ by coin and differ wildly over time! You might for example use a Spondoolies miner for Dash, Innosilicon for ETH, Bitmain for LTC, etc in winter of 2018… but then have to switch it up next season. Meanwhile, some coins even have their own miners! To be clear, Antminer is a brand, Bitmain and Innosilicon are companies, and ASIC is a generic term like CPU or GPU (it describes the processors used). IMPORTANT: The best miner for mining a specific coin changes all the time, make sure to research what the right miner and brand is in the here and now before buying!
- What does the term “mining rig” mean? It means at least a device like an Antminer, but potentially a whole rack (or racks) of fans, processors, ASIC miners, etc (like this).
- Can I build a custom ASIC miner? Building an ASIC miner is possible, but you need to not only deal with programing software (or cobbling together preprogrammed software) but putting together hardware as well.
- Can I mine any cryptocurrency with any ASIC? Certain rigs will be customized for certain coins. In simple terms, any miner that is built to mine Bitcoin can mine anything that uses the encryption the Bitcoin uses. In other words, any SHA256-based miner like Antminer can mine SHA-based currencies such as Litecoin and Bitcoin.
- What is a mining pool? Solo mining in this day and age is not a great idea unless you have a lot of power (or are mining an altcoin). A mining pool is a group you join and pay fees to. Everyone splits the take, minus fees. Mining companies tend to have their own pools, for example Bitmain has Antpool.
- Can I make money mining with an ASIC miner? Yes, you can, but it depends on the price of the coin you mine over time, the cost of the hardware, cost of electricity, and other such factors.
- How do I know how much money I can make from ASIC mining? You want to figure out the “hash power” (hash rate) of the miner for a specific cryptocurrency and then compute that against electricity costs. See Bitcoin Mining Calculator.