The modern world has seen the emergence of cryptocurrency. Mining of cryptocurrency happens to be one of the most important topics for 2018. This is contributed by the fact that the important cryptocurrencies have skyrocket prices and attracting very big profits. The mining business is proving to be very productive and many are very willing to venture into it, the only challenge is that they lack the knowledge. Cryptocurrency mining is not an easy task and will need one to have ample technical knowledge before picking the correct mining equipment. Some of the cryptocurrencies that are available in the market are bitcoins, Zcash, ethereum etc.
When mining cryptocurrencies, there are several mining tools you can use. We look at GPU as a cryptocurrency mining tool. In this article, we take you through some of the basic important facts about using the GPU as a cryptocurrency mining tool.
What does GPU mine?
When looking for the best GPU to use in cryptocurrency mining, you will realize that they are created differently. You will find some models that are able to mine certain coins/algorithms in a much more efficient way than other models. That’s why knowing what kind of cryptocurrency you want to mine is very important. This will give you a clearer guide to what GPU is best for your cryptocurrency mining. Currently, many people are mining Ethereum because it’s the most profitable cryptocurrency to mine.
So why is GPU better to use than the ASIC miners? The GPU miners have the ability to mine any type of algorithm, however, some are better at mining particular coins than others. Many people who are into mining cryptocurrencies (not only bitcoin) are slowly moving to using the GPU and soon future coins will be utilizing the Proof of Work technical model in mining.
Bitcoin users also have the option of using multi-mining platforms and pools like the NiceHash. These platforms have the ability to pull the GPU Hashing Power, then automatically switch to mining the coin that is most profitable. We give you the best recommendation when looking for a reliable GPU for your cryptocurrency mining.
The Electrical Costs
Many cryptocurrency users when mining tend to focus more on the amount of coin they are mining for a given time span. When you allow your GPU hardware to run for 24/7 it consumes a lot of power. When doing your total cost calculations, it’s good to input the electrical costs that you are using, or else you will be actually losing money. Losing money occurs when you realize that your utility costs at the end of the month are higher than the total amount of coins you have mined. Since the power costs tend to fluctuate frequently, so some people will find it more affordable to use GPU miners while others should totally avoid using the GPU in mining cryptocurrencies. Check your electricity expenses on your monthly utility bills or you can call your electricity company. Before mining it’s good to take into consideration an energy reseller alternative that is available in your arrear. Many parts you will find that the electricity costs are fairly negotiable. While most states in the U.S offer deregulated energy which can be purchased at a discounted rate from a reseller. Remember to include the hash rates and power costs into your calculation when determining the profitability of your GPU mining.
The ROI & the Profitability of the GPU
There are two crucial factors that you have to take into consideration when considering cryptocurrency mining. ROI (return on investment) and the profitability of your mining operation. When doing these calculations be conservative since as the GPU mining rig gets less profitable with time, so does the GPU mining difficulty increase. Calculating the ROI of your GPU is very simple. The GPUs that are used in cryptocurrency are great for gaming and extremely powerful. The resale value of these cards is very high and there is a ready market for them. After using them for 12 to 24 months you can opt to conservatively resell your cards and get about 20 to 50% of their value in the market. This will help you in dealing with mining difficulty increasing and hence claiming your ROI.
When looking at the profitability, then you have two angels to look at: number of coins you are mining and the market/interest growth of your coin. You already know what you want to mine, and definitely, you want to mine as much as possible. However, all these hard work can go to waste if you don’t take into serious consideration the long term value and growth of the cryptocurrency you are mining. Some mining pools have the option of paying out in Bitcoin. This will be more helpful to the individual who is planning on investing their profits.
Be intelligent on the frequency and schedule of your mining payouts. This is because you might be charged fees for each payout or charges for payout within a given threshold. In order to avoid your profits being reduced its best to reduce and avoid these transaction fees. Take your time to read the guidelines on the payouts that are provided by your mining pool. Then you can come up with a schedule wither weekly or monthly on when to get your payouts. The fewer times you take your payouts the more profits you stand to gain.
Cryptocurrency is solely dependent on the uptime. The uptime refers to the duration when the GPU is not mining. Many of us want our GPU running for 24/7 so that we can collect as many coins as possible. When the mining rig is not online then it means you are losing coins, which in turn adds up to low profitability. This means you will have to build a redundancy into the design while at the same time investing in materials, having a plan of action for repairing your rigs should any of them fail. Since you want your machine to operate 24/7 there are some possible operation failures that you should be prepared to deal with. These failures include.
- The GPU failure: to deal with this, make sure you get a reliable warranty that clearly states the necessary steps to follow when your GPU fails.
- The Motherboard failure: to avoid losing mining time have a backup motherboard that has been fully tested, another trick would be to use two motherboards in your mining.
- The Peripheral failure: since they are inexpensive the best option would be to have a backup plan and have a spare for each peripheral you are using.
- The OS corruption: this is a common scenario, having a backup or cloning your OS will help you to deal with possible OS corruption. Make sure you have recorded the settings of your GPU/hardware and software for an easy restoring process in future.
- Internet & Power outages: no power or internet connections mean no mining is taking place and that you are not making any profits. Have a backup supply of internet and electricity that automatically kicks in when a power or internet outage occurs.
Monitoring & Alerts
Once you have a built-in redundancy, then you should have a damage control strategy. This strategy is also known as the disaster recovery plan. These two precautions help in ensuring that your mining process is not interrupted at any given time with any technical failure. However, all these precautions and plans might not be useful if you don’t take note that the mining rig of your GPU is down. Set up text and email alerts that will notify you anytime the rig is going down or not mining. Most of the mining pools have been designed with an inbuilt function that allows you to configure it to send alerts to your phone and email address whenever the mining process is interrupted. You can use hardware that is capable of detecting outages to get alerts.
How do you plan to scale the whole mining operation? This is an important aspect of your mining rig plans. You can scale the buildup more easily by enhancing the infrastructure of the rig you are using in modular ways. Make sure the rig you create is stackable for future implementation. The bottom shelf should be designed to have maximum airflow and clearance. Check if you have ample space that will allow you to expand your operation physically. The network infrastructure, cable lengths, ideal cooling environment. These are just some of the basic factors that should be considered when purchasing, building out and implementing any rig.
GPU mining is a profitable endeavor. It’s also a project that can be enjoyable. Learning how the Proof of Work operates and the cryptocurrencies is not rocket science. Understanding your area and the energy costs of your area will be helpful in determining if your GPU cryptocurrency mining is profitable. Never ignore redundancy in the GPU mining rig, and lowering the downtime will reduce any losses you might incur when the hardware fails. If there are any free resources at your disposable that can enhance the performance of your GPU, don’t shy away from using them. Get more information from the online community of cryptocurrency users.