Mining cryptocurrency may seem like an easy way to make a quick crypto — here, we explain the intricacies of ASIC mining.
For the original class of Bitcoin miners, ASIC miner machines quickly became a curse word as it gave companies and individuals with deeper pockets an insurmountable advantage when it came to mining BTC. As time progressed, it soon became clear that there was no way for even the best gaming rig to compete with a dedicated ASIC device that’s geared for one purpose and one purpose only — mining as much crypto as possible.
Join us in showcasing the cryptocurrency revolution, one newsletter at a time. Subscribe now to get daily news and market updates right to your inbox, along with our millions of other subscribers (that’s right, millions love us!) — what are you waiting for?
ASIC Mining Companies
ASIC devices came to prominence through a Chinese company called Bitmain. Notably, Bitmain dominates ASIC Bitcoin mining activities through its Antminer product range.
ASIC Mining Explained
Is Bitcoin Mining Profitable?
However, while the block rewards were higher back then, the prices were also substantially lower compared to today. This makes ASIC mining not only a worthwhile endeavor, but also a reasonably profitable venture.
The tricky bit is that you have to consider so many metrics before diving into the space, the most pertinent of which are electricity cost and the Antminer price.
What is an Antminer?
Antminers are ASIC mining hardware that was launched by Bitmain. The series was launched in 2013 specifically for mining cryptocurrencies, and has since become a household name in the bitcoin and blockchain mining industry. Starting from the S1 series, Antminer has grew and evolved alongside the blockchain mining industry, providing enhanced hash rates and power efficiency. Currently, the latest series is the S19, S19 pro and T19.
The Antminer price is determined by, among other things, its model and hash rate, which is a measure of its computing power. The higher the better, but also the more expensive.
Later in this article, we’ll look at how to calculate an ASIC's mining profitability by factoring in the hash rate, Antminer price and electricity cost.
Advantages of ASIC Mining
ASIC mining may be more costly than all other mining schemes in terms of hardware, but it has some key benefits. For example:
- Easy to set up — Thanks to their specialized nature of mining a single coin, they have plug and mine capabilities.
- High mining efficiency – ASICs have high computation powers and efficiency compared to GPUs and CPUs.
- Relatively high profits – With an ASIC's power, you are almost assured of getting a bulls’ eye and earning rewards faster than with any other type of hardware.
- Low energy consumption – Thanks to mining innovations in recent years, these devices have been designed to consume less energy relative to their computing power, compared to other mining models.
Top Cryptocurrencies for ASIC Miners
Best Bitcoin Mining Rig
Best Litecoin Mining Rig
Miners that handle the Scrypt-based cryptocurrencies include the most popular Antminer L3++ with a hash rate of 596 MG/s (mega hashes per second) or the Innosilicon A4+ with 620 MG/s. In addition, the Innosilicon A6 LTCMaster, with a speed of up to 1.2 Giga hashes per second (GH/s) is a worthwhile investment, although it may come at a higher cost.
Besides, ASIC Ethereum miners are not as costly as Bitcoin's. Therefore, you have a chance to make easy money from mining the less competitive second-largest cryptocurrency. After all, its decreasing hash rate is ideal for new miners using ASIC devices.
Best Ethereum Mining Rig
How to Mine Bitcoin/Litecoin/Ethereum With an ASIC
Let's take Bitcoin for example. Although ASICs have plug-and-mine capabilities, it's a bit more complicated than simply purchasing hardware and plugging it in. Since it is a business, things like planning for profitably must come into play. Luckily, you can use a Bitcoin mining profitability calculator to estimate the ROI margin before you even step out to shop for those ASICs.
With Bitmain's Antminer devices widely used in the market, it's good to shop around for a good ASIC Bitcoin miner with the same or even higher computational power. However, if pre-used devices are the only ones within your range, ensure that they're working correctly before swiping that credit card.
Here are the steps to mine Bitcoin with an ASIC device:
- Choose an ASIC mining rig.
- Choose your mining software.
- Join a reputable mining pool.
- Use a mining profitability calculator to ensure that you’ll profit.
- Create a new Bitcoin wallet for your Bitcoin rewards or use what you already have. This can either be a software or hardware wallet.
And you’re done! The same steps can be applied in mining Litecoin, Ethereum and other digital currencies.
The next section will elaborate this further.
Things to Consider Before Venturing into ASIC Mining
Before venturing into ASIC mining, it's best to deeply consider critical things like the mining rig, pool and software.
Choosing an ASIC Mining Rig
Choosing the best rig boils down to your preferred device and your budget. For those looking to buy new machines, going for the latest models is the best choice. However, there are also pre-owned models on online marketplaces such as Amazon and eBay.
The right equipment depends on one's needs. Some will want to utilize spare space in their garage, while others may be looking to build mini ASIC mining farms.
Whichever the option, there are essential things to consider. For example:
- Hardware – A rig comprises several ASIC devices connected to work as a single unit. Things to look out for in hardware are computational speed and electrical power consumption. Efficiency is also a critical aspect when choosing the hardware. Less efficiency means more electricity costs relative to output, and vice versa.
- Motherboard – This is the backbone of the rig because it holds the hardware together. The choice of a motherboard depends on the hardware you want to run on it.
- Power supply – Miners need power. How big or small the power supply is relies on the number of powered devices. It also depends on whether you'll be overclocking your miners, since doing so consumes more power.
- Central Processing Unit (CPU) – The CPU coordinates different aspects of the rig, including the ASICs. Therefore, a sound processor is key to ensuring the rig's smooth running.
- Frame – A frame holds everything together to make a compact system. A more robust frame means fewer repair costs. However, its size depends on the number of miners you wish to add.
Choosing the Best Bitcoin Mining Pool
Unfortunately, quack pools are also conducting mischievous businesses. To avoid falling prey, consider the following mining pool variables:
- Reputation – Some pools don't pay miners, while others charge exorbitant rates. The trustworthiness can be seen by analyzing other miners' comments on different social platforms like Reddit and Twitter. However, be cautious of artificially sounding positive praises. Some players in the crypto industry are known to employ sock puppets, i.e. false online identities used to pad review scores.
- Size – A pool's size is a testament to its reliability, trustworthiness, and influence. Therefore, a bigger pool is oftentimes a better choice since it has a higher hash rate; hence, it has a higher likelihood of uncovering a new block. Consequently, participants of large pools get frequent and consistent rewards.
- Payment rules – How often does the pool release funds to miners? Is there a minimum payout? These factors are vital before settling on a Bitcoin mining pool. If the minimum payouts are high, a small miner may need to wait longer before getting their rewards.Payment rules dictate pool fees and payout methods. Payout methods include DGM (double geometric method), ESMPPS (Equalized Shared Maximum Pay Per Share) and CPPSRB (Capped Pay Per Share including Recent Backpay).
- Other factors – Other crucial factors to consider when choosing the best Bitcoin mining pool include latency, support/feedback and uptime/efficiency.
Choosing the Right Mining Software
A mining software is a computer program specially designed to connect the mining hardware and pool. Choosing the wrong BTC mining software will render you unable to connect to a pool or the Bitcoin network itself.
The software can either be free or paid. Some paid versions are subscription-based, while others charge according to your rig’s hash power.
Should You Invest in Mining Hardware To Mine Cryptocurrencies?
Our quest to find the perfect answer to "what is ASIC mining" has taken us through choosing a mining rig, pool and software, among other details.
From the above discussion, it's evident that despite the fact that ASIC Bitcoin mining is very profitable, there are factors to consider before diving in, since it is also competitive. For example, joining a pool is better than solo mining if you lack the financial muscle to build a massive rig set or a mini ASIC farm.
For the best ASIC Bitcoin mining hardware, it's about your wallet size. If your credit card balance allows, going for high performing devices such as the Dragonmint T1 or the Bitmain Antminer S19 Pro will give higher profits.
Also, the price of Bitcoin is also very important, and if the price drops low enough, you’ll be mining at a further loss. The 2018 crypto winter brought mining companies like Bitmain to its knees due to low Bitcoin prices, and another similar winter could potentially happen again.
Therefore, make sure to do proper research and exhaust all your options before diving in. Happy mining!