The growth and popularity of Bitcoin (BTC) has reached such heights over the last decade that it has given birth to a whole mining industry.
Thousands of individuals and companies compete to produce the next Bitcoin block in return for block rewards.
The industry has become so competitive that individuals must consider whether Bitcoin mining at home is worth the high energy and hardware expenses.
Is mining Bitcoin profitable? Let’s find out.
Understanding Bitcoin Mining Bitcoin mining is a fundamental part of the Bitcoin protocol. It is the process that keeps the network ticking.
Not only do Bitcoin miners process transactions, but they also prevent fraudulent activities and double-spending of coins. The Bitcoin protocol can not function with its miners.
Bitcoin mining is the process of proposing and creating new blocks on the Bitcoin blockchain, for which miners are rewarded with newly minted BTC. The primary function of Bitcoin mining is to prevent bad actors from defrauding the network and its participants.
Bitcoin mining comes in two forms: solo mining and pooled mining.
Solo mining refers to a single entity (individual or company) attempting to generate new blocks on their own and keeping block rewards for themself, e.g., by mining Bitcoins at home. Pooled mining refers to several miners (individuals or companies) coming together to produce blocks more frequently. The pool members share the proceeds according to the hashing power contributed.
Bitcoin miners protect the network by solving cryptographic puzzles that prove the validity of the transactions in the block.
The first miner to solve the puzzle wins the chance to propose and create the next block of the Bitcoin blockchain.
If all the other miners and nodes come to a consensus regarding the proposed block’s validity, a new block is added to the blockchain. The miner receives newly-minted BTC in return for their effort.
Creating the block is not the only way Bitcoin miners earn BTC. Miners also receive gas fees for processing transactions.
How to Mine Bitcoin at Home? Gone are times when you could run a profitable mining operation from your laptop. The Bitcoin mining industry has become hyper-competitive, mainly resulting from technological advancements in mining hardware.
Here is what you need to mine Bitcoin at home (competitively):
Mining Rigs A mining rig is a computer custom-built to mine cryptocurrencies. A rig consists of multiple components and chips. Different types of mining rigs are categorized according to the type of chips they use.
CPU (Central Processing Unit) The chip that powers your laptop. Although it is technically possible to attempt mining Bitcoins with your PC, CPU chips are not optimized to serve as Bitcoin mining gear. Mining Bitcoins with your PC may not be profitable.
GPU (Graphics Processing Units) A GPU mining rig is the upgrade to the CPU rig. It can be a regular computer that is loaded with several GPU chips.
Although GPU rigs increased mining efficiency significantly compared to CPU rigs, they are not explicitly created for crypto mining. GPU chips are designed for gaming and video rendering.
FPGA (Field-Programmable Gate Array) FPGAs are integrated circuits that are best known for their programmability. Users can reconfigure the hardware to mine a specific coin based on the cryptocurrency’s network’s cryptographic hash algorithm.
ASIC (Application-Specific Integrated Circuit) ASIC mining rigs are the top-performing Bitcoin mining hardware in the market today. These rigs are customized and built only to mine cryptocurrencies. Therefore, they outperform other chips in performance and energy efficiency.
Software Today, most ASIC mining rigs come with pre-installed mining software. If a miner wants to use different mining software, they can download them online. Some examples of Bitcoin miner software are ASICSeer, CGMiner, and MultiMiner.
A few other resources are required:
Energy source Internet connection Cooling infrastructure A computer to monitor operations, join mining pools, analyze the market Setting Up Your Mining Operation After selecting the proper mining hardware and software that suits your needs, expectations, and expenses, you will need to set up your mining rig correctly.
Placement: The Bitcoin mining rig needs to be placed in a spacious room to be accessible when repairs are needed. Cable and Electricity Management: You will need to ensure that your mining rig is connected to a reliable source of electricity. You may need to set up a backup power source to keep operations running. It is also important to use good-quality cables, wiring, and circuit breakers to protect your hardware. Internet: Professional miners prefer using ethernet and LAN cables when connecting their rigs to the Internet as they are more reliable than WiFi connections. Connecting a Wallet: If you want to start mining BTC at home, you will need a crypto wallet where Bitcoin rewards can be sent. Joining a Mining Pool Joining a mining pool is considered a reliable way to mine Bitcoin at home. A mining pool can result in a steady Bitcoin payout from mining operations.
Bitcoin Mining Pools Explained A mining pool groups together mining resources and distributes block and transaction rewards to contributing miners based on their share of work.
There are numerous mining pool options available to miners. Notable names include F2Pool, AntPool, and Binance Pool. A miner will need to apply to join a mining pool.
The mining pools will differ according to their hash rate, fee structure, and payout structure. A mining pool may even allow miners to mine different types of cryptocurrencies.
User payout typically depends on the hash rate provided by the miner. Profit from operations will differ from one miner to another based on their hardware expenses and operational costs.
Other factors, such as Bitcoin prices, pool fees, mining difficulty, and payout schemes, will also affect miner profits.
However, there is another tool through which investors can start earning Bitcoin mining rewards single-handedly. ECOS, a global investment ecosystem, offers BTC earning opportunities by providing mining rigs and cloud mining operations.
After launching in 2017, the platform has developed a user base of over 500K people. With ECOS, one can purchase an ASIC miner – which will be set up at its own mining facility in the Free Economic Zone in Armenia.
ECOS home Users can benefit from this simple-to-use mining platform – as ECOS is responsible for operating, installing, and maintaining the ASIC mines. Popular ASIC mining products such as the Bitmain Antminer S21 can be accessed with ECOS.
Furthermore, you can leverage the cloud mining feature – and access hash rates directly from ASIC miners, without paying a fixed cost.
ECOS lets you access a free trial run on these features. All you need to do is register an account, and enter the promo code “TryBeforeBuy” on the account settings. This code is to access the cloud mining operations.
Enter “TryASIC” to activate the ASIC mining services.
Visit ECOS Security Considerations Related to Bitcoin Mining Users have to be aware of the threats of hacks and thefts when using cryptocurrencies. How can Bitcoin miners protect themselves?
Protecting your Mining Operation from Cyber Threats Bitcoin miners need to be aware of viruses and malware tactics that can hijack crypto-mining hardware.
There is a term called cryptojacking, which refers to mining cryptocurrencies using computing resources from infected hardware. A victim of cryptojacking may not even notice that their system has been compromised.
CPU and GPU mining rigs are especially vulnerable to cryptojacking. Viruses and malware can enter your mobile device and computers by downloading files and mobile apps. Users can protect themselves by steering clear of suspicious links, using antivirus and VPN software, and avoiding public WiFi networks.
