Getting Started Mining

                                  Getting Started Mining

To get started as a major Bitcoin miner, there are two specific things that

you’ll need. Aside from having cheaper electricity, you will need access to

the latest mining hardware. Since the second halving event that took

place in early July 2016, the mining of Bitcoins has become even tougher,

with the reward for successfully mining a block dropping from 25 Bitcoins

down to 12.5.

Also, with the Chinese taking the lead in the Bitcoin mining game, you’ll

need to work with the best available miners to be able to compete.

However, before we delve into the Bitcoin hardware you will need, you

must first gain an understanding of a few technical terms.

Hashrate

As earlier explained, the hashrate refers to the measure of how many

attempts at solving a Bitcoin block a miner tries per second. The more

attempts, the more chances the miner has of solving the block and

claiming the 12.5 Bitcoin reward.

Joule per Gigahash (J/GH)

A joule is a unit for measuring energy, and it represents one watt over

one second. Electricity is a major recurring expense for miners, and

therefore the joule per gigahash (J/GH) is especially important when

making comparisons between miners. It is estimated that the electrical

efficiency of an Application-specific integrated circuit (ASIC) miner is

expected to go higher in indirect proportion to the fewer joules used to

produce a Gigahash.

Difficulty

When the term difficulty is used in Bitcoin mining hardware, it simply

refers to an automatic control measure that prevents Bitcoin blocks from

being solved increasingly quickly. The difficulty level of mining adjusts to

the current hashrate, ensuring the blocks are solved every 10 minutes on

average.

Profitability

This refers to a bottom-line number from calculating the current Bitcoin

price and Difficulty, including your miner’s cost and hashrate and your

electrical cost in fiat money per kWh. The Difficulty mechanism, which

adjusts itself quite frequently, together with the volatile price of Bitcoin,

creates uncertainty about the future profitability of Bitcoin mining.

However, using an online mining profitability calculator can prove very

useful for this purpose. You should also create a custom spreadsheet

containing inputs showing various exchange rate and Difficulty

projections. Also, ensure that you take into consideration probable

downtime due to software or hardware failures, power cuts, and the like.

Break-even point

This refers to the duration taken for your miner hardware to pay for

itself.

Pool Fees

As mentioned earlier, mining pools are cooperative groups of miners who

pull together to improve their hash-power. They distribute any rewards

the pool earns in accordance with each individual miner’s hashrates.

There are various types of pools, and each has their unique fees and

reward structures. The larger the pool, the more frequent returns can be

expected, though often, the higher the fees.

Top Hardware for Bitcoin Mining

Now that we have acquired a basic understanding of the metrics used to

assess Bitcoin mining hardware, we will now identify the various mining

hardware that is currently in use. They include the following:

Bitmain’s AntMiner S9

The AntMiner S9 is manufactured by Bitmain – the current leading

manufacturer of publically-available ASIC hardware. It is the ideal Bitcoin

mining hardware for mining-for-profit on a small scale. It comes with a

hashrate of 11.8 – 14 TH/s (figures are approximate and may vary by 5%),

it consumes 1350 Watts of electricity (figures are approximate and may

vary by 10%), and possesses a power efficiency of 0.1 Joule per GH

(figures are approximate and may vary by 10%).

It has a built-in controller, produces 70dB noise at 4ft/1.2m (figures are

approximate and may vary by 10%), and it has a chip process of 16nm. A

brand new S9 currently costs between $1831 to $2016 less shipping fees

(figures are approximate and may vary by 10%).

Its profitability is plausible (assuming an electricity cost of 10c (US) per

kW/h, a 2.5% pool fee and at the current Bitcoin price), and it has a

break-even point of 0.9 years, as per CoinWarz’s calculator, assuming an

electricity cost of 10c (US) per kW/h and a 2.5% pool fee at the current

Bitcoin price.

The S9 is the latest model of hardware from Bitmain, and it is the first

ASIC to market with a 16 Nanometer (nm) semiconductor fabrication

process. This means that the circuits in the S9 BM1387 are approximately

half the size of previous generation mining chips.

The S9 is fully capable of running on a standard Power Supply Unit, (PSU)

better known as a computer, but it is often recommended that you use

Antminer’s APW3-12-1600-B2. It is high-quality hardware that is

extremely power-efficient and designed specifically for mining.

Bitmain’s AntMiner S7

The AntMiner S7 is also a product of Bitmain, and it is the most popular of

all the Bitcoin mining hardware. You can readily find the S7 in any major

mining operation, and it also has a very good second-hand value. It comes

with a hashrate of 4.73 TH/s (figures are approximate and may vary by

5%), it consumes 1350 Watts of electricity (figures are approximate and

may vary by 10%), and possesses a power efficiency of 0.25 Joule per GH

(figures are approximate and may vary by 10%).

It also has a built-in controller, produces 62dB noise at 4ft/1.2m (figures

are approximate and may vary by 10%), and it has a chip process of 28nm.

A brand new S7 currently goes for $440 less shipping fees, while a secondhand

S7 costs around $440 to $674 (figures are approximate and may vary

by 10%).

It has a marginal profitability (assuming an electricity cost of 10c (US) per

kW/h, a 2.5% pool fee and at the current Bitcoin price), and reaches a

break-even point of 2.6 years, as per CoinWarz’s calculator, assuming an

electricity cost of 10c (US) per kW/h and a 2.5% pool fee at the current

Bitcoin price.

The S7 is loved for its affordable price tag among other things, which

make it an easy introduction model for prospective miners. It provides a

maximum efficiency that can be extracted from a 28nm process and has

room for further improvement through skilled modification.

It is great hardware for use in experimenting with alternative energy

solutions or software and hardware modifications. It is a high-quality

performer that can also turn a profit. It is also available as a variant

model – the S7-LN model, which comes with a built-in 700W power supply.

It is cheaper, uses less power and is suitable for home and office use.

Canaan’s Avalon6

A lot of people are unhappy about Bitmain’s dominance of the Bitcoin

mining hardware market. Given the fact that Bitmain controls 18% of the

network hashrate in the form of AntPool, it is easy to see why such

concerns arise.

Unfortunately, there is currently a shortage of suitable alternative

hardware. The Avalon6 from Canaan Creative, however, is the only best

possible alternative to Bitmain’s hardware. It is very good hardware that

uses about 300W less power than the AntMiner S7 from Bitmain.

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It comes with a hashrate of 3.5 TH/s (figures are approximate and may

vary by 5%), it consumes 1050 Watts of electricity (figures are

approximate and may vary by 10%), and possesses a power efficiency of

0.29 Joule per GH (figures are approximate and may vary by 10%).

The Avalon6 also has a separate controller, produces 55dB noise at 4ft/

1.2m (figures are approximate and may vary by 10%), and it has a chip

process of 28nm. Without a built-in controller, the Avalon6 will need to be

run from a Raspberry Pi (B, B+ or RPi2). The best part about this is that a

single RasPi can run up to 50 units.

A brand new Avalon6 currently goes for $550 less shipping fees, while a

second-hand Avalon6 costs around $360 to $875 (figures are approximate

and may vary by 10%). It has a possible profitability (assuming an

electricity cost of 10c (US) per kW/h, a 2.5% pool fee and at the current

Bitcoin price), and its break-even point peaks at 7 years, as per

CoinWarz’s calculator, assuming an electricity cost of 10c (US) per kW/h

and a 2.5% pool fee at the current Bitcoin price.

What software is needed?

Bitcoin mining software is somewhat of the ‘middle-man’ between the

hardware, and the users and the Blockchain network. They help the

mining hardware by transmitting super calculations performed by the

hardware on which they are installed to the Blockchain network.

The mining software is also essential for monitoring the performance of

the hardware on which they are installed. The software monitor activities

like the hashrate, average speed, and the fan speed of the mining

hardware.

Below are some of the best Bitcoin mining software available today. They

were chosen based on their running environment and operating system.

Bitcoin Miner

The Bitcoin miner software is especially renowned for its profit

calculation feature. This feature provides details of your mining status as

to whether you’re gaining profits or running at a loss. The software also

has an easy to use interface. It is able to switch to power saving mode, it

supports fast share submissions and is available for Windows and MacOS X

Operating environments.

BTCMiner

The BTCMiner is an open source Bitcoin Miner that is manufactured for

the ZTEX USB-FPGA modules 1.5 boards. Its boards come with USB ports

that are great for programming and communication. The BTCMiner is

available for Windows and MacOS X Operating environments.

CGMiner

The CGMiner is reputably the most commonly used of all the Bitcoin

miners. It owes its popularity to its super features which comprise of fan

speed control, remote interface capabilities, self-detection of new

blocks, multi GPU support, and much more. The CGMiner is available for

Windows, Mac OS X, and Linux platforms.

BFGMiner

The BFGMiner bears some similarities with the CGMiner, but one

particular feature sets it apart, and that is the fact that it was designed

specifically for ASICs and not Graphics Processing Units (GPU). The

BFGMiner is available for the Windows, Mac OS X, and Linux platforms.

EasyMiner

Finally, we have the EasyMiner. The EasyMiner is a GUI based software

that acts as a wrapper for CG and BFG miner software. It can be used for

both solo and pool mining operations. Another super feature of the

EasyMiner software is its ability to provide performance details in an easy

to visualize graph for tracking your mining activities. It is available for

Windows, Mac OS X, and Linux platforms.

Mining apps

Bitcoin mining apps are also becoming increasingly popular. Programmers

and companies have begun to notice the trend in the use of Bitcoin as a

digital currency and have moved into the market to meet the growing

demand. Below are some of the best Bitcoin mining apps available today.

They are grouped into four different categories: Tools, Payments, Wallets,

and Games.

Tools

1. The ICO App

This Bitcoin mining app provides detailed listings of initial coin offerings.

It gives a comprehensive profile of tokens, simultaneously giving direct

links to their whitepapers and crowdfunding pages. A particularly

intriguing feature of the ICO app is its notification alert feature for token

sale opening and closing dates. It also includes a news section and can be

downloaded from Google Play Store, free of charge.

2. Coindex

Coindex offers crypto portfolio tracking in an easy to use interface. Some

of its main features include candlestick charts, market data, multiple

portfolios and market cap listings. It is a must-have for any investor in the

crypto space. Irrespective of your level of experience, Coindex is a vital

tool that would set you up for success. It can be downloaded from both

the Google Play Store and App Store for IOS, free of charge.

3. Blackfolio

Blackfolio is another Bitcoin mining app that is packed with features to

keep you well informed about the Bitcoin and cryptocurrency markets.

Some noteworthy features of this app include detailed price information

and preset notifications for when the price crosses a certain limit. It is

the perfect tool for keeping an eye on the cryptocurrency markets and an

invaluable resource for trading on them. It can be downloaded from both

the Google Play Store and App Store for IOS, free of charge.

4. Lawnmower

The lawnmower is a Bitcoin investment app which enables you to earn

Bitcoin through the investment of your fiat money. It automatically

synchronizes your fiat bank account with your Coinbase account where

your Bitcoins are stored and converts your money into Bitcoins. It is a

great way to save your money by putting it towards building your Bitcoin

earnings. It can be downloaded from both the Google Play Store and App

Store for IOS, free of charge.

5. Getgems

Getgems is another Bitcoin mining tool, and this one pays you to text

people. Unlike other mining apps that deal with BTC, Getgems deals

specifically with GEMZ. It is also a decentralized cryptocurrency, and it is

earned via referrals. Usually, you refer someone to the app, and when the

person becomes a new participant, you earn 25 GEMZ, which is the

equivalent of $0.25. You can transfer the money to Lawnmower via the

messaging service within the app. Getgems can be downloaded from both

the Google Play Store and App Store for IOS, free of charge.

Payments

1. BitPay

Bitpay has been renowned for making Bitcoin payments via its website,

and now they’re extending their “one-touch” Bitcoin payments to mobile

devices. They aim to achieve this through their Bitcoin checkout app. It

can be downloaded from both the Google Play Store and App Store for

IOS.

2. Gliph

Gliph has been described as the ultimate Bitcoin marketplace. It has lots

of functions that exceeds being a mere payment app. It allows you to

send and receive messages to individuals or within groups. You can also

put items on display you have for sale and also purchase items all using

your mobile device or via your desktop computer. It is a well-rounded

mobile app that aims to revolutionize the cryptocurrency marketplace. It

can be downloaded from both the Google Play Store and App Store for

IOS.

3. Spare

The Spare app allows you to turn your Bitcoin into cash quickly and

conveniently. All you have to do is to request for cash using an ATM. You

will receive a barcode which you will take to a local shop near you. The

shopkeeper will then scan the code and give you cash in exchange. Spare

also works with fiat currency, thus eliminating the need for an ATM. Spare

is available for download only on the App Store for IOS.

4. Fold

Fold app is a favorite for retailers. It allows users to make Bitcoin

payments for their purchases at stores such as Starbucks, Target, and

Whole Foods from the convenience of their mobile devices. Fold app’s

developers are currently in the process of adding retailers, a move that

will revolutionize mobile payments. It will soon be available for download

in the various app stores.

Wallets

Wallets are mining apps that provide a safe and secure location for

storing and accessing your Bitcoins from your mobile device. Some of the

best Bitcoin wallets include:

1. Xapo

Xapo is the “only fully insured Bitcoin storage solution.” It allows you to

send and receive Bitcoins in an easy two-step process. It doesn’t require

payment of any fees, and it can be downloaded on both the Google Play

Store and App Store for IOS, free of charge.

2. Circle

Circle is more than just a wallet, it is a Bitcoin exchange app that enables

you to store, access, send, receive and convert your Bitcoins using your

mobile device. You can create your own QR codes using the app as well.

You can download Circle from both the Google Play Store and App Store

for IOS, free of charge.

3. Blockchain

The Blockchain wallet app is arguably the most commonly-used Bitcoin

wallet, and it is widely known for its incredible security. The Blockchain

wallet is an open source app that allows you to send and receive Bitcoins,

view transactions and access up to 22 different currencies. It doesn't end

there; Blockchain also allows you to scan paper wallets and browse for

Bitcoin merchants that are close to you. It is currently available for

download on both the Google Play Store and App Store for IOS, free of

charge.

Games

Finally, we have the mining games. There are actually some mobile games

that can help you earn real Bitcoins. Some of them include:

1. Bitcoin Billionaire

Bitcoin Billionaire is a great mobile game for Bitcoin mining. It simply

involves tapping the screen to earn more coins, make upgrades to you

mining office and ultimately become a Bitcoin Billionaire! It is currently

available for download on both the Google Play Store and App Store for

IOS, free of charge.

2. FlapPig

FlapPig was created by BitLanders and follows the same modus operandi

as the popular game Flappy Bird. In this game, you help Foo the golden

pig fly around and collect Bitcoins while dodging obstacles. You will be

rewarded and earn real Bitcoins. It is currently available for download on

both the Google Play Store and App Store for IOS, free of charge.

3. Bitcoin Fighter

Bitcoin Fighter is a game with two fighters pitted against each other,

where they both have to fight for a price of wagered Bitcoins. The game

is still in Beta mode and can either be played via the app or in the

tournament from its website. You can download it for free from the

Google Play Store.

Electrical costs for mining

Bitcoin mining consumes a lot of electricity, and that costs money. As

earlier pointed out, the cost of the mining hardware and the monthly

electricity fees are the two most expensive things in any mining

operation. When not planned and managed properly, the electrical costs

for mining can consume all of your profits.

You need to figure out how many hashes you are getting for every watt of

electricity that you consume. This can be done by dividing the hash count

by the number of watts. For instance, if you have a 500 GH/sec device

which consumes 400 watts of power, it means you’re getting 1.25 GH/sec

per watt.

Check your electricity bill or use an online electricity price calculator to

find out how much it translates to in hard cash. For optimum results, it is

recommended that you run a mining operation in a location where you

can get the cheapest electricity.

China currently has the highest concentration of Bitcoin miners because

of the country’s cheap electricity. Chinese pools control approximately

81% of the network hash rate. China is also home to many of the top

Bitcoin mining companies including AntPool, F2Pool, BTCC, and BW.

In the US, Washington State has the most mining hardware due to the

cheap hydroelectricity located there. Also, in Venezuela, Bitcoin mining

has become very profitable because of the crisis and the cheap electricity

being enjoyed there.