In a Proof-of-Work blockchain mechanism, transactions on the blockchain are validated by miners.
Cryptocurrency mining is the process of validating blockchain transactions using a computer or many computers.
Technically, miners use these computers to solve complex cryptographic equations and record data in the digital ledger while earning rewards for the work in the form of cryptocurrencies.
The mining process is accelerated as more computers are utilized in solving the equations, hence, a miner will earn more rewards by consuming more computers and mining energy.
Every cryptocurrency can be mined but some cryptocurrencies are most mined and are very profitable to miners. Examples of such crypto coins are Bitcoin, Ethereum, Dogecoin, and Ravencoin.
However, Ethereum does not fit into this list anymore following the Merge which transitioned the network to a Proof-of-Stake (PoS) and disincentivized miners from mining Ethereum.
The knowledge of crypto mining is crucial to potential cryptocurrency investors because miners are major contributors to the security, transaction validation and decentralization of the blockchain.
Mining is a complex process which requires the use of advanced mining hardware, software and a mining pool.
It also requires and consumes a lot of energy and computational skills.
While the mining process may seem complex to understand and set up without adequate tips, this article will give you some important details on how to build a mining rig.
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Mining Rig And How It Works
A cryptocurrency mining rig is a machine assembled as customized personal computer (PC) hardware with all standard PC components like motherboard, RAM, a CPU and a storage unit.
However, mining rigs utilize graphical processing units (GPU) than central processing units (CPU) because GPUs have a better ability to solve the needed cryptographic equations on the blockchain.
GPUs can be easily maintained, have higher hash rates and can beat a standard CPU with more than 800 times per clock.
Since hash rates measure how fast a computer can solve cryptographic equations and the mining profits, most miners adopt GPUs due to their high hash rates.
This is the reason mining rigs are often laced with multiple GPUs because the hash rate increases with the increased number of GPUs a rig has.
More importantly, GPUs are not used by all miners in some cases. In Bitcoin mining, for example, some miners can choose an application-specific integrated circuit (ASIC) instead of a GPU.
Factors To Consider Before Building A Mining Rig
There are some major factors you need to put into consideration before looking forward to building a mining rig.
1. The Cost of Electricity:
Crypto mining consumes a lot of energy which makes it fit to be considered an energy-intensive process. It is important to consider the cost of energy required from you before building a mining rig.
2. The Cost of Equipment:
The prices of mining hardware like GPUs and ASICs can be quite expensive, so considering their cost will help you understand what you’re walking into.
3. Trial and Error:
Building a mining rig is not an automatic or simple process. Sometimes, it can be a process of trial and error which requires multiple adjustments to get the final result.
Some Major Components Required For Building A Mining Rig
A mining rig is expected to have these components in it. All the components are important and serve different purposes.
ASICs are advanced machines built for crypto mining and offer higher hash rates than GPUs. It is also more expensive.
This is a major component of a mining rig which offers high hash rates to miners. More GPUs will mine more cryptocurrencies but one or two are sufficient for beginners.
While some new miners may choose to mine with just CPU, it can’t mine at the rate that a high-end GPU would mine cryptocurrencies.
The motherboard is the core part of the computer and a mining rig which aids all the GPUs that are used in the rig.
5. Power Supply Unit:
This is an important component of a mining rig as it is responsible for supplying power to all rig components. It is always advisable to buy a power supply unit with the ability to supply double the power required by the rig.
Random Access Memory (RAM) is an important component which temporarily stores data while the computer is running. Having enough RAM will enable miners to store data of all GPUs used on the rig.
A storage unit of about 250GB and above will be enough to store data, depending on how much data you’re mining.
Step By Step Guide To Building A Mining Rig
Below is a quick step-to-step guide on how to build a mining rig.
1. Fix The Motherboard:
Place the motherboard on something that will make it static-free outside the mining frame. Before this, ensure that the CPU’s socket lever is in the released position.
2. Attach The Processor:
Secondly, mark the sockets of both the motherboard and CPU for easy identification later and attach the processor to the motherboard.
The CPU pins are fragile abd can easily bend and damage the processor if you are not careful when attaching them.
3. Install the RAM:
Insert the RAM into the RAM socket of the motherboard after opening the side brackets of the slot. This is a straightforward process that requires carefulness, especially in pushing the RAM into the socket. Also, this must be done in the correct orientation.
4. Attach The PSU:
The PSU is the source of power to the motherboard, so endeavour to attach it to the motherboard safely or else the mining rig will not power on.
The 8-pin power connector of the CPU should be inserted into the motherboard slot.
5. Attach USB Risers:
These USB risers have available PCI slots on the motherboard where they can be inserted. Also, they are used to connect the GPUs to the motherboard.
6. Attach The GPUs:
Use USB risers to safeguard the GPUs onto the frame and plug in PCI-e 6+2 power connectors into the GPUs.
Before you boot the machine, ensure that all the cables are properly plugged in.
Is Crypto Mining Profitable?
Yes, cryptocurrency mining has always been profitable, even though the Ethereum network does not give an incentive for mining anymore due to the Merge.
The profitability of mining depends on some factors. Just like that of the Ethereum blockchain, the shift from a PoW to a PoS mechanism has made it almost impossible for miners to continue.
The new network only allows validators instead of miners to secure the network and validate transactions while earning rewards from the ETH they staked. For example, the PoS mechanism, that Ethereum runs on has reduced the amount of energy required on the network, thereby reducing the hashing power which further reduces the hash rates for miners.
However, Bitcoin mining is still very profitable as it still uses the PoW mechanism, unlike Ethereum.
Another factor that makes the mining quite profitable is the price of such coins.
For example, if the price of a cryptocurrency is high, then mining such coins will be very profitable.
Crypto mining is still one of the best ways to earn cryptocurrency, even though mining requires a lot of energy.
It’s quite impossible to solve these cryptographic equations without the use of an advanced machine called a mining rig.
Mining rig enables miners to mine cryptocurrency by solving complex cryptographic equations, validates transactions and rewards the miners for the work done on the blockchain.