(03 September 2019 )
While the actual process of cryptocurrency mining is handled by the cryptocurrency mining hardware itself (i.e. CPU, GPU, ASIC etc.), special cryptocurrency mining software is needed to connect your miners to the block chain and to its respective mining pool as well. The mining software delivers the work to the miners and receives the completed work from the miners and relays that information back to the block chain and your mining pool.
1) Ethminer
Ethminer is an “Ethash” algorithm supported GPU mining software. It can mine every coin which relies on an “Ethash Proof of Work” thus including Ethereum, Ethereum Classic, Metaverse, Musicoin, Ellaism, Pirl, Expanse and others. It also supports both of the GPU’s architecture (i.e. NVidia and AMD).
2) XMR-Stak
XMR-Stak is a universal Stratum pool miner. This miner supports CPUs, AMD and NVIDIA GPUs and can be used to mine the crypto currencies Monero, Aeon and many more Cryptonight and its variants supported coins.
3) CCMiner
CCMiner is an open source project for only CUDA compatible GPUs (i.e. NVidia). The project is compatible with both Linux and Windows platforms.
Fig: General Interface of Mining Software
2.1 Mining Methodology for CPU/GPU
This section consists of a detailed mining methodology for CPU/GPU mining from planning what currency and hardware specifications to be choose for mining through execution. It will cover not just the technical setup but the decision making and process regarding profitability and long term gains.
2.1.1 Planning
1) What to mine?
All GPU’s are not equal in terms of their performance. Some GPU’s mine certain algorithms/coins better than others. For example, NVIDIA GPU’s are better at mining Zcash while AMD GPU’s are more successful mining Ethereum. It is important to decide what you want to mine before purchasing or sourcing your GPU’s. Currently Ethereum is the most profitable coin to mine, however at some point it will go from Proof of Work to Proof of Stake. At this point those mining Ethereum will need to move to another algorithm. The good part about GPU’s is that unlike ASIC miners, they can mine any algorithm. So switching gears is not as difficult as one might think and we should see future coins using the Proof of Work model. The most beneficial approach is to first analyze which cryptocurrency is most profitable these days and then select the most relevant mining hardware that could generate most hashing power according to the currency which has been selected for mining.
2) Estimatin of Electrical Costs
When it comes to mining, there is more to consider then simply how much coin you can mine in a given period. GPU mining hardware running 24/7 consumes quite a bit of power. If you don’t factor in your electrical costs you may actually be losing money when your utility costs monthly are higher than the amount of coin you are mining. Power costs fluctuate drastically depending on where you are in the world. In some areas, it may not be profitable at all to GPU mine.
3) Profitability and Return on Investment (ROI)
When mining, there are two important factors. How long will it take for you to get a return on investment (ROI) and how profitable is your mining operation. It is important to be conservative when doing these calculations as your mining rig will become less profitable over time as the mining difficulty increases. Your ROI is very simple. How many days will you need to mine to reach profits that equal your initial hardware investment? Here is a basic example.
Hardware Costs: $3000
Total Hashing power: 230 MH/s
Total Power Consumption: 800W
Daily profit: $12.25
$3000/12.25 = 245 Days to ROI*
Additionally, These GPU’s we use to mine are extremely powerful and great for gaming. These cards have excellent resale value and there is a large market for them. After 12-24 months you can conservatively resell the cards for 20-50% of their retail value to help offset the difficult increase and claim your ROI.
Profitability is the second factor and there are two considerations. How much coin you mine and what is the interest/market growth of that coin. You obviously will want to mine as much coin as possible, but we also need to consider the long term growth of the coin we mine. Some mining pools will allow you to be paid out in Bitcoin. This may be helpful if you plan to invest your profits in to Alt coins. You also want to be smart with how often you take your mining payouts. You may be charged fees per payout or fees for payouts under a certain threshold. You want to avoid transaction fees cutting into your profits. Best practice would be to read all the guidelines on payouts and fees from the mining pool you are using and to take payouts infrequently, either monthly or quarterly. You may find you will be much more profitable taking payouts less frequently and you may see more growth with your profits coming out in BTC or investing in an Altcoin (NEO, OMG, TenX, Monero, etc)
4) Up-time
When it comes to mining, nothing is more important then up-time. Every minute your mining rig is offline you are losing money. So it is crucial to build redundancy into your design as well as invest in materials and testing to repair your rig if/when something fails. As with any 24/7 operation, you’ll need to find out single points of failure. Some considerations are:
GPU failure, PSU failure, motherboard failure, peripheral failure, OS corruption, power outages, internet outages etc.
5) Monitoring
Having built in redundancy and a good disaster recovery plan are great steps to ensure your mining rig stays up and online. But all that planning won’t help if you don’t realize your mining rig is down. It is important to setup email or text alerts anytime your rig is down or stops mining. Most mining pools have a built-in function that you can configure to send you a text or email alert anytime the pool detects you stopped mining.
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