One of the main and first ways to earn money in the cryptocurrency world is mining digital currencies. When Bitcoin was introduced to this market, many people were able to mine a large amount of Bitcoin in very easy conditions and only by using their personal computers.
But today, with the limitation of the remaining amount of unmined Bitcoin and the increase in demand among users, Bitcoin mining has actually become one of the most complicated operations in this field.
If we examine digital currency mining tools and devices from the beginning until now, we will notice the changes and improvements of these devices.
With its high computing ability, the miner solves the existing mathematical equations and provides the miner with the profit obtained from it under the title of extracted digital currency.
In the rest of this article, we will fully introduce these devices and compare their types with each other including:
- What is the concept of mining and miner?
- The difference between miner and rig miner
- Different types of miner devices
- ASIC miner (ASIC)
- CPU device
- GPU device
- FPGA device
- Home miners and devices suitable for home mining
- Criteria for choosing Bitcoin mining machines
- Known manufacturers of ASIC miner devices
- Explanation of how the miner works
- The profit of the miner
- What is farm mining?
- Mining pools
- Comparison of different types of miner devices
What is the concept of mining and miner?
Mining in the field of digital currencies such as Bitcoin is a process by which the transactions of these currencies are verified and recorded and is done in a decentralized manner, which finally leads to mining the desired cryptocurrency. Mining is done through the use of special hardware called miner devices.
Miners are powerful hardware tools that are used to solve complex mathematical problems called Proof of Work consensus algorithm. This algorithm is based on difficult calculations and requires high processing power.
The higher the processing power of this device, the more likely it is to solve the problem and, as a result, receive a reward (usually Bitcoin).
When the computational problem is solved by the miner, the new transactions sent to the blockchain network are recorded as blocks in a blockchain chain.
In this way, the possibility of changing and cheating in the history of transactions is reduced and trust is established in the system.
Therefore, mining is not only used to extract digital currencies, but also plays a vital role in the security and stability of the blockchain network. Also, mining acts as a process of providing and distributing digital currencies.
At first, only a simple computer system was needed to mine Bitcoin. In other words, everyone at home could mine digital currency with the help of their personal computer.
But over time, as the network became more difficult and complicated and the number of people in it increased, digital currency mining was only possible for people who had a special graphics card.
Over time, this graphic card turned into a hardware system called a powerful miner that had the ability to mine the remaining digital currency.
The difference between miner and rig miner
In line with the explanation about the miner device, it is good to familiarize yourself with the rig miner. The rig miner is the graphics card that is used to mine cryptocurrencies.
The difference between rig miners and these devices can be summed up in their flexibility in extracting a large number of cryptocurrencies.
The most popular digital currencies mined by these graphics cards include:
- Monero (XMR)
- AION
- Ethereum Classic (ETC)
- ZEC
Another thing that makes these two digital currency mining tools different is that Rig Miner has the ability to quickly switch from one coin to another.
In addition, it is possible to extract several coins at the same time in these graphic cards. Generally, people who intend to spice up their work in the field of digital currency mining use this tool.
Different types of miner devices
The process of mining or extracting digital currencies includes the verification of digital currency transactions and their final registration in the distributed ledger.
The whole of this process will make the cryptocurrency network move in the direction of decentralization and increase its security, and finally a new digital currency will be mined.
In other words, first all verified transactions are collected in blocks. Then there is a coded puzzle to be solved.
After solving it, new blocks are allowed to be added to the blockchain, and the miner who solved the existing puzzle is also rewarded.
All these steps are among the things done by a miner. One of the most famous of these devices is Asic Miner (ASIC). There are other well-known devices that we will introduce and review later.
ASIC miner (ASIC)
One of the most powerful and best digital currency mining devices is ASIC miners. “ASIC” stands for “Application Specific Integrated Circuit”.
These devices can only work for the purpose of extracting a digital currency. In addition, each of the ASIC devices are designed and produced to solve specific algorithms.
For example, Bitcoin-specific ESICs are only capable of processing the “SHA 256” algorithm. In addition to Bitcoin (BTC), these devices are also used for other digital currencies:
- Litecoin (LTC)
- Dash (DASH)
- Dogecoin (DOGE)
The important point is that digital currencies such as Bitcoin and Litecoin can only be mined by ASIC devices. These devices, like examples of quantum computers, have great ability and speed in performing calculations.
These devices consist of a large number of chips that have much more computing power and operation speed than ordinary chips. Of course, you should not forget that the chips of the Asic Miner device work only for the purpose of extracting digital currency and do not have the ability to do other things.
Typical computer systems and devices used for cryptocurrency mining have built-in microprocessors and memories that allow random access to the user.
In case, electric circuits are used in ASICs, which are designed in a completely exclusive way and in order to preserve information related to digital currency mining.
CPU device
As we mentioned at the beginning of the article, at the beginning of Bitcoin’s introduction to the cryptocurrency world, users could mine Bitcoin only with their computer and personal computer system.
In other words, in 2009 and 2010, a large number of people owned large amounts of Bitcoin with the help of their computers’ central processors. This is while now miners are preparing advanced miner devices and forming mining groups under the name of farm mining to extract digital currencies.
So if you take a brief look at the history of the world of digital currencies, you will realize that people were mining digital currency with their personal computers in the beginning.
But with the passage of time, the expansion of the Bitcoin blockchain network, the increase in the hash power of the network and the increase in the number of its users, it was no longer possible to extract digital currency with “CPU” or “Central Processing Unit”.
GPU device
When the processing system of personal computers, or CPU, did not meet the needs of miners, graphics cards, or graphics processors, came into the field.
In other words, it can be said that GPU, which is abbreviated as “Graphics Processing Unit”, was introduced as the second tool for users to mine digital currencies.
The processing power of these graphic cards was higher than the central processor of computers and it made the operation of hashing the data in the block easier.
FPGA device
If we examine the development of digital currency mining tools over time, after CPU and GPU it is time for FPGA. This device, which is abbreviated as “Field Programmable Gate Array”, works as a programmable digital integrated circuit.
The most important feature of this mining tool is that it is customizable. In other words, you can get device chips according to your needs and goals.
Another factor that is very important about these digital currency mining devices is their low power consumption. This issue has a great effect on improving the cryptocurrency mining process, because it uses more hash power in its activity process with less electricity consumption.
The important thing is that with the passage of time, the amount of competition and the use of miner devices increased among the users of the cryptocurrency world.
This made the developers think of providing a more advanced version of these devices, and finally the ASIC Miner device was introduced to the digital currency market.
In exactly the same situation, some other miners thought of using the method of cooperation instead of competing with each other. As a result, they shared the power of their hardware devices with each other and this is how the mining pool was formed.
Home miners and devices suitable for home mining
Home miners are special devices that allow ordinary people to mine at home. These devices are used to mine digital currencies such as Raven Coin, Dogecoin and other currencies that can be mined with the proof of work algorithm.
To choose a suitable home mining device, consider the following factors:
- Computational power: The processing power of the device must be sufficient to solve complex algorithms. The higher the processing power, the higher the probability of receiving the highest mining reward.
- Power consumption: The home mining device must be connected to the power grid continuously. Therefore, the power consumption of the device should be optimal for the user so that there are no high costs for electricity consumption.
- Temperature and noise: The home mining device must stay on for a long time, so you should not ignore the importance of having a cooling system and preventing the temperature from rising and producing noise.
- Cost and price: The price of the mining machine and its maintenance costs should also be considered. Check if the price of the device is affordable compared to the profit from mining.
Also, popular home mining devices include Antminer S19, Whatsminer M30S, AvalonMiner 1246 and Bitmain Antminer T19. Before buying, it is better to research and discuss your efficiency and personal needs with the advice of experts to choose the best home mining device.
Criteria for choosing Bitcoin mining machines
Due to the progress of miners and changes in the Bitcoin network, users should keep things in mind to choose a miner so that they can operate effectively in the network and earn profit.
Therefore, in the following, we will examine the things that should be considered when choosing Bitcoin mining devices.
- Processing power (Hashrate): The processing power of a Bitcoin miner, that is, the number of hash operations it performs per second, is very important. The more processing power you have, the more likely you are to win the race to receive your Bitcoin reward. This information is usually mentioned in the technical specifications of the device.
- Energy Efficiency: Energy efficiency shows how much electricity a device converts into processing power. Devices with better energy efficiency are more efficient and consume less than other devices.
- Cost and price: The price of the miner and its maintenance and repair costs should also be considered. Before buying, compare the price of the device with the performance and profit you want.
- Upgradability: Some miner devices can be upgraded and by updating parts or installing new devices, their processing power and efficiency will increase.
- Limitations of the cooling system: Miners generate a lot of heat, so it is very important to maintain the right temperature and prevent it from increasing. Make sure that the miner you choose has a strong and proper cooling system.
Therefore, people who intend to start Bitcoin mining should check the above-mentioned things before buying and prepare a miner suitable for their needs.
Known manufacturers of ASIC miner devices
One of the important points that you have probably noticed by now is that ASIC Miner is one of the best, fastest and most efficient digital currency mining devices.
This device is produced and offered by various reputable and well-known companies:
- Bit Main
- Micro BT
- Canaan
- Ebang
Explanation of how the miner works
In general, the miner’s working method can be explained in such a way that miners, as one of the many nodes in the digital currency network, must complete the mathematical equations and calculations related to a unit.
After that, they should notify other network nodes of their success so that no other node will work on that unit.
It is in this case that the person who solves a complete unit receives a reward. This reward is the same amount of mined digital currency that is awarded to the individual miner.
Usually, after the mathematical problems are solved, all the answers are put into a block and finally connected to the global blockchain network.
The profit of the miner
Digital currency mining machines have different working methods and the profit obtained from them also depends on various factors. These factors generally include the following:
- Perks
- The cost of the desired location for extraction
- The amount of electricity consumed
- Price fluctuations of the digital currency to be mined
The amount of electricity and internet required to perform digital currency mining operations is generally high. So they usually need dedicated three-phase electricity.
That is why it is not very logical to use these devices in residential environments. Therefore, a safe and suitable space is usually needed, and its provision has a separate cost.
The price of digital currencies is constantly fluctuating in the cryptocurrency world. In some cases, we even saw a thousand percent growth of a digital currency.
In other circumstances, the value of that digital currency may decrease drastically. Therefore, it can be concluded that this price fluctuation will be very effective in the value of mined cryptocurrency.
What is farm mining?
Farm mining is one of several methods of digital currency mining, which, in addition to its good returns and profitability, requires a relatively large initial capital.
In this method, as a miner, you have to collect a number of special devices for extracting cryptocurrency, or ASIC Miner. In this case, you will be engaged in group extraction.
One of the most important advantages of this method is its high profitability. Using multiple devices simultaneously increases your chances of solving equations and problems and ultimately getting rewards.
Another important thing about farm mining is its environment. Cryptocurrency mining machines, in addition to consuming a lot of electricity, also produce a lot of heat and pollution.
Therefore, it is better to perform field mining usually in engineered and predetermined environments. In addition, powerful fans are used next to the miners to control the temperature of the environment.
In this case, the possibility of damage or fire of the device and its surroundings will be significantly reduced.
Finally, it is good to point out that farm mining is usually done in suburban areas. Because due to the large amount of electricity needed by that number of miners, it is not possible to provide the energy they need through city electricity.
In addition, the noise that these devices make when working is another reason for building mining farms outside the city.
The most important items needed to build a mining farm include the following:
- A number of miner devices
- Internet
- Mining software
- Secure digital currency wallet
- A number of cooling devices or fans
Mining pools
In general, digital currency mining is very important and sensitive in addition to its very high profit. Because all digital currencies that can be mined are generally distributed in a limited capacity and their mining will end one day.
This is why miners’ competition with each other in this area is one of the most important and influential issues in their success.
This competition has made some miners decide to work as a group. In this case, instead of outdoing each other, people can work together and share their equipment and tools with each other. This is how digital currency mining pools were formed.
People who provide the computing power of their miners to the mining pool have a higher chance of adding a block to the blockchain chain.
These pools exist in two general types:
- Public pool
- Private pool
In public pools, all people who have a cryptocurrency mining device can share the hash rate power of that device. In other words, it can be said that membership and activities in public pools are free for all people.
The only thing to pay attention to in this regard is the predetermined rules of these pools.
Private pools are completely in front of public pools. In order to be a member of these pools, you must meet specific conditions.
For example, the number of devices you share in the pool should be based on the specified number. Also many other things that are different in each pool.
The most well-known cryptocurrency mining pools include:
- Ant Pool
- Binance Pool
- Poolin
- F2Pool
- ViaBTC
- BTC.com
- Slush Pool
Comparison of different types of miner devices
Miners are tools used to mine digital currencies such as Bitcoin. These tools have high processing power and verify blockchain transactions by solving complex mathematical problems.
The main factors in miner selection include processing power, energy efficiency, upgradeability, maintenance cost, and cooling system limitations.
The goal of choosing a suitable miner is optimal exploitation and profit from digital currency mining. At the end of the article, we will compare the types of these devices.
| Device type | Advantages | Disadvantages |
|---|---|---|
| CPU | Can be used at home, low price, easy access | High power consumption, low speed, low efficiency due to being old |
| GPU | Easy access, the ability to mine multiple digital currencies, the possibility of CPU-efficient mining | Low efficiency due to old age, high power consumption |
| FPGA | Customization capability, more hash power and less power and energy consumption | Relatively low performance, especially for Bitcoin mining |
| ASIC | High computing power, low energy consumption, high mining speed | High noise and heat production, high price, usable for only one digital currency |
