Definition of the Cryptocurrency mining used to calculate and validate transactions on the blockchain.
What is the Cryptocurrency Mining ? It is the process of verifying transactions on a blockchain and adding them to the public ledger in exchange for a reward in the form of a cryptocurrency. It is also known as Crypto Mining or just Mining. The first miner to solve a cryptographic puzzle that is part of the transaction is rewarded with cryptocurrency.
Introduction to Cryptocurrency Mining
The mining process involves solving complex mathematical puzzles to validate transactions on the blockchain. Bitcoin miners use their computational power to solve these puzzles and are rewarded with bitcoins for each block they extract.
This makes bitcoin mining very competitive and has led some people to turn to alternative currencies, called altcoins, as an alternative form of electronic currency mining. The Ethereum blockchain uses a different hashing algorithm from that of Bitcoin, making it incompatible with ASICs designed for Bitcoin mining (although Ethereum is considering changing this in the future).
Some promising cryptocurrencies in 2022 are Bitcoin (BTC), Ethereum Classic (ETC), Ethereum, which is switching from Proof of Work (POW) to Proof of Stake (POS) in September 2022, Ripple (XRP) which is initially designed to replace the SWIFT interbank money transfer protocol, and Flux (FLUX) which has a partnership with Nvidia.
Different types of Cryptocurrency Mining methods
Cryptocurrency mining is carried out by machines or computers called miners. These machines are used to solve complex mathematical equations to validate transactions. The miner who solves the equation first is rewarded with cryptocurrency.
Mining can be done either with a computer or with specialized hardware called RIGs or ASICs. RIGs are computers equipped with specialized hardware that can extract cryptocurrency. They are cheaper than ASICs, which are more powerful and efficient equipment for extracting cryptocurrency, but they also cost more because they are designed and dedicated to only one or a few cryptocurrencies. They are therefore less flexible and less suitable for mining different cryptocurrencies.
The different types of mining are listed here.
- GPU mining. This type of mining involves the use of graphics processing units (GPUs) to solve complex mathematical problems and verify transactions on the blockchain. It is commonly used to mine cryptocurrencies such as KASPA, Raven, or the PoW Ethereum variants like ETHW. Indeed ETH has now switched to PoS (Prrof-Of-Stake) ans it is not possible to mine anymore.
- ASIC mining. This type of mining uses specialized hardware called application-specific integrated circuits (ASICs) to solve complex mathematical problems and verify transactions on the blockchain. ASICs are highly efficient at mining and are commonly used to mine Bitcoin and other cryptocurrencies.
- CPU mining. This type of mining uses the central processing unit (CPU) of a computer to mine cryptocurrency. It is less efficient than GPU and ASIC mining, and is less commonly used for mining.
- Disk mining. This type of mining involves the use of hard disk drives (HDDs) or solid-state drives (SSDs) to store and process data related to cryptocurrency transactions. It is used to support the operation of cryptocurrency networks. It has a major concern, which is the impact on the lifespan of the disk drives. The constant read and write operations required for disk mining can wear down the disk drives over time, quickly reducing their lifespan. This is especially true for HDDs, which have moving parts and are more prone to wear and tear compared to SSDs.
- Cloud mining. This type of mining involves the use of remote data centers to mine cryptocurrency. Users can rent or lease computing power from these data centers to mine cryptocurrency without the need to set up their own mining equipment. It is not possible anymore to mine on most of the big cloud providers, for example, Microsoft announced that it has banned mining on their Cloud Services servers.
To learn about more traditional IT, here is a definition of a Database Management System also called a DBMS.
Mining pools allow miners to work together and share rewards proportionally to their mining power. These are essentially servers that pool the work of the network’s various machines. Mining pools are an important aspect of cryptocurrency mining.
They allow miners to work together and share rewards proportionally to their mining power. Mining pools are also a great way for beginners to get into mining, as they don’t require a lot of equipment or technical knowledge.
Here is a list, non exhaustive of some popular mining pools, compatible with HiveOS.
- Braiins Pool: formerly named Slushpool is a well-established Bitcoin mining pool with a user-friendly interface and various payment methods to choose from. The general URLs for BitCoin mining are the folowing:
- BTC (BitCoin) : stratum+tcp://stratum.braiins.com:3333
- BTC (BitCoin) : stratum+tcp://stratum.slushpool.com:3333
- Antpool: Antpool, operated by Bitmain, supports the mining of multiple cryptocurrencies, like BTC, BCH, LTC, ETC, ZEC, DASH, ETW, etc. And it offers competitive fees. The payments methods are the folowing, depending on the coin : PPLNS, FPPS, PPS, PPS+. Here are a few adresses with port numbers:
- BTC (BitCoin) and BCH (BitCoin Cash) : stratum+tcp://ss.antpool.com:3333
- BTC (BitCoin) and BCH (BitCoin Cash) : stratum+tcp://ss.antpool.com:443
- BTC (BitCoin) and BCH (BitCoin Cash) : stratum+tcp://ss.antpool.com:25
- ETHW (EthereumPoW): stratum+tcp://stratum-ethw.antpool.com:8008
- RVN (Raven Coin) : stratum+tcp://rvn.antpool.com:8003
- F2Pool: F2Pool is a Chinese mining pool with support for multiple cryptocurrencies and a user-friendly interface.
- BTCC: BTCC is a reliable Bitcoin mining pool with a long track record in the industry and low fees.
- ViaBTC: ViaBTC is a high-performance mining pool with support for multiple cryptocurrencies and low fees.
- Miningpoolhub: Miningpoolhub is a multi-currency mining pool with support for over 50 different cryptocurrencies and automatic coin switching.
- Ethermine: Ethermine is a leading Ethereum mining pool with low fees and various payment methods to choose from.
- Nanopool: Nanopool is a mining pool with support for multiple cryptocurrencies and low fees.
- Sparkpool: Sparkpool is a leading Ethereum mining pool with low fees and support for Ethereum and Ethereum Classic.
- Dwarfpool: Dwarfpool is a mining pool with support for multiple cryptocurrencies including Ethereum, Monero, and Zcash.
- Minerpool: Minerpool is a multi-currency mining pool with support for various cryptocurrencies including Bitcoin, Litecoin, and Dash.
There are many software programs available for mining various cryptocurrencies. Some popular ones include CGminer, BFGminer, and EasyMiner. These programs allow miners to choose which cryptocurrency they want to mine and provide a user interface for setting up and monitoring the mining process.
AMD Graphics Cards vs NVIDIA
GPUs are an important part of the mining process as they are responsible for performing the complex mathematical calculations required to validate transactions. AMD and NVIDIA are the most popular manufacturers of graphics cards. Here a few differences between AMD and NVidia GPUs.
- Performance: AMD GPUs are generally considered to be more efficient at mining certain cryptocurrencies, particularly those that are based on the Ethash algorithm, such as ETHW. NVIDIA GPUs are generally better suited for mining cryptocurrencies that use the Equihash algorithm, such as Zcash.
- Price: AMD GPUs tend to be less expensive than NVIDIA GPUs, making them more accessible to miners on a budget.
- Power consumption: AMD GPUs tend to have a higher power consumption compared to NVIDIA GPUs, which can be a significant factor in terms of operating costs for a mining operation.
- Overclocking: AMD GPUs are generally easier to overclock than NVIDIA GPUs, which can allow miners to increase their hash rate and potentially improve their mining performance.
Nvidia GPUs and the LHR mining limit
Nvidia has implemented a limit on its GPUs called the Low Hash Rate (LHR) limit, which is designed to prevent their GPUs from being used for cryptocurrency mining. This limit can be bypassed, but doing so may void the warranty on the GPU.
The LHR (Low Hash Rate) limit is a feature of certain models of NVIDIA graphics processing units (GPUs) that limits the hash rate, or mining performance, of the GPU. This limit is intended to prevent the GPU from being used for cryptocurrency mining, which can put a strain on the GPU and potentially shorten its lifespan.
The impact of the LHR limit on cryptocurrency mining depends on the specific GPU and the cryptocurrency being mined. For some cryptocurrencies, the LHR limit may not significantly impact the mining performance of the GPU. For others, the limit may significantly reduce the hash rate and make the GPU less efficient or unprofitable for mining.
The LHR limit is implemented through software drivers provided by NVIDIA, but it can be bypassed or disabled through the use of third-party drivers or modifications to the GPU BIOS. In the NVidia drivers with a version higher than the 5.20, the LHR is unlocked at 100%.
Is cryptocurrency mining still profitable in 2023?
Cryptocurrency mining can be a profitable venture if done properly. However, it is important to keep in mind that the difficulty of mining increases over time as more miners join the network. This means that the rewards for mining will decrease and the cost of electricity and equipment will likely increase.
Additionally, the value of the cryptocurrency being mined can also fluctuate, which can impact the profitability of mining. In general, it is important to do thorough research and consider all factors before deciding to invest in cryptocurrency mining.