How to start mining bitcoins. How are bitcoins made?

Hello friends, in this article, which by the way is the first on this site about mining (the article is constantly updated), we will talk about how to start mining on a video card (GPU) and where to start. If you are too lazy to read, at the end of the article there will soon be a video on how to start mining for Beginners. But first, I advise you to read the first 2 paragraphs on how to start mining for a beginner.

Start of mining

This article deals, as you understood above, with mining on a video card and step-by-step instructions. This mining guide is for beginners. We will set up mining, connect, install software, overclock the video card, and so on.

Mining getting started

What do we need to start mining from scratch?

Step-by-step mining

1. And probably the most important thing for mining on a video card is a video card (GPU), at least one, also more or less modern, approximately no more than 3-4 years old, and not a budget one. (Mining is also possible on hard drives and). If you want to choose a video card, then here you go, the best cards are selected there, tables and tops are compiled.
2. Naturally a computer (system unit) or with an installed Operating System (Windows x64). Exactly 64 bit version
3. Decide on the currency we will mine. Depends on the video card, in our example the description will be mining eth. On Nvidia it is better to mine at the moment (12/28/2017) ZCASH - more on that below. Now broadcast.
4. Since our mining is online, we need the Internet. Fast speed is not needed, but good ping is desirable, more on that below.
5. Select a pool (POOL) where we will mine ethereum (not to be confused with etherium). Next, select the miner program and configure it.
6. Choose an exchange or wallet where our mined Ethereum coins will be deposited and accumulated, as well as services where you can transfer our earned coins into rubles and withdraw them to the card.

Mining instructions start

And so let's start, you have a suitable video card and everything listed above in points 1, 2, 4 above and the drivers must be installed. If you don’t have a video card, then read the article. If you don’t have video cards and equipment, read more about what kind of equipment you need for mining at the link -.

In our example, there will be Windows 7 x64 OS (by the way, Ethereum mining is only on x64 bit operating systems), two AMD Radeon Sapphire RX 470 4gb video cards. The processor does not matter, in principle, nor the amount of RAM, but 4 gigabytes or more is recommended. The simplest manning kit for beginners. UPD 3 GB and lower versions of video cards are no longer compatible They go for mining ether, if you have 3gb or less then you need to look for an alternative. There are other algorithms and currencies for mining, the list is .

Fast Internet is not needed, but with good ping. If you connect via cable, then of course it’s better than the option with Wi-Fi, but Wi-Fi will also work (I’ll write about this later), you can also read -.

How to start mining

Select a pool where we will mine ether coins:

1. ethermine.org

Pros of this pool:

• +High pool power
• +Small and honest commission 1%
• +Good ping

• Pool in English
• The site is a little incomprehensible (for beginners), but we will use its example to describe how to set it up

2. dwarfpool.com/eth
pros:

• + for those from Russia, they have a server in Russia, which is good for ping
• + small commission of 1% which is not secretly inflated
• + Good pool power
• + Easy to set up the miner

• - A little unclear site (for beginners)

3. www2.coinmine.pl/eth/
Pros:

• + Honest small commission 1%
• + Good ping
• + Good power
• + Better protection

• - More complex customization manner
• - There are also difficulties with the site

4.eth.nanopool.org/

• + Simple website
• + Easy to set up the miner
• + Great power

• - There are rumors among miners and many claim that the stated commission of 1% is well underestimated

At the moment I have chosen and will show the setting using example 1 - ethermine.org open the site in your browser

So you have chosen the pool, now you need to select a wallet or exchange in advance. What is a wallet, Ethereum Wallet? This wallet is located on your computer, coins are received from it, then from this wallet through services they can be withdrawn to a card, which is not profitable at the moment, it is more profitable to transfer to bitcoins, and then to a card in rubles, but this can be done on the exchange. But the wallet is much safer than exchanges, I will soon write an article on how to create
wallet.
But for beginners it is better to work with exchanges

1. Binance is a more professional exchange, a good alternative to exmo!
2. Exmo is a great exchange, especially for beginners, it loves miners.
3. Yobit is a good Russian exchange.

There are many of them, but let's start with the simplest one, then as you gain experience you will move on to a more interesting exchange, I also advise you to read the list of good ones.

After downloading, unpack the archive with the miner to a place convenient for you, the folder into which you are unpacking is preferably named in Latin (in English). This is what the content should look like.

Now let's start setting up the miner and mining
Next is the Start.bat file, right-click on it and select edit. If the Run button appears, click it.

Here is the code of our file that we will run

and we need to edit it for your pool and your wallet (exchange)
-epool and then indicate the pool address since we chose ethermine.org, we should get:

Epool eu1.ethermine.org:4444

(This is the address and port for mining, for other pools you can find out on the pool website)

Do not close the text editor

If you don’t have the equipment, then I advise you to read -.

Also, if you don’t want to go through the hassle of setting up and purchasing equipment, there is a cloud mining solution -.

Video of this article coming soon - how to create mining.
Mining is developing in Russia, so develop with us in 2020, good luck to everyone in mining, now you are not a mining novice!!!

If you have a card less than 3 gigabytes, then you can choose a different algorithm, list - .

Write questions in the comments.

You can also ask your questions on the forum, and you will definitely receive an answer -.

Alexey Russkikh

If you are stuck in 2010, when mining at home was still relevant, then this article is especially for you. Now we will talk about whether it is possible to mine digital currency at home, how to do it, and whether mining cryptocurrency on a home PC is even profitable.

How to start mining on your home computer in 2019

If you are a beginner and don’t know how to approach cryptocurrency mining, what to do and, in general, why it is needed, then mining at home is a great way to learn all this.

Briefly about where to start mining:

1. Select a cryptocurrency.
2. Open wallet.
3. Select a service.
4. Download program.
5. Start mining currency.

Since it is impossible to mine cryptocurrency alone without large capacities, home miners often join together in pools. These are several machines that combine their efforts to find the required block. After this block is found, the reward is distributed according to the capacity.

Read more in our article:

For those who don’t understand anything about mining, there is a service called Kryptex. It allows you to download a program that will mine cryptocurrency in the background and exchange it at the current rate. On a powerful PC you can earn up to 4 thousand rubles per month.

It makes sense to do mining on a home computer only if you don’t understand it at all. For beginners, this will be an opportunity to learn the ins and outs of cryptocurrency mining first hand.

How much can you earn

Now to the question of possible earnings with a regular computer. Modern cryptocurrencies require power that can be provided by only one computer part - a video card. You can forget about cryptocurrency mining and your hard drive. And therefore, how much you get per day directly depends on the power of your video card.

Geforce RTX is best suited for mining now (August 2019). For example, a 2080 Ti video card. An unoverclocked card brings in about $1 a day. If you overclock and connect normal equipment, the figure will be approximately $1.7/day with proper luck. And this is if the computer runs 24/7. Agree, not the most impressive figure.

If you want to see how much a particular video card will bring, use ours. Select your card and see the indicator for each algorithm.

Having determined the hashrate, you can fully calculate the payback period of your card on the Whattomine service - http://whattomine.com/calculators. Additionally, you must indicate the price for electricity and the power of the device. The service periodically updates information (including increasing the difficulty level, reducing the fee for decrypting blocks), so you don’t have to worry about the relevance of the data.

Example of payback when mining Ravencoin (June 2019):

Why you shouldn't mine on laptops

Now a little about mining on laptops. In 2010-2011, it was possible to mine cryptocurrency on almost everything. Probably, somewhere there would be craftsmen who could make a farm out of toasters. But now everything has changed a lot. There are a lot of miners, the algorithms have become more complicated, and now in order to mine 1 bitcoin a day you will need a computer of crazy power.

It is not profitable to mine on a laptop. From the word absolutely. Especially in Russia. With the jump in the dollar, technology has become very expensive indeed.

The price of a minimally suitable laptop for mining starts from 60-80 thousand rubles. Moreover, such models will most likely have to be connected to additional video cards in order to receive at least some income.

PC or farm - which is more profitable?

Mining at home is an extremely unprofitable idea. And this is due to two factors at once:

• home PCs and laptops have extremely low power for full-fledged mining;
• Electricity at home is quite expensive.

As mentioned above, to mine cryptocurrency you only need a video card. That is, if you buy a full-fledged gaming, powerful computer, the cost efficiency will be 30-40%. And this is a very unprofitable investment.

And if you add to these costs the increasing costs of software, electricity and a cooling system, it turns out that mining cryptocurrency on a home PC is 3-4 times more expensive than a regular farm.

A few numbers. In order to assemble a PC that supports 2 GeForce RTX 2080 video cards, you will need about 150 thousand rubles. A full-fledged farm with 4 RTX 2080 cards costs approximately 200 thousand rubles. That is, 2 times stronger mining power costs only 25% more. And the worse the PC, the greater the difference.

This is why mining bitcoins, ether, litecoins and other expensive currencies on a home PC is now simply unprofitable. Let's look at alternatives to mining cryptocurrency on your home PC.

Home PC alternative

There is also another option - . It works on the following principle:

1. A large company purchases equipment.
2. Configures it specifically for mining.
3. Sells power to ordinary users.

Essentially, this is renting the power of a mining farm without additional costs. You just buy a certain% of the equipment's productivity together with other people, paying for its work. This is beneficial for those who do not have the money to buy a full-fledged mining farm.

You can use the services:

1. Genesis is one of the leading providers of remote mining power.
2. HashFlare is a cloud mining service that allows you to remotely mine digital currency. You can choose from several coins: Bitcoin, Ethereum, Zcash.
3. IQmining is an online mining market that appeared in 2016. The equipment is configured to mine the most profitable altcoins with subsequent exchange for bitcoin.

Cloud mining generates income of approximately 1% of daily costs. That is, the payback period is approximately the same as for full-fledged farms - 100-120 days. The only difference is that cloud mining requires from 2 to 200 dollars, and a farm will cost 3-4 thousand.

Related video (NiceHash Miner):

Conclusion

Technically speaking, you can now do mining at home. The only problem is that due to the large number of miners, more and more powerful equipment is needed, and ordinary computers are no longer able to cope with such loads properly.

Many reputable economists recognize that the emergence of cryptocurrencies could become the starting point for radical transformations of the entire global financial system. But financial technology is not the only area where it has created an incentive for development and improvement. Another direction is the extraction of bitcoins, known to us as mining.

Indeed, the evolution of devices in just a few years is astounding. In fact, in just three years, the coin industry has created a new class of computing machines and gone from the long-obsolete 130 nm process technology to the cutting edge of modern electronics.

In the first part of the article, we will talk about the development of mining technologies from the launch of the Bitcoin system to the start of mass production of specialized devices.

Despite the fact that more than half of the existence of Bitcoin, mining took place on general-purpose computers, we will not dwell on a detailed description of this process. It is unlikely that you will be interested in reviews of the most ordinary processors and video cards.

But the history of the rapid development of ASIC miners, fierce competition, the rapid enrichment and ruin of manufacturers, the development of enthusiasts and squeezing out all the possibilities from new and old hardware is actually fascinating, even for those who once took part in it and now, in the noise of the fans or the murmur of the cooler, continues to mine new coins.

Start. Mining on processors

It’s easy to guess who became the very first miner in the history of Bitcoin. Of course, this was the creator (or creators) of cryptocurrency - Satoshi (Satoshi) Nakamoto. It is widely believed in the community that Satoshi has been mining alone for a long time and has more than a million BTC in his wallets.

However, it is very difficult to substantiate this opinion with facts. The only evidence given is that all these coins have not yet begun to move. But there may be reasons for this.

We will operate only with known facts. Between the creation of the genesis block on January 3, 2009 and the publication of the first client of the Bitcoin v0.1 network, only 15 blocks were mined - from 0 to 14. Thus, “guaranteed” premine Satoshi is only 750 BTC. Then other miners could compete with him.

Now these people are called “early adopters”. Most of them are unknown to the community. The first transaction on the Bitcoin network occurred 3 days later - January 12, 2009 between Satoshi and Hal Finney in the amount of 10 BTC. A total of 5 transactions were made from this address, undoubtedly belonging to Satoshi, on the same day, totaling 32 BTC.

From a technical point of view, Bitcoin mining on processors is not of interest - this is a common operation of calculating hashes using the SHA256 algorithm, which is also performed in many other cases not related to cryptocurrency.

Satoshi probably did not imagine how quickly the mining industry would begin to develop. It was mining on PC processors, the most widely used chips in the world, that was supposed to make Bitcoin truly decentralized. There is only one vulnerability here - to botnets, which can force the computers of tens of thousands of users to mine with one wallet.

While cryptocurrency remained a hobby for geeks, CPU mining was not very popular. The first change in Bitcoin difficulty, which showed that several hundred processors were already mining, happened almost a year after the creation of the genesis block - on December 30, 2009.

The largest increase in difficulty in one recalculation - 4 times - happened on July 16, 2010 in block 68544. This happened as a result of a publication about Bitcoin on July 11 on the site Slashdot, popular among geeks. In just a few days, the number of Bitcoin users, and therefore miners, has grown many times over.

Farmers' competition. Mining on video cards

By the summer of 2010, the popularity and exchange rate of Bitcoin had grown so much that its mining began to generate real income, albeit modest. In July, 1 BTC was worth about 10 cents, that is, mining one block brought about $5. Mining began to move onto a commercial basis, which means that competition could not but lead to a technological race.

On July 18, someone named ArtForz launched a GPU mining rig for the first time and mined the first block using parallel computing implemented in the OpenCL driver. Thus began the era of industrial mining.

The transition to video cards was a huge leap compared to the “classic” processor - not only does one video card count several tens of times more hashes than the processor, but even then it was possible to install up to 4 video cards on one cheap motherboard, and later – up to 6 , with a limit of 8 GPUs (one dual-processor card counts as two GPUs). A computer even with two processors in a minimal configuration costs almost the same as a farm of several top-end video cards. Thus, video cards immediately take second place.

But for some time, GPU mining programs remained unavailable for mass use. Only in September 2010, a CUDA-based miner was published for nVidia cards, and in October - for ATI Radeon based on OpenCL.

On September 18, the first in the history of cryptocurrency, Bitcoin.cz, known as Slush's pool, opened. It still operates today, and its creator, Czech programmer Marek Palatinus, is still an active member of the community. In early January 2011, the pool gained capacity at 10 GHz/s, which now seems ridiculous, but then the difficulty of mining Bitcoin barely exceeded 10,000 - only 5 million times less than now!

On February 9, 2011, the Bitcoin rate on MtGox was equal to the dollar, and in several months without stopping it surpassed the $20 level. Mining one block now brought in $1,000, and almost $150,000 was mined per day.

Feeling the easy money, miners around the world rushed to buy video cards. Competition grew, difficulty continued to rise, reaching 1,000,000 by mid-June. However, the hack of MtGox, and then several other services, caused an outflow of Bitcoin users and a decrease in mining capacity, which continued until the fall.

On August 23, 2011, the first block was mined by a decentralized pool - P2Pool. Unfortunately, due to the complex setup and instability of mining, most miners still prefer centralized services, and p2pool drags out a miserable existence, very rarely mining more than 1 block per day.

On October 7, 2011, Litecoin was launched - the first to use an alternative hashing algorithm. It was intended to stop the dominance of video cards and give a chance to CPU mining. Ironically, 2 years later it was LTC that became a refuge for video card miners fleeing the ASIC invasion. We will talk about this in another article.

For almost three years, video cards reigned supreme in mining. On November 28, 2012, the first halving of the block reward took place - from 50 to 25 BTC. But it did not stop the gradual increase in complexity. At the beginning of 2013, despite a slight correction, it fluctuated around 3,000,000. However... this was only preparation for a new jump.

Smaller, cooler, more powerful. FPGAs come and go

Back in 2011, some enthusiasts began to realize that video card farms consumed too much electricity, required constant attention and additional costs. They began looking for a solution that could cut costs.

At that time, the most obvious was the use of FPGA chips - less versatile than CPUs, but more energy efficient. It was much easier to parallelize them on one board, and the requirements for power lines and cooling were noticeably reduced. The final device was quite expensive, but much more compact and stable than a video card farm. And the gain in energy consumption was thousands of percent.

And yet, video cards remained the most widespread solution, cheap and accessible. There weren't many people back then willing to pay several thousand dollars for a device with very limited use. FPGA miners did not last long and remained a niche product that did not play a significant role in mass mining. But these developments were later useful to manufacturers of ASIC miners, since the board layout, device layout and software were very similar.

Among the manufacturers of FPGA miners, two companies can be noted that later took a much more prominent place in history:

• Swedish KnC Miner, founded in September 2012, with its 6 GHz/s KnC Mars
• American Butterfly Labs with two devices: with a hashrate of 832 MH/s and a Mini Rig with a hashrate of 25 GH/s.

For that time, this was very powerful equipment, consuming only 20 W per 1 GHz/s - 20-30 times less than a similar farm of video cards. But it cost accordingly: they asked for $6,000 for Mars, and $15,000 for Mini Rig. The number of devices released was not published.

All other manufacturers were unable to recoup the costs, much less the development of new chips. Over time, they all closed. The payback of FPGA miners raised many questions, but those who received them before the beginning of 2013 had every chance, if not of excess income, then of a decent profit.

Advent. The first ASIC miners

Unlike FPGAs, which are mass-produced and used for a wide variety of tasks, ASIC (Application Specific Integrated Circuit) chips can perform only one task for which they were designed. But they perform it much better than any general-purpose processor - the difference in performance of devices similar in other parameters can differ tens of times.

There is also a downside - just designing and producing a prototype ASIC chip using modern technologies costs several million dollars. This is a long and labor-intensive process, the positive result of which is not guaranteed by anyone. In addition to the chip itself, the developer has to do everything - from the motherboard, the “piping” and the cooling system to the software, and then carry out all stages of testing.

The most far-sighted manufacturers began developing specialized chips as soon as the first FPGAs went into production - that is, in the summer-autumn of 2012. And the most enterprising decided that there was no need to take all the risk on themselves - buyers could easily pay for it. This is how pre-orders for ASIC miners appeared.

The first well-known trio of ASIC creators were two Chinese companies - ASICminer and Avalon and one American - BFL (Butterfly Labs).

The creators of the first ASICs, from left to right: Sam Cole (KnC Miner), Josh Zerlan (Butterfly Labs), FriedCat (ASICminer) [allegedly] and Yifu Guo (Avalon)

In the photo you can see four people - probably the most famous during the "ASIC revolution". It was made in Singapore in August 2013, and is truly unique - this company has never come together again. Remember these names and faces. Hundreds, if not thousands of buyers of ASIC miners dreamed of having a heart-to-heart talk with these people wholesale and retail.

But let's talk about each of the manufacturers in order.

ASICminer

This company with a self-explanatory name was founded on July 18, 2012 by three Chinese citizens. She collected investments through public forums, but not from the first people she met.

ASICminer's approach to customers was completely different from that of other manufacturers. For a long time they did not trade retail, but focused on large investors who received their share of shares. These shares began to be traded on the open market only after the main investors received their share of the profits. Company representatives answered absolutely all questions, including those related to deeply technical issues.

The identity of the main founder and inspirer of ASICminer still remains unknown - in the community he is known only by the nickname “FriedCat”. Perhaps he is not Chinese, although he managed to settle down and build a business in this country. Company employees do not betray their boss.

At the beginning of 2013, ASICminer developed a chip using the 130 nm process technology, which has long been outdated in consumer electronics. It was chosen due to its relatively low costs - a total of $150,000 was spent on the development of a completely new ASIC.

The first generation miners from ASICminer were implemented in the form of Blade Block Erupter boards with good characteristics at that time: a hashrate of 10 GHz/s and power consumption of about 100 W. The energy efficiency indicator, despite the crude process technology, was twice as good as the most modern FPGAs.

Block Erupter boards could be installed several times in one case, compatible with standard 19" server racks. It was ASICminer that became the first company to open a special data center for mining.

In the spring of 2013, the first batch of devices were installed in it, which were sold out in 1 hour at a price of $12,500 by the company’s shareholders. Their total performance was up to 40 Th/s, while on January 1, 2013, the hashrate of the entire Bitcoin network was about 25 Th/s. This data center held the absolute leadership in Bitcoin mining for several months, ahead of the largest pools.

Blade Block Erupter v.2 was sold in April for $7,500 on the open market. The miner turned out to be successful, so the company decided to improve the ASIC and in the summer began large-scale sales of the ASICminer Cube at a price of $7,000. Its characteristics: 30-37 Gh/s and 430 W.

Simultaneously with Blade Block Erupter, a portable version was released - USB Block Erupter with one chip, in a case similar to a flash drive. A key fob with a capacity of 330 MHz/s was first sold for 1 BTC and at first the demand was frantic - they were bought in dozens and connected via USB hubs in whole bunches. However, the idea was unsuccessful, miners rapidly became cheaper - in a few months their price collapsed 30-40 times. Now such an interesting device can be bought on Ebay for a few dollars. This souvenir is also suitable for studying the operation of ASIC chips and the design of the circuit.

By the end of the summer of 2013, ASICminer was forced to retreat under the pressure of competitors - its chips quickly became outdated, and the development of new ones was slow. Stocks were falling. The company was able to return to the market only a year later, but soon closed completely after the mysterious disappearance of “Fried Cat” with a large sum of money. He was never found.

Avalon Project

Avalon sounds dignified, doesn't it? That's right, this company has a lot to be proud of. It was founded by Yifu Guo in September 2012.

Despite the fact that Yifu is a purebred Chinese, the association of his company with the fabulous city of King Arthur suggests that he is well acquainted with European culture and was counting primarily on European and American buyers.

The Avalon team began developing chips at the same time as competitors, but produced only limited quantities at a high price. The so-called "butches" from Avalon stirred up rumors and legends in the community. The first ASIC miners were released using the 110 nm process technology, with a default hashrate of 60-65 GH/s (82-88 GH/s overclocked) and power consumption of about 700 W.

The release of the first generation took place in three stages:

• The first batch of 300 devices was sold at the very start - in 2012 for $1,300, when the idea seemed too bold and the start of pre-sales did not cause much excitement. Buyers received the miners in February-March 2013. They paid for themselves literally in a matter of days and began to generate net profit. The owners of the first batch from Avalon really got rich, and their example became a bait for buyers of subsequent batches. But they were much less fortunate.
• The second batch, already consisting of 600 miners, went on sale in mid-February for $1,500 (at the exchange rate in bitcoins - about 50 BTC at that time) and was sold out in a few days, despite the generally accepted skepticism about ASICs at that time. Here, buyers were much less fortunate - the devices arrived with a long delay and had already been used. However, they turned out to be a good purchase. Read a detailed review of one of them.
• But the third batch, also of 600 pieces, greatly tarnished the manufacturer’s reputation. Firstly, the price has risen almost 5 times – 75 BTC at an average rate of about $100. And secondly, the delay in deliveries turned out to be even greater - many buyers received their devices in July and even in August, when the complexity increased many times and second-generation ASICs entered the market. Most owners of third-party Avalons lost money and, not without reason, blamed the manufacturer for this.

Miners from Avalon work stably, but unfortunately the manufacturer uses an unsuccessful TP-Link controller, which is distinguished by its imperfections and constant freezes. This drawback has accompanied Avalon devices for many years. However, the company did not slow down and is still in business after its transformation into Canaan Creative, although it has lost the advantages accumulated at the beginning - now Avalon is just one of many manufacturers.

BFL – Butterfly Labs

The BFL company, also known as “Butterfly” and “Granny Labs”, is one of the most controversial in the history of mining; its name has become a household name to describe an unreliable supplier that does not fulfill its obligations. It has undoubtedly and by a significant margin secured its place as the best manufacturer of pre-orders for ASIC miners. But getting ready-made devices turned out to be much more difficult.

Butterfly Labs became the first manufacturer to begin pre-sales of ASICs. Confidence in success was inspired by previous developments in the field of FPGA miners, which were delivered on time and performed well. In June 2012, the company offered customers the following model range:

1. Jalapeno for $149 and 4.5 GHz/s performance
2. SC Single for $1299 and 60 GHz/s performance
3. SC MiniRig for $30,000 and 1,500 GHz/s performance

On the very first day, pre-orders worth $250,000 were purchased, and in the future the interest of “investors” did not fade away for a long time. The chips were promised with a 65 nm process technology, energy efficiency of 0.9 W at 1 GHz/s and in a QFN package.

But when we got down to business, it turned out that creating an advanced ASIC was much more difficult than collecting pre-orders. Shipping dates were postponed many times, energy efficiency changed to 5.5 W at 1 GHz/s, the package changed from QFN to BGA, and the power of SC MiniRigs decreased to 500 GHz/s - instead of one “box”, customers were promised 3!

The Internet was full of angry reviews, because the company did not always communicate the reasons for the next missed deadline, and very few lucky ones managed to receive compensation. The phrase “just two weeks”, with which BFL PR director Josh Zerlan tried to reassure clients, became popular among miners.

The first Jalapeno devices appeared in reviews at the end of April and began to arrive to customers only in May 2013, and mass shipments began in June - July. In August, the increase in complexity reduced the profitability of BFL devices to the breakeven point. And those who stood at the end of the line received orders in the last months of 2013, when miners from BFL, compared to competitors, were suitable only as electric heaters.

In August 2013, the company announced a unique 28 nm ASIC - Monarch, made in the format of a video card, inserted into a regular PCI-e slot of a personal computer, but with an external power supply. The second delivery option was with a USB connection. Monarchs were sold at the following prices: 300 GH/s for $1,497 and 600 GH/s for $2,196.

Unlucky customers who were still waiting for Single and MiniRig ordered a year ago were offered to convert their orders to Monarchs with an additional payment and wait another N*"just two weeks". There are already few such people. In March 2014, deliveries of Monarchs did begin, but in very limited quantities. Butterfly Labs no longer had the funds for mass production.

The company faced several lawsuits from customers for delays and refusal of returns, and at the end of 2014 it was closed for several months by the FTC - the US Federal Trade Commission. But in January 2015, she even issued a certain amount of compensation.

The future prospects of Butterfly Labs did not inspire optimism - the trust of the community was completely lost, except for small improvements to the Monarch, there were no new developments. BitSafe has not left the testing stage. Soon, the “grandmother” of cryptocurrency mining quietly died.

But the mining story doesn't end there. To be continued…

Bitcoin mining in 2018 is a process that has been the subject of much discussion in the cryptocurrency community. With the rise in the price of BTC, network users have confidence that the extraction of virtual currency is profitable, and the purchased equipment pays for itself in a short time. But is it?

Mining efficiency is a multifaceted parameter that takes into account not only the cost of the instrument, but also other factors - trends in the field, the attitude of government authorities towards cryptocurrency, and so on. Only with a comprehensive assessment can one say whether BTC mining will be a profitable endeavor or whether it is better to abandon it. Below we will look at how cryptocurrency is mined, what are the features of this process, and what equipment is best to use.

Prospects for Bitcoin mining in 2018 - brief analysis

In 2017, the value of Bitcoin increased by more than 20 times, which prompted many investors to purchase cryptocurrency, and miners to search for and purchase suitable equipment. This is not surprising, because in December 2017, the BTC rate reached $20 thousand, which significantly exceeded the expectations of the crypto community. Despite the recession that occurred at the beginning of 2018, interest in cryptocurrency has not decreased.

Until the beginning of April 2018, the Bitcoin rate was falling and even reached $6.5 thousand, but after that a bullish trend began and the price confidently went up. As of April 24, 2018, the price of Bitcoin is already $9,226 per coin. This means that in just 20 days the price has increased by 50%. This growth caused another wave of excitement among investors and people aiming to personally obtain virtual money.

Bitcoin exchange rate online chart:

Bitcoin mining in 2018 has the following features:

1. The block reward is 12.5 coins. Another reduction in the premium occurred in 2016. Network participants have two more years until the next reduction in the premium by 2 times to 6.25 Bitcoins.
2. The difficulty of mining is growing all the time. If at the beginning of 2017 it was 317 Gigahashes per second, at the beginning of 2018 this figure reached 1.88 Terahashes per second. Despite the depreciation, the complexity continues to increase. As of April 24, 2018, this parameter is equal to 3.84 Terahashes per second. In just 4 months of 2018, the difficulty has doubled. This means that the requirements for equipment for cryptocurrency mining have also increased. The result is obvious - the equipment that is relevant in 2017 today does not give the expected result and payback. For example, farms on video cards (even modern ones) do not provide adequate profit. The only way out is to use ASIC miners, which we will discuss below.
3. The cost of mining equipment has increased significantly due to growing demand. New video cards and ASICs are sold out immediately after release or are ordered in advance. For example, to create you will need at least 10 video cards, each of which costs from 300 to 1000 dollars. As for ASIC miners, one device costs 2–5 thousand dollars. You can imagine the costs a network member incurs to put together a profitable farm.
4. Electricity costs. Electricity prices are rising every year. At the same time, the payback of mining depends on the region where the equipment is installed and operating. For example, in the Kamchatka Territory, 1 kWh will cost 8,174 rubles. While in the Rostov region the tariff is much lower - 3.6 rubles. Each region has individual prices for electricity, which is worth considering when starting Bitcoin mining.
5. Additional expenses. When purchasing equipment, the miner makes calculations at the current time (taking into account the current price, complexity and other parameters). For example, as of April 24, 2018, the average ASIC miner shows a payback period of 6–10 months. Within 1–2 months, this parameter will be adjusted downward or upward, because the difficulty of production will change, as well as the price. The miner will have two options - accept the new payback period or buy additional equipment, and these will be new expenses. Consequently, the cost coverage point may move further or closer (depending on the situation in the cryptocurrency market). Experienced network participants assure that the resulting return period for the invested funds must be multiplied by at least 1.5 times.

From the above, it is clear that the prospects for BTC mining are questionable, because the result directly depends on the power of the equipment used and a number of other factors (price, complexity, cost of electricity, and others). But this does not mean that this type of income should be abandoned. With the right approach, you can count on stable profits and payback throughout the year. But more on that below.

Bitcoin mining - what is it in simple words

The theoretical part is considered the basis of any earnings. Mining virtual coins is no exception. Before you start mining Bitcoins, it is important to understand the essence of the process and its features. BTC mining is a mathematical operation that is performed by special equipment to select the hash of the next block of the blockchain chain. The more power the mining equipment has, the faster the options are sorted through, and the higher the probability of finding the required number.

In other words, Bitcoin is a chain of blocks, each of which contains a cryptographic signature created on the basis of the previous blockchain element. During the mining process, the chain is divided into several branches, but the branch on which a larger number of miners are working is recognized as valid.

Let's summarize - what is the essence of Bitcoin mining, and what is it in simple words. We noted above that each block of the chain contains a cryptographic signature - this is what miners need to find. The network participant who solves the given problem receives a reward. In 2018 and the next two years, the premium will be equal to 12.5 coins. In 2020, this figure will be halved.

The calculation of the next block depends on the complexity of the network, which changes every 2016 blocks. On average, it takes about 10 minutes to create one element, and the difficulty increases every 2 weeks. The difficulty parameter depends on the speed at which blocks were mined in the past period of time. What does it mean? If a powerful ASIC miner with a higher hashrate appears in the hands of users, the complexity of the system increases. This is a protective reaction of the network, thanks to which the average block mining time remains unchanged.

In other words, Bitcoin mining is the creation of blocks (chain elements) or new coins. Such work is necessary for the cryptocurrency network, because it ensures confirmation of transactions, protects the Bitcoin chain from attacks, and also supports decentralization. A transaction carried out between two participants is reflected in the block after confirmation of validity. If the miner accepted the transaction and added it to the next element of the chain, the coins become available. As a rule, full validity is recognized after six blocks received (sometimes two).

It is impossible to hack the system, because to do this you will have to make a change to the entire blockchain chain, which has been formed since 2009 and is in the form of copies on tens of millions of computers in the world. This is a huge job that requires a large injection of funds and does not make economic sense.

How to mine Bitcoin - step-by-step instructions and methods

Knowing the risks of cryptocurrency mining and understanding the nuances of Bitcoin mining, you can get to work.

Deciding on a mining option

The first step is preparatory. It is important to decide on the method of mining cryptocurrency:

1. Solo mining- mining coins outside the pool, using your own facilities. Just 3-4 years ago, this method of earning money gave results, but today it makes virtually no sense. The reason is the increasing difficulty of mining virtual coins and high competition from large pools. The likelihood that one miner will find the required hash is extremely low. Even when purchasing powerful equipment, the payback period reaches 2–3 years (at best).
2. Work in the pool. A wiser solution is to connect to one of the servers, where thousands, or even tens of thousands of participants join together. For the cryptocurrency network, the pool is perceived as one miner, which increases the chances of creating the next block and making a profit. Earned coins are divided between participants taking into account the payment scheme used in. We will talk in more detail about choosing a service for BTC mining below.
3. Cloud mining. This is an alternative option for people who do not have 3-5 thousand dollars to buy equipment, but dream of making a profit from mining virtual coins. Cloud services are sites representing companies producing Bitcoin and other cryptocurrencies. Employees of such organizations buy equipment, configure it, pay money for electricity and solve other related problems. Clients simply buy power and use it to mine virtual coins.
   The cost of services depends on the company. For example, more than a million people participate in genesis-mining.ru. The cost of services starts from $179 per 1 Terahash per second. You can consider other options, for example, hashflare.io. Here the cost of 10 Gigahash per second will cost 60 cents. If you take 1 Terahash per second, the cost will be $600. The advantages of this solution are the possibility of remote mining (without spending money on equipment), low requirements for initial capital and the ability to earn money without special knowledge. The danger is that when working through cloud mining, you can fall for scammers. If you choose proven services, their capacity is almost always sold out. Another disadvantage is the fees that the company charges to cover expenses.

Choosing equipment

Before mining Bitcoin, it is important to decide on the equipment for work. This is relevant if the first two options are selected (solo mining or mining in a pool). Generally speaking, a network participant has four options:

1. HDD. In 2009–2011, network participants mined Bitcoins on computer HDDs. The use of this method made it possible to save costs and speed up equipment setup. With the increase in complexity, mining on HDD has lost its relevance, and the costs have ceased to pay off.
2. Processors. During the same period (until 2011), many miners used CPUs to mine cryptocurrency. As in the case of HDD, this method of earning money quickly became useless and has not been used for 6-7 years.
3. Video cards. Until 2012–2013, a powerful graphics processor installed in a PC was enough to mine BTC. With the advent of ASICs in 2014, this approach ceased to be profitable. Miners chose a different path - they began to assemble farms on GPUs. At first, up to 4–6 video cards were used, and in 2016–2017 their number increased to 10–16 units. This mining method suffered the same fate as previous methods. In 2018, it is still possible to mine BTC using GPU farms, but the amount of profit received is not commensurate with the costs of purchasing and setting up equipment. Even when using modern graphics cards such as GIGABYTE GeForce GTX 1080 Ti or mining efficiency will be low. In addition, the situation is not limited to the purchase of video cards - you will need a full-fledged PC, the purchase and arrangement of racks, the organization of cooling and other expenses. The final costs reach 5–7 thousand dollars (sometimes more), which forces network participants to look for other options.
4. ASIC miners. The best way to earn Bitcoins in 2018 is to give preference to ASICs, which are characterized by high performance, lower energy consumption and reliable operation. This is a compact device designed specifically for mining virtual coins. With the growing demand for such equipment, the number of offers on the market is also growing. For example, on April 24, 2018 it costs $1,288. Its power reaches 14 TX/sec. If you calculate the profit on the specified date, it will be $210 per month. This means that the ASIC’s payback will occur in 7 months. Even taking into account the growing complexity, the ASIC miner will pay for itself within a year. In addition to the mentioned ASIC miner, you can consider other options - Canaan AvalonMiner 821 (12.1 TH/sec) or Ebang Ebit E 10.1 Miner (18 TH/sec).

Let's start a wallet

The next stage that needs to be completed is to select and create a wallet to store the earned cryptocurrency. Here it is important to take into account the ultimate goals of cryptocurrency mining. If the task is to accumulate and store BTC coins for a long time, paper or hardware storage is suitable. If the received Bitcoins will be spent or exchanged for other virtual money, an online, mobile or local wallet will be more suitable. In terms of reliability and convenience, the best options are Electrum () and Bitcoin Core ().

Choosing a pool

Pool interface pool.viabtc.com

To achieve the best effect, it is important to choose the right pool for mining virtual coins. When searching for a pool, you should focus on the reliability of the site, reviews, overall hashrate and method of payment of rewards. As of April 2018, the most popular sites include:

• pool.btc.com;
• antpool.com;
• pool.viabtc.com.

They form the top three among all pools. Among domestic miners, slushpool.com is also in demand, which has a Russian interface and is easy to use.

Registration in the pool

Fields to be filled in when registering on the pool.viabtc.com site

Before you mine Bitcoins, you need to register in the selected one. Each site has individual approaches, but the general idea boils down to specifying a mailbox and password, followed by confirmation via a letter that arrives by e-mail. After activation, the user receives login information and can start earning cryptocurrency.

Enter payment information

Example of a Bitcoin wallet address

The next step is to indicate the information where the money should be transferred. For example, after registering with slushpool.com, you need to go to the settings section and add a Bitcoin wallet (specify the key for making payments). In many pools, you need to set a parameter at what number of accumulated coins to make payments. Here you should not ask for a large amount - it is better to withdraw money immediately, without trusting online services. On the other hand, you need to take into account the commission that is charged for the transaction.

We provide security

Mining pools are most often targeted by hackers. In order not to be left without money, it is important to make sure that the pool you are using has SSL encryption. The easiest way is to look at the icon in the address bar of your browser. The inscription “https” in front of the main domain indicates the presence of such a protocol. Additionally, many pools offer 2-factor authentication. If it is provided, it is important to activate it. In this case, it will be more difficult to hack the miner’s account.

Choosing a program for mining Bitcoin

CGMiner program in working mode

The next stage is choosing a mining program. This is special software, “tailored” specifically for the extraction of virtual money. When mining using ASICs, additional software may not be required (if it is included). It’s another matter when a video card farm is used to earn Bitcoin. Here you can use the following options - CGMiner, BFGMiner, MultiMiner and others. The advantages of these programs are the ability to mine on ASICs and video cards, ease of setup and the ability to use different strategies for mining virtual coins.

Last steps

The preparation work is almost done. It remains to take the last steps:

1. We configure the pool, specify the username and password, and then select the equipment used (if required).
2. We keep the mining process under control, evaluate the hashrate, and look for problems with the connection.
3. We optimize the process. Some ASICs and video cards have the ability to overclock. If you have the necessary knowledge, do this work.
4. Evaluate production efficiency. The first conclusions can be drawn in approximately 20–30 days. If necessary, you can change the pool or increase the power of the equipment used.
5. Monitor the heating of the equipment. The mining process involves round-the-clock operation of ASICs or video cards. To avoid overheating and failure of expensive equipment, it is necessary to control the temperature and provide additional cooling, if required.

Above is how to start mining Bitcoins for beginners. Before starting work, it is important to study information about mining, assess the level of payback (taking into account the increasing complexity and trends in the cryptocurrency market) and try not to skimp on quality equipment. It’s better to spend more money and take equipment with a power reserve than to find out after 3-4 months that an ASIC miner or GPU farm does not give the expected result. It is important to understand that to earn money you need investments. This is true even in cases where preference is given to cloud mining.

After getting acquainted with digital currency, many users have a question about which electronic money is most profitable to mine, as well as where and in what way. This material discusses the most profitable option to date.

Let's start with the fact that every couple of months the profitability of mining decreases due to the fact that more and more people learn about it. The Bitcoin exchange rate, which has dropped by more than two times, has recently made its contribution. For comparison, in winter, the most profitable video cards from a mining point of view could be repaid in two months, but now this process takes 6 months or more.

Does this mean that the train has left for good? We won’t speculate on this topic, but in 2009, Bitcoin mining was also absolutely not profitable, and just a couple of years later, people who spent several weeks mining coins earned quite a lot of money from the jumping value. It is possible that the prices of Bitcoin and other cryptocurrencies will experience several more jumps in the future, and a small number of coins by current standards could pay off handsomely. But again, no one can give any guarantee that this will bring dividends.

Everything written below will be devoted to the most effective way to obtain coins and answers to the questions: what to mine, where to mine, how to mine, and to some extent, what exactly to mine. There is currently no more profitable mining method within an error of a few percent.

So let's start with question number one.

It is very difficult to answer this question. And no matter how trivial it may sound, the best way to mine is probably Bitcoin – primarily from the point of view of reliability. On the other hand, all other things being equal, the coefficient of increase in its price will most likely be lower than that of one or more altcoins, which currently cost literally pennies. Among alternative securities, at the moment it is worth taking a closer look at Litecoin, Dogecoin and, possibly, Blackcoin. This is a subjective point of view, but it is these three digital currencies that currently have the best prospects.

You can view the list of cryptocurrencies yourself in these lists: coinmarketcap.com, www.cryptmarketcap.com.

What to mine?

Since this material is intended primarily for ordinary home computer owners, mining will be considered exclusively from the point of view of using video cards. ASIC boards for sha256 (bitcoin) are immediately avoided due to their high cost. ASIC boards for scrypt with decent performance have not yet appeared on sale, and it is unlikely that an ordinary user will want to immediately invest around $1000 in them (for boards with an average price/performance ratio). However, we will leave a link to the websites of manufacturers of the most promising ASIC boards for scrypt, just in case: zeusminer.com, www.kncminer.com/categories/litecoin-mining-hardware.

These boards are much more cost effective in terms of performance per kilowatt and require on average 20 times less electricity than a graphics card of comparable performance.

But let's return to video cards. The most profitable video card in terms of khash/$ or khash/watt can be selected in this table.

At the moment, in the performance/cost category, oddly enough, the leaders are not the newest models, but veterans in the form of Radeons 7870, 5970, 5870, R9 270X. However, it is worth noting that the absolute performance of these video cards is relatively low, and if you plan to install more than one card in your computer, the additional costs for a power supply, PCI-E risers, and possibly a new motherboard with several PCI-e slots can be significant and in this case it is better to immediately take something more productive - for example, the R9 280x.

A PCI-E riser is a 20-30 cm long cable that allows you to remove the video card, which improves its cooling, and connect PCI-E 16x video cards to the PCI-E 1x slot. At the same time, performance does not drop, since mining does not require intensive data exchange on the bus. Attention, connect PCI-E 1x adapters only to the appropriate connector and do not use it with a 16x slot, since the motherboard will try to supply additional power to the full-fledged slot via a limited number of pins and, most likely, will burn both the slot itself and the riser.

Where to mine?

Let's start with the fact that mining bitcoins using video cards is unprofitable. The easiest way to explain this is with an example. If you mine the most profitable altcoins at the moment and then exchange them for bitcoins, then on average you will get 50 times more bitcoins than if you mine directly.

What altcoins should I mine for this? Fortunately, you don't need to know the answer to this question. There are so-called Profitable Pools that automatically monitor the rate of altcoins and mine the most profitable ones at the moment, often switching between them literally every few minutes.

Recently, the number of such pools has been constantly growing, but only a few of them show good profitability indicators, which can be found on the PoolPicker website.

As you can see, the situation changes almost every day, and it is possible that the most profitable pool today will turn out to be the least profitable tomorrow. However, there is a simple answer. The recently launched NiceHash pool on average shows the best performance over several days. This is explained very simply. NiceHash is not just a pool, in the usual sense of the word, but a site where you can rent out the power of your computer, so the profit here is a little higher.

Renting does not in any way imply the use of your computer for any time required by the tenant. You start mining yourself when it’s convenient for you and you can turn it off at any time, so there’s no question of performing incomprehensible calculations on your computer. In reality, just like in traditional pools, you mine coins for the server, which acts as an intermediary to transfer them to the tenant.

The advantages of NiceHash include payments that occur 4 times a day, while other pools usually do this once a day, and then only if there is a certain amount on the balance.

If, out of interest, you want to find out and calculate the profitability of coins yourself, then this can be done using the sites: www.coinchoose.com/litecoin.php, www.coinwarz.com/miningprofitability/litecoin

How to mine?

Let's look at mining using NiceHash as an example. Setting up another pool is fundamentally no different.

First, you will need the Sgminer program, since Cgminer with NiceHash does not work and gives a Rejected error. Only the client source code is available on the official Sgminer website, which you can compile yourself if you have the required knowledge, and the finished version of Sgminer for Windows can be downloaded from sgminerwindows.

To work, you will also need a Bitcoin wallet, for example, MultiBit.

Registration on the NiceHash pool is not required, since the Bitcoin wallet address is registered as the username, which can be viewed in MultiBit.

To start mining, you need to create a bat file with any name next to the sgminer.exe executable file, for example NiceHash.bat. The contents of the bat file should be approximately as follows (one line):

Sgminer -o stratum+tcp://stratum.nicehash.com:3333 -u 1FL7DA4QUTjuiMNeix2P3TDHvefnyw3Ek2 -p x —temp-target 80 —auto-fan

-o stratum+tcp://stratum.nicehash.com:3333 — pool address

-u 1FL7DA4QUTjuiMNeix2P3TDHvefnyw3Ek2— username, and in this case Bitcoin wallet address

-p x— a password that can be used as anything

--temp-target 80 --auto-fan -- sgminer will take over control of the cooler and will maintain the temperature of the video card no higher than 80 degrees

To improve performance, you can add the experimental kernelzuikkis activation to the line. This can speed up the graphics card by an additional 2.5%.

-k zuikkis

This kernel does not work well with all video cards, so before using it, compare the number of caches with and without it.

The bat file should also contain performance settings unique to each specific video card. You can view them. It’s even better to read the material to understand this issue in a little more detail.

It is advisable, although not required, to add a spare pool to the line. If NiceHash runs out of orders, the miner will be inactive, so it is recommended to register any other Profitable Pool as a backup.

After saving and running the bat file, the Sgminer window should look something like this:

Results

Buying altcoins instead of mining them involves a mechanism known as buying pressure. The presence of demand leads to the fact that offers with the lowest price are quickly sold out on exchanges, and the price begins to creep up. This leads to slow growth in the short term and increased prices by several orders of magnitude in the long term.

If some points in the text raise additional questions, also read the materials and.