What is Mining rig?
Since the inception of Bitcoin, mining rigs have played a pivotal role in securing and maintaining Proof of Work (PoW) blockchains. Although those who operate mining rigs are offering a service to the blockchain, they are often incentivized to provide this service through payments of the respective blockchain’s native coin. These computers perform complex computations via the respective consensus algorithm that then verify network transactions and data blocks. Depending on the blockchain, there can be a variety of mining rigs that will perform these tasks.
What is a Mining Rig
The three most common PoW mining rigs are ASIC (Application-Specific Integrated Circuit), CPU (Central Processing Unit), and GPU (Graphic Processing Unit) miners, and it is important to note that one type of mining rig can not necessarily mine all PoW blockchains. With regards to ASIC miners, they tend to be used primarily for Bitcoin mining. There are several networks that are CPU mineable, but one of the more popular coins is Monero (although it can be mined with a GPU, it is more efficient with CPU mining). GPU mining has had a long history of mining Ethereum, however Etherum recently completed the transition from Proof of Work to Proof of Stake and is no longer a mineable network. Since the Ethereum Merge, many GPU miners have redirected their hashing power (hash is the measurement used for determining how much mining power a rig has with a particular consensus algorithm) and now mine networks like Ergo, Flux, and Ravencoin, to name a few.
All these types of computers require energy commitments that need to be considered when determining cost and profitability. As was mentioned, ASIC mining rigs are typically used for mining Bitcoin. They are often very expensive and have immense energy requirements, especially when operating many of them in a mining farm. CPU and GPU mining rigs can be accessed and built more easily by your average consumer. They can still be tiered in sa eries to build a mining farm, but they are more approachable for the individual that is interested in earning passive income.
When it comes to profitability, cost and projected returns need to be considered. As was mentioned, Bitcoin ASIC mining rigs are very expensive (with significant energy consumptions), and in order to successfully mine Bitcoin, numerous ASICs are recommended. CPU and GPU mining rigs can be built at home using consumer grade computer hardware, and as a result they can be built on a stricter budget.
Why Do People Create Mining Rigs
So, let’s say you want to start mining? There are several factors when considering your projected returns. Are you looking to be a hobbyist miner because you believe in a project? Are you looking to make profit now? Or will you be treating your investment as a pseudo-futures contract? Either way you look at it, if you are building your rig or purchasing ASICs, your investment may not be immediately profitable - you will be paying back your investment in the short term. Even if you have a CPU or GPU mining rig ready to go, your electrical costs may put your operation at a loss in the short term. It truly depends on what coin you want to mine and whether you believe in the viability of a blockchain. If you decide to build a mining rig, it is recommended you fully research the cryptocurrency you are interested in to see what is being built. Does it have smart contract functionality? Is it decentralized? What are the tokenomics? Was there any pre-mining or pre-allocation of coins before network launch? How active are the core and community developers? What dApps (decentralized applications) are being built that may offer additional value to the blockchain?
These types of questions will help you gauge whether you see value in a project - regardless of the initial returns on profitability. Please note, this is not financial advice. It is difficult to predict the return value of a coin in the future. A project with innovative technology that is still building may not offer immediate financial returns, however there may be significant investment upside down the road.
What Types of Mining Rigs Exist
As was mentioned, there are several types of PoW mining rigs: ASIC, CPU, and GPU. Let’s dive a little deeper into the makeup of these various computers.
ASIC (Application-Specific Integrated Circuit) Mining Rigs
An ASIC Bitcoin mining rig is optimized to only mine Bitcoin. ASIC computers can be more easily understood by their name - an ASIC is an application-specific integrated circuit. This means that these computers are customized for a unique purpose, and are therefore optimized to perform a set task (or related functions). Thus, a Bitcoin ASIC miner is optimized to only mine Bitcoin.
GPU (Graphic Processing Unit) Mining Rigs
GPU mining rigs are computers that utilize the hashing power of graphics cards. They are often built with an open frame to maximize airflow and improve temperature regulation. The reason for this is because GPU mining rigs commonly have numerous GPUs connected to a single motherboard. When doing this, temperatures in and around the computer parts can significantly increase - GPUs produce a lot of heat while mining cryptocurrencies.
CPU (Central Processing Unit) Mining Rigs
CPU mining rigs are built to use the processing power of the CPU on the computer motherboard. There are several options for building your own CPU mining rig, including using a motherboard with either a single CPU slot or a motherboard that can handle multiple CPUs.
How to Build a Mining Rig
When considering building a mining rig, you first need to establish what coin you will be mining. There are numerous resources online to help you learn how to build your own DIY mining rig for either GPU or CPU mineable coins. A search on YouTube for “DIY mining rig” will return numerous results, and you can further clarify your results by specifying if you want to build a GPU or CPU mining rig. In some instances, you may want to build a rig that can dual mine CPU and GPU mineable cryptocurrencies. Please note that if you are interested in mining Bitcoin, your most efficient way of getting a Bitcoin miner is to purchase a dedicated ASIC Bitcoin miner. After deciding what kind of rig you want to build, you will then need to look into the software options for mining each respective cryptocurrency.
Features When Building a Mining Rig
Let’s say you decide to build a mining rig. If you wanted to build a GPU mining rig to mine a cryptocurrency like Ergo (the setup is similar for other GPU mineable cryptocurrencies), you will need the following:
- PSU (power supply unit) and compatible power cables (these will come with the PSU you purchase)
- A motherboard with multiple PCIe ports
- A CPU compatible with the motherboard you chose (looking up the specifications for your motherboard will help you in determining which CPUs are compatible)
- A CPU cooler if your CPU does not come with one
- Compatible RAM
- GPU risers
- A mining rig frame - these can be purchased on sites like Amazon, or you can build your own if you are up to the task.
- At least one GPU, but if you want to earn more of the coin you are mining, it is recommended to have multiple GPUs
- Depending on the climate you live in you may want/need additional computer fans that direct airflow through your GPUs to better regulate the temperature of your GPUs.
The difference between a GPU and CPU mining rig will be in your choice of CPU(s) and the number of GPUs. With a GPU mining rig, you will want to spend the bulk of your budget on purchasing GPUs. On a CPU mining rig, you will need one GPU (assuming the CPU does not have embedded graphics capability), and you will also want to purchase CPU(s) that are best for that kind of mining.
This writer has built a mining rig that mines Ergo. Ergo was chosen for several reasons, including the potential of it’s smart contract eUTXO technology, Sigma protocols, dApp development, tokenomics, core developers, and the fact that Autolykos V2 consensus mechanism is ASIC-resistant (meaning ASIC miners can not mine Ergo), and it puts less wear and tear on GPUs than other GPU mineable coins. For the purposes of providing an example, here are the specifications for the rig this writer has built:
- H110 Pro BTC+ ASRock Motherboard
- Intel Pentium G4600 CPU
- 6x Nvidia GeForce RTX 3060ti GPUs
- DIY Mining Rig Frame
- EVGA 1600+ PSU
You can do your own research and find what hardware will work for your needs and price point, but with this setup this Ergo mining rig operates at 1.34kW with an output of 1.7GH/s. It will cost electricity to operate your mining rig, so plan accordingly. One of the interesting things about mining is that you can also experiment with the overclock settings on the GPUs to find the optimal hashrate output to electrical consumption.
Once you have built a mining rig, you will then have to decide what software to use to mine. The two most common ways are either through HiveOS or Windows. If you are curious about how to mine Ergo, there are two great articles on mining in Windows and HiveOS. If you would like to know how to mine other coins, it is recommended you research the consensus algorithms for those respective cryptocurrencies. However, HiveOS is very popular amongst miners and it offers the ability to choose many different cryptocurrencies to mine.
If you are curious to know more about building and designing your own DIY mining rig, here are a few recommended resources:
How to Build your First CryptoCurrency Mining Rig
CPU mining is profitable! & how to build a CPU mining rig in 2022 with Rabid Mining
Mining Rig Profitability
Even if you are a hobbyist miner, you will want to know how profitable your rig is. Thankfully, there are several websites that allow you to specify your hardware, the cryptocurrency you are mining, and your electricity costs. Using these tools, you can easily determine the profitability of your rig. Here are some suggested sites where you can access profitability calculators:
Bitcoin Mining Calculator (CryptoCompare)
Whattomine.com (Allows you to compare hardware on different consensus algorithms)
WoolyPooly CPU Mining Calculator
NiceHash Profitability Calculator
If you decide you want to mine a cryptocurrency, you will also need to decide whether you want to solo mine or mine with a pool. Solo mining is where you will only receive payments for blocks you find while mining. Pool mining is where you join a pool of miners and share the profits for each block that is found by any miner within the pool. Your share of the profits is proportional to your mining rig’s hashrate contribution within the total hashrate of the pool. It is up to you, but unless you are running a large mining farm operation, you may find that payments/rewards are inconsistent while solo mining. With pool mining, you are guaranteed to receive steady payments.
Now that you have an introduction to mining, we hope you feel that you have the starting blocks to explore participating in this industry. With these tools, you can buy or build a computer that will function to support and maintain a blockchain network while earning passive income.
The last decade has shown that cryptocurrencies are here to stay, and the market for blockchain development is still very much in its infancy. Who knows what the next decade or two will bring in terms of development and mainstream adoption.