Bitcoin is the most popular cryptocurrency on the market, with many people often confusing it with the entire crypto market.
There are various ways to make money from bitcoins. One of these is bitcoin mining. In this guide, we’ll be providing you with all the information you need to decide if you want to start mining bitcoin, as well as how to go about it.
During the early days, you could mine bitcoin with your computers, CPUs and GPUs. That was all you needed at the time. But now, things have changed.
You need bitcoin mining hardware known as ASIC (Application Specific Integrated Circuit). ASIC miners are hardware devices that are solely designed to do just one thing –in this case, mine bitcoins. We’ll be looking at those later on.
While you can actually buy these and try to mine all by yourself, the profit margins have drastically dropped in the last few years. So, when it comes to mining, you can either solo mine or pool/cloud mine.
Solo mining will essentially result in lower returns. The smart way to make money from bitcoin mining is to jettison solo mining and go for cloud or pool mining. Cloud or pool mining typically produces better returns than solo mining, even if they attract some extra fees. Understanding how these work plays a key role in your eventual profits.
When bitcoin was created, miners were paid 25 BTC to mine just one block. Starting in 2016, that reward value dropped by half to 12.5 BTC per block.
This will further drop by half once another 210,000 blocks –usually within 4 years- are mined, and so on until the max available number of bitcoin in circulation is attained –the max number of bitcoins that can ever exist is 21,000,000.
So, come 2020, chances are that every block of bitcoin mined will only attract a 6.25 BTC payment. As you can see, doing this yourself doesn’t make any financial sense.
While you can try to mine it all by yourself, it’s simply easier and more financially rewarding to join a bitcoin mining pool. This way, you can split the proceeds between all members of the mining pool, based on their number of “nodes”.
And if you want to join a bitcoin mining pool, you will need ASIC bitcoin miners. Let’s examine some of the best bitcoin mining hardware in the market.
Top Bitcoin Mining Hardware for 2018 And Beyond
The hardware you use for mining bitcoins plays a significant role in determining your profits. For this, you’ll need energy efficient, high output ASIC bitcoin miners to help you get the results you want.
This is even more important in the face of rising competition and lower rewards per bitcoin block. As earlier stated, your best bet would be to join mining pools and split the profits with them as against going solo.
No matter how great your bitcoin miner is right now, it will most likely be overtaken by faster, more efficient, relatively lower energy consuming units in a few months. That said, here are the best bitcoin mining hardware for 2018:
Manufactured by Bitmain, Antminer S9 is a more energy efficient unit with a competitive hash rate of 14 TH/s. it is a superb bitcoin miner and will probably be for a while.
Its current power usage is 1375 watts, which makes its energy savings twice as efficient as its predecessor the Antminer S7. Of course, it is somewhat pricey as it costs a minimum of $1,500 to purchase.
Please note that this price is subject to the state of the device (new, used or old) and where it’s purchased (price varies by vendors).
Manufactured and sold by Halong Mining, the DragonMint 16T is another very impressive ASIC bitcoin mining hardware. In fact, it is currently described in the BTC mining community as the world’s most advanced bitcoin mining hardware.
This is because of its 16TH/s hash rate –something that’s never been achieved in the industry- and its remarkable power efficiency that fluctuates between 1200 and 1480 watts. This is shaping up to be the single biggest competitior to Bitmain’s Antminer S9.
With these two features, it’s possible that DragonMint 16T just might upstage Bitmain as the world’s biggest and most efficient bitcoin mining hardware manufacturer. DragonMint 16T currently sells for between $1500 and $3000.
If for some reason, you can’t join a mining pool and you still want to mine bitcoins at home, the Antminer R4 is the perfect device for that. It is specifically designed for use at home, hence the quieter nature.
Of course your output won’t be as high as those of the S9 or 16T, you will still produce decent results. This currently has an 8.7Th/s hash rate and a power usage of just 845 watts.
As you can see, incredible power efficiency, even if output isn’t as high. Setting it up is pretty straightforward, making it the ideal bitcoin miner for first time users or hobbyists looking to make an extra income.
This available in for between $1400 and $2500 per unit. This will cover both the unit and its APW5 PSU power supply device.
2018 Bitcoin Cloud Mining Tips
But, what if you don’t want to go through the stress of buying a hardware, and just want a way to pay someone to handle all that so you can do other things? Well, that’s possible in the form of BTC cloud mining.
This involves the use of processing power from a remote data center to mine bitcoins. This is incredibly useful for people looking for a passive, hands free income stream. It basically eliminates the need for buying, setting up running and maintaining a hardware bitcoin miner.
While there are many options, the best known option is known as Hashpower Leasing. With this, you’ll just sign up with a cloud mining service, pay for a certain amount of hashpower, and then wait for them to pay you. The compensation for each service varies, with many paying an agreed sum per month.
While this eliminates the associated downsides of owning a BTC miner hardware, there are also disadvantages, chief of which is high risk of fraud and defaulted payments by the service.
Then, there’s also the possibility of the service shutting down at any time, as well as lower payouts owing to cloud miner’s charges. So, you’ll have to weigh the pros and cons of bitcoin cloud mining and decide if it’s something you want to do.
If you’re in doubt, look up BTC cloud mining service reviews or ask around in popular cryptocurrency forums. Reddit threads are also great for finding and identifying the best and most reliable services.
Why You Need Bitcoin Mining Software
All hardware are often run by software. The same goes for all bitcoin hardware. Your ASIC bitcoin miner should have the correlating bitcoin mining software. And the software itself, must work with the bitcoin consensus software.
If not, you’ll end up dealing with bugs as well as a less efficient hardware. The most common bitcoin mining software available to most mining hardware are:
Ask your mining pool about the right software to install. If you’re going it alone, make sure to use the one that’s compatible for the bitcoin core network.
How Much Can You Make From Bitcoin Mining?
If you’ll be spending four figures on BTC miners, you might as well be sure of how much you’ll be making in return. This will help you determine if it’s worth investing in. but before we delve into bitcoin mining profitability, there are a few things you should know.
The first thing you need to know is that the hash rate has been on the increase since ASIC miners hit the market. This, combined with the lower cost per BTC block, and its inevitable deprecation over time, is something you need to consider.
BTC mining is no longer as profitable as it used to be. Before 2016, miners earned 25 BTC per block mined –that’s currently over $225,000 USD @ over $9k per BTC. Now, it’s at 12.5 BTC per Block.
Come 2020, the reward will depreciate by half, meaning you’ll get paid 6.25 BTC per Block. Of course, you also need to consider that bitcoin is far more valuable now than it was in 2016 when 1 BTC was less than $500 USD. And it looks poised to continue to appreciate in value considering the increased hash rate difficulty as well as miners.
Whatever the case, you can always get an estimate of the potential profit margins by using bitcoin profitability calculator tools like the one on Cryptocompare.com. Mining bitcoins can be profitable if you’re smart and strategic about it.
We hope this guide has helped you, and that you have benefitted from it. Good luck in your bitcoin mining endeavors.