Bitcoin mining can be extremely profitable – or extremely expensive. Today, many inexperienced people dive into bitcoin mining with little knowledge. These people can end up losing a significant amount of money – especially if they purchased dozens or hundreds of ASICs at $2,500 apiece.
The most important aspect of bitcoin mining is the hardware. Your hardware determines whether or not you’re going to generate a profit.
In the early days of bitcoin mining, bitcoin was mined using CPUs or GPUs – two basic hardware components that are inside any PC. Your CPU or GPU used its processing power to compete for a block reward, and you received a reward whenever you successfully mined a block.
Today, things are vastly different than they were during the early days of bitcoin in 2009. Bitcoin’s difficulty increases every two weeks. This is done on purpose to ensure the network is secure. Otherwise, computer processing power would continue to grow while the difficulty remained stable.
As bitcoin’s difficulty grew, miners started to migrate to specialized mining rigs called Field Programmable Gate Arrays, or FPGAs. Initially FPGAs seemed destined to be the future of bitcoin mining. They delivered similar hashrates to GPU-powered rigs, but at a significantly lower electricity cost.
Eventually, FPGAs fell out of fashion when the industry created Application Specific Integrated Circuit (ASIC) devices. ASICs are chips designed specifically to mine bitcoins. They can’t be used for any other purpose.
Today, ASICs blow GPU-based bitcoin miners out of the water. ASICs provide up to 100 times the hashing power of a GPU. That’s why the vast majority of bitcoin mining today is done using ASICs.
There’s nothing stopping you from buying one or more ASICs to use as your own bitcoin mining hardware. They’re freely available for purchase online from companies like Bitmain. However, even with one or more ASICs, you’re still going to have to join a mining pool if you want to compete for block rewards. Otherwise, you’re unlikely going to make much money mining bitcoin.
Here’s what we’ve learned: bitcoin mining has changed significantly over the years. Today, anyone who is serious about bitcoin mining will purchase an ASIC. Next, we’ll talk about the specific ASIC options available today.
Bitcoin Mining Hardware Companies
There are three major bitcoin mining hardware companies available today, including:
Bitmain: Bitmain makes the popular Antminer line of bitcoin miners. The China-based bitcoin hardware manufacturer also runs one of the world’s largest bitcoin mining pools.
Halong Mining: Halong Mining is a new and popular bitcoin mining hardware company. The company quickly sold out of its first batch of miners on release. Halong is best-known for its Dragonmint T16 ASIC, advertised as the world’s most powerful and efficient bitcoin mining ASIC.
BitFury: BitFury, along with Bitmain, is one of the best-known names in the mining space. They produce bitcoin mining hardware and chips, but their hardware is not available for purchase.
Bitcoin Mining Equipment: What Do You Need to Mine Bitcoin?
You need three basic hardware components in order to start mining bitcoin, including:
- A Bitcoin Mining ASIC
- A Power Supply
- Cooling Fans
ASICs can use 1300W of electricity and more, which typically means you need a high-end power supply. The ordinary 500W or 1000W power supply on your gaming PC isn’t likely to get the job done. Meanwhile, all of that processing power is going to generate a lot of heat, which is why you need cooling fans or some other type of cooling equipment.
The Best Bitcoin Mining Hardware
Here’s our list of the most popular bitcoin mining hardware – including ASICs:
Antminer S9 Bitcoin Miner
This is the most popular and best-known ASIC bitcoin miner available today. The S9, at one point, was delivering a positive ROI within just 90 to 120 days of purchase. In fact, some miners were earning about 1 BTC every two months with their S9. Some key stats behind the S9 include:
Release Date: June 2016
Power Consumption: 1375W
Power Efficiency: 0.098 J/GH
Hashrate: 12.93 TH/s
The cryptocurrency mining community was shocked in late 2017 / early 2018 when new startup Halong Mining claimed to have created the world’s most efficient bitcoin mining ASIC. Halong Mining backed up that claim with proof and a successful launch. Today, the Dragonmint T16 is the most powerful ASIC miner for bitcoin, producing an incredible 16 TH/s of hashing power.
The T16 is also remarkably power-efficient, consuming just 0.075 J/GH, significantly lower than the Antminer S9.
Another advantage of the Dragonmint T16 miner is that it uses ASICBOOST, a bitcoin algorithm exploit that can boost efficiency by as much as 20%.
Ultimately, the Antminer S9 has been the most popular ASIC for a long period of time. However, the Dragonmint T16 is quickly making a name for itself with incredible performance results.
Release Date: March 2018
Power Consumption: 1480W
Power Efficiency: 0.075 J/GH
Hashrate: 16.0 TH/s
Other Bitcoin Mining ASICs
The two ASIC miners listed above are the cream of the crop. If you want to mine bitcoin at maximum efficiency with a legitimate bitcoin mining operation, then you’ll need to purchase either the Dragonmint 16T or the Antminer S9.
However, there are other options available. These options are cheaper and come with lower hashrates and worse efficiency. Nevertheless, some miners use these to complement their existing mining operations or to try bitcoin mining for the first time. Other popular bitcoin miners include:
- Antminer S7 (4.7 TH/s for around $500)
- Avalon 6 (3.5 TH/s for around $600)
- Antminer R4 (8.6 TH/s for around $1,000)
What to Consider Before Buying Bitcoin Mining Hardware
If you’re shopping for bitcoin mining hardware, then it’s crucial you consider a number of different things before you buy. Here are some of the important things to consider when comparing different ASICs:
Hardware Costs: If you spend $20,000 on an ASIC, then you’re going to have to mine significantly more bitcoin to ever make a profit than if you spent $2,000. The cost of hardware obviously plays an important role in profitability. Hardware costs are so important that serious mining companies will buy hundreds or thousands of ASICs in bulk to lower the cost-per-unit.
Hashrate and Efficiency: The primary way to measure the power of bitcoin mining hardware is by looking at the hashrate and efficiency. The top miners have hashrates of 13 to 16 TH/s. No other ASICs come close to the Antminer S9 and the Dragonmint 16T. However, efficiency is nearly as important. How much power does the ASIC use to achieve its hashrate? The less power spent, the better. The top ASICs have power efficiency rates of 0.075 J/GH (on the Dragonmint 16T) and 0.098 J/GH (on the Antminer S9).
Electricity Costs: A Dragonmint 16T will generate approximately $10 per month in profit if you’re paying 12 cents per kWh for electricity. This number rises as high as $100 per month, however, in areas where you’re paying 3 or 5 cents per kWh for electricity. The cost of electricity should play a big role in your bitcoin mining hardware purchase decision.
Cost of Other Equipment: You’ve spent $2,000 to $3,000 on an ASIC bitcoin miner. However, the costs don’t stop there. There’s other equipment you need to purchase, including some type of cooling system.
The Risk of Bitcoin Price Volatility: You need to consider the risk of bitcoin price volatility before you buy an ASIC miner. Bitcoin’s price is very volatile. Periodically, the price will plummet and thousands of ASIC miners will go on sale. Mining companies that invested millions of dollars in ASICs will try to offload supply to generate cashflow. Are you prepared to deal with bitcoin price volatility? Make sure you consider the price of bitcoin before you buy.
Block Rewards: Originally, bitcoin block rewards were set at 50 BTC per block. At $10,000 per BTC, that means one miner was making $500,000 in revenue every 10 minutes. Over time, the block reward gets cut in half. It dropped to 25 BTC, for example, before settling at today’s 12.5 BTC. The block reward will be cut in half again to 6.25 BTC per block in 2020. Miners need to prepare for this.
By considering all of the factors above, you can make an informed decision on your next bitcoin mining hardware purchase.