Cryptocurrency mining on ASIC miners: relevance, profitability, model comparison

Against the background of the volatility of many cryptocurrencies, crypto enthusiasts are wondering if it is still possible to profit from cryptocurrency mining .

Most profitable mining mechanisms involve enormous costs, including wholesale purchases of equipment and electricity, maintaining the operation of the cooling system and ASIC devices.

The best option for cryptocurrency mining for 2019 is cloud mining , as it provides maximum profitability at any level of starting investments and does not require any technical knowledge from the user.

Rating of reliable cloud mining services, see this review . And in this material, we will consider cryptocurrency mining exclusively on our own equipment.

How are things going with mining on your equipment in the fall of 2019?

Now for many, the principle of making profit from cryptocurrency mining on their equipment is this phrase: spend money to earn (a little) money.

To improve the situation and increase the interest of miners, new competitors of ASIC-devices are introduced to the market. In particular, Samsung, BitFury and ASICminer are involved in creating their own ASICs, along with the well-known technology giant Bitmain.

It is much easier to mine using the GPU. ASIC-resistant coins are more accessible to conventional amateur miners, but they are extremely vulnerable. Hash rental services such as NiceHash allow 51% attack without having your own equipment. A network with a low hash rate and mining using a GPU can hardly withstand such vulnerabilities.

It is also worth noting that most altcoins are not the same as before. Depending on the cost of electricity, many of them are useless to mine.

In the US, miners using the GeForce 2080Ti can only get a couple of dollars a day or less. But even in this situation, it will take a couple of years or more to cover the cost of video cards. This problem of low profitability can ultimately lead to the death of many altcoins mined on the GPU if the current hash rates are not enough to protect the networks.

Profitability of mining on ASIC devices

To assess what your daily profit can be, you can use profitability calculators , take a look at the popular ASIC miners that will appear on the market soon (the production of some Obelisk miners, for example, Obelisk GRN1 are in doubt):

Consider one of the most efficient ASICminer 8 Nano Pro , which is currently available. It can make a profit of about $ 21.00 per day for each miner if you pay $ 0.13 per kilowatt / hour. Not bad, right?

But there is one problem – this device is not designed for beginners (at least financially). To buy this machine from ASICminer , you will have to pay more than $ 9,000 per device, and to start you will need at least 50 pieces.

Believe it or not, the 8 Nano Pros are already sold out. Now you can choose a newer model – ASICminer Zeon Turbo with a discount of $ 9,500 and a daily profit of about $ 25.

A more practical option is Bitmain Antminer S17 . It is still quite expensive – several thousand dollars (and noisy like an air raid siren), but it can be bought at retail and it is much more suitable for beginners. With electricity bills, you can make a profit of about $ 17 a day.

However, to cover the cost of the purchase, it will take more than 500 days of mining at the current price of bitcoin. This is a fairly serious investment with deferred interest.

It is easy to assume that such prices can scare away an ordinary crypto enthusiast who just wants to try his hand at mining. This “price wall” is detrimental to decentralization, as fewer people or companies have the means to secure the network.

Mining pools

One of the most important steps in the mining process is the choice of a mining pool. Often pools have many parameters that affect your profits – from fees for participating in a pool to fees for transactions.

For mining bitcoins, some miners prefer to use larger pools, such as Slushpool , this is one of the oldest and most trusted pools among miners. There are other large pools, such as Antpool and BTC.com .

Payout mechanisms can be complex and somewhat confusing. For example, in Slush, the pool fee is 2%, which is slightly higher than in Antpool. But Antpool does not always pay transaction fees, while Slush does it regularly.

Smaller pools may have lower fees, but the miner may have to wait longer to pay for the block due to the lower technical capabilities of the pool. That is why small pools are more likely to suffer from downtime, during which the miner does not receive any profit.

However, in the long run, remuneration levels are equalized, of course, provided that the pool remains stable. For those who want stable and frequent payouts, larger pools look more reliable, but given the increased commission, with patience, small pools may seem more attractive.

As for altcoins , here the policy of mining pools is more flexible and diverse. Each altcoin with the PoW algorithm has many pools with different payment schemes, some of them with minimum threshold values ​​for payments, some with a higher or lower commission for the pool, some with no commissions at all.

For novice miners, apps like Vertcoin One-Click Miner are a great place to experiment with mining using the GPU . The application guides the user through each step of the process, helps in choosing pools based on statistics on commission fees for pools and working hours, which is visually displayed in the interface.

If you are not ready to dive into complex technical calculations, even using practical tips, but want to mine cryptocurrency on your own equipment, NiceHash service will become an easier choice. It allows you to mine coins through leased equipment.

Your computer provides a hashrate, so payments are made to your bitcoin wallet. This eases the difficulty in choosing a cryptocurrency and eliminates the need to find the best mining pools.

NiceHash also takes a part of the profit, but one way or another it is more profitable than a single mining.

The struggle for decentralization

Let's see what the developers of a number of cryptocurrencies do to solve the centralization problem. Since along with a huge variety of PoW mining algorithms there are more than 1000 different cryptocurrencies, we will mention only a few illustrative examples.

Last year, the Monero community was alarmed by mining with ASIC on their network. Bitmain “broke the code” by developing an ASIC for the Cryptonight XMR algorithm. The all-new Antminer X3 brings huge profits over the modest GPU capabilities. Having received a "discount" of $ 3,000, newcomers were given the opportunity to make good profits.

The reaction of the Monero developers was extremely clear. They suspected that Bitmain was secretly mining Monero using ASIC, as evidenced by a surge in the hashrate that is ready to ship used ASICs to unsuspecting buyers. Meanwhile, Monero were ready to fight back:

“We will have an emergency hard fork to limit any potential ASIC threat.” In addition, in order to maintain decentralization and eliminate motivation for ASIC production, we propose modifying Cryptonight PoW by forking twice a year.

Finally, we will continue to explore alternative Proof-of-Work features that can provide increased ASIC resistance than Cryptonight. ” ( source )

In response to the Monero fork announced, the price of the X3 fell to a sale price of $ 1,000, but still remained relatively high. It is important to note that the hard fork did not solve all the problems.

Thus, the Monero developers repelled the ASIC attack from Bitmain, presumably maintaining a high degree of decentralization. At the same time, they continue to work on implementing additional ASIC resistance using the RandomX solution, which randomly alternates between different algorithms to block ASICs.

Siacoin is another example of a project that abandoned monopolies by deliberately blocking ASICs from Bitmain and Innosilicon. As a result, Obelisk SC1 miner began to successfully mine Siacoin.

Other open-source currency developers have joined the anti-ASIC movement called #FairMining. This includes Digibyte, Vertcoin and others.

Another way to deal can be considered multi-algorithm design, which is based on the launch of a random sequence of algorithms, which significantly complicates the work of ASIC. Whattomine.com lists Ravencoin in the list of the most profitable multi-algorithm currencies, and Digibyte is generally considered the pioneer of this technology.

As you already understood, this constant tug of war requires ASIC developers and manufacturers to continue the technological arms race. This will contribute to the decentralization of mining and the ecosystem of electric currencies.

Publication date 09/15/2019
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