Although the whole market is currently in a downturn, it wasn't long ago that cryptocurrencies were peaking in popularity and reaching new ATHs. There were articles in the media about crypto mining, describing it as a brilliant method of generating passive income and an excellent business idea. Is this actually happening? How does crypto mining work after ETH merge and is it still possible to make money from it?
What is crypto mining? Short explanation
To understand how does crypto mining work, try to imagine packages of transactions, such as in the SWIFT system. In blockchain technology, the transaction approval system is based on performing many mathematical operations in a short period of time. Miners use the computing power of their machines, ensuring the security of the entire network, and in return receive a reward, namely cryptocurrencies. Their amount is stated in the source code of each coin, and there is often a reduction in the reward from time to time.
Is crypto mining profitable?
In mid-September 2022 there was a major change in the Ethereum code. Since then, you can no longer mine one of the world's largest cryptocurrencies, which drastically reduced the profitability of mining. Crypto mining can still be profitable, but you must have access to really cheap electricity, for example, through a photovoltaic installation.
Nowadays, the price of energy must be less than 6 cents per kilowatt hour for your business to be profitable. A great deal also depends on the equipment with which you dig cryptocurrencies, as modern GPUs are way more effective than old ones.
That doesn't change the fact that at the peak of the bull market, the payback time for an investment in a rig was only 7 months. Who knows, maybe it's worth equipping yourself with the right equipment now?
And what is a crypto mining rig?
In the early days of crypto mining, people used ordinary computers to process transactions in blockchains. But what if you could earn several times more without buying cases, extra disks and ram memory? Just build or buy a crypto mining rig! It's a device consisting of several graphics cards and a suitably powerful power supply, which work together with components known from normal computers.
Best mining rigs - 3 configurations
It's time for some sample configurations. We have prepared for you a list of 3 configurations that will help you efficiently mine cryptocurrencies.
1. Budget configuration- GTX 1660 Super
Let's start with the most basic rig. GTX 1660 Supers are very economical graphics cards, so you won't need an overly powerful power supply.
A mining rig based on 12 GTX 1660 super cards and a ready-made platform costs about $3900.
2. Mid-end configuration- RTX 3070
It's time for a more powerful kit. RTX 3070 costs more, but offers significantly more processing power and is a very versatile model.
RTX 3070 rig can be based on the same platform and costs about $7350.
3. High-end configuration- RTX 3090 Ti
Crypto mining rig based on RTX 3090 Ti has insane computing power. These graphics cards are equipped with 24GB of VRAM each! This setup consumes even 5000 watt, so you need at least 3 power supplies.
Setup built with 12 RTX 3090 Ti cards, platform and 2 extra PSU’s costs about $16850.
Alternative to GPU- ASIC crypto mining
Although modern graphics cards mine cryptocurrencies really efficiently, there are even better devices. ASICs are machines designed exclusively for cryptocurrencies. Additionally, they are specialized for one algorithm, so you can't mine different coins with them.
ASIC crypto mining is typical for Bitcoin, since the SHA256 algorithm requires an architecture typical for processors, not graphics cards. Unfortunately, ASIC miners are not suitable for mining cryptocurrencies at home, because they are very noisy.
Crypto mining software
Before you start making money, you need to take care of the right tools. In addition to graphics cards, you will need crypto mining software.
Operating systems
First of all, you will need an operating system. Although some miners use Windows 10, the best choice will be Hive OS. This is a Linux modification designed exclusively for creating mining rigs. Hive OS is completely free if you use only 1 rig or ASIC miner. Otherwise, it’s paid, but the monthly fee is very affordable.
Miner
There are many miners, as each cryptocurrency is mined using a different program. Hive OS itself will suggest you a miner, depending on the cryptocurrency you choose.
Wallet
Finally, it's time to choose a wallet. In the article on investing in cryptocurrencies, we mentioned that hardware ones are the safest, while desktop wallets are the best compromise between safety and comfort. For the very beginning, choose Exodus, as you will surely appreciate its simplicity.
Is mining crypto on phone possible?
Investing in a mining rig is not always possible, for example, because of high electricity prices. So you may wonder if it is possible to use your phone to mine cryptocurrencies. Unfortunately, probably no one has yet succeeded in making money from it. There are better ways to use your phone. Find out by reading our text on the subject.
Perspectives
It's easily noticeable, mining cryptocurrencies is not a very profitable business right now, as it can take several years to return your investment. If you have a small budget, instead of building a mining rig or trying to mine crypto on phone, it is better to opt for buying cryptocurrencies or mining on your computer, for example, with NiceHash.
Raise money, look for buying opportunities, and wait for better times! The next bull market will probably come in 2024, which means pretty quickly. The sooner you see that mining is really becoming profitable, the better profits you will make. And in your spare time you can always invest in your future, for example, by getting new certificates.
