While a computer CPU does many things, it doesn’t excel at any specific task. When cryptocurrency mining was first introduced, it used existing, off-the-shelf computer hardware. As the mining industry matured, companies developed ASIC (Application Specific Integrated Circuit) miners that perform a single mission: Mine cryptocurrency.
Setting up an ASIC miner or two can be a great way to generate passive income to help your journey to financial independence. We’ll walk you through the various aspects of ASIC mining to give you the tools to make an informed decision.
How does an ASIC miner differ from other types?
Unlike a CPU or GPU miner, an ASIC mining rig works with only one algorithm and is typically limited to mining a single currency. Since they are custom-built to mine that specific algorithm, they are often faster than a general-purpose mining rig.
Most algorithms can mine more than one coin, such as Scrypt or SHA-256. Some ASIC miners can take advantage of that to mine different cryptocurrencies, giving them more flexibility without sacrificing speed. This means that a mining rig that can mine Bitcoin might also be able to mine Namecoin instead, allowing you to take advantage of trending markets.
Due to their highly-specialized nature, ASIC miners can not be put together with off-the-shelf parts. They have to be ordered directly from the manufacturer or a reseller. They usually have much higher power requirements, many over 1000W and the most profitable drawing 3000W or more.
Mining Profitability Tools
There are a lot of different ASIC miners out there, and it may not be immediately apparent how profitable they are just by looking at their specifications. Luckily, there are great sites that will show you how well different mining rigs perform. Also, there are resources to help you calculate profitability based on hashrate and power consumption.
Here are a couple of those tools (As always, please do your research and make sure you’re only making purchases on trusted sites):
There are a few different manufacturers of ASIC miners. Most focus on the high-end market, such as Bitmain, Canaan, and MicroBT/Whatsminer. Their mining rigs typically take a lot of power to run (3000W or more) and make excellent profits.
Goldshell is another manufacturer doing great things to bring crypto mining to everyday people. While they do have a few high-end miners, they also have a line that they’ve designated “Boxes” that use far less power, are safe to run on 120V lines, and are still profitable. At the time of this writing, they also make two of the most profitable mining rigs, the KDA-Box and KD6.
Due to the high demand for cryptocurrency mining rigs, supply is usually limited and sells out quickly. Because of this, many scam websites exist that mimic legitimate sites but only exist to steal your money. It is VERY IMPORTANT to triple-check any website before purchasing any equipment over the internet.
ASIC mining can consume a lot of energy, especially if you use a more powerful rig. Planning your power usage is essential for putting together your mining setup. It’s also a good idea to plan for future expansion. We feel that a basic tutorial on electricity, power, and the different connectors available is necessary to help you make informed decisions.
In general, most power outlets in the Americas (North, Central, and South) use 110-120v as their standard, and most of the rest of the world uses 220-240v. There are many exceptions to this rule, but it is important to mention here because it directly affects the number of devices that can safely run on a line.
The expression for calculating power in a circuit is P=VI. What this means is that Power (P) is equal to Voltage (V) multiplied by Current (I). We measure Power in Watts (W), Voltage in Volts (V), and Current in Amps (A). If we want to figure out how much Current a given device uses, the formula changes to I=P/V.
Why is this important? Let’s use an example:
Let’s say that you’ve decided to get a mining rig that uses 3000W of Power and live in the United States. In the USA, the standard for a power line in your home is 120V and can safely carry 15A. If we plug that into the formula, we would have 3000 / 120 = 25A. You would not be able to run that mining rig on that line safely. Now, let’s take that example one step further by converting that line to 220V. With that one change, the mining rig now uses 3000 / 220 = 13.64A. It cuts the Current draw almost in half! Now, we can safely run that mining rig off that line.
Essentially, a power supply is a device that converts the energy from the outlet into something usable by the computer. The key takeaways from this process are:
- It can only supply as much energy as it is rated for
- This conversion process causes some power to be lost as heat
Because of this, a few essential things to look for in a power supply:
- The total power of all connected devices should be 80% or less of the power supply’s maximum rating (example: you should use at most 800W on a 1000W power supply)
- A power efficiency rating of 80+ Gold or higher (if applicable)
While a power efficiency rating above Gold (such as Platinum or Titanium) is better at minimizing power loss, there are significant diminishing returns. The price will increase substantially, and the additional power savings may never offset that extra cost.
With that being said, most ASIC mining rigs have proprietary power supplies designed to work with that specific rig or brand. We recommend going with the manufacturer-recommended power supply for the rig rather than purchasing one from a third party.
ASIC mining rigs use their own operating systems, which are often proprietary and designed to work with that specific hardware. While there may be third-party firmware available for some ASIC miners, in most cases, we recommend sticking with the software installed on the rig. Making changes to the software on the rigs can be dangerous and void your warranty; it should only be attempted by experienced professionals.
HiveOS is an operating system built on Ubuntu and designed specifically for cryptocurrency mining. It is easy to use and has many rich features. If you aren’t familiar with Ubuntu, don’t write this one off: It has a tremendous web-based interface and doesn’t require any knowledge of Linux to use.
It can run any CPU or GPU mining rig and even some ASIC miners. It has built-in drivers, automatic updates, and the most popular mining software built right into it. You can run it out of the box as-is, or you can dive into some of its more in-depth features like custom overclocking and remote monitoring.
Pricing is very reasonable for HiveOS. It is free for the first 4 GPU “workers” (mining rigs), so you can use it from home at no cost indefinitely. CPU mining is only $0.3 per month per rig, and you can even set it up to automatically pay the fees out of any Ethereum you mine with your account.
Keep in mind that this is 3rd party software and may void your warranty. It would be best if you did your due diligence to ensure that HiveOS is a safe option to use with your mining rig before using it.
Choosing a mining pool is a critical decision. It can be daunting to choose the right one for you, and it’s ok to change if you don’t feel that you’re getting a good value from the one you choose. There are multiple payment types, schedules, and minimum payouts so take your time to do your due diligence. Using a mining pool is effectively mandatory, as mining on your own can take a long time to see any payout, if at all.
We recommend starting with this great write-up on what a mining pool is, and then check out MiningPoolStats, which gives a live view of all tracked mining pools and makes it easy to look up pools by coin.
Choosing an ASIC mining rig takes a lot of research and attention to detail. Still, once it is complete, you can turn it on and let it make money without any further intervention. It can be an excellent starter for your journey to financial independence and a great way to scale up your passive income streams.
Have you purchased an ASIC mining rig? Are you planning on getting one?
Let us know in the comments below!