5 . Introduction to Cryptocurrency Mining - Part 2 | Steemit Crypto Academy | Lesson 5
Last week I gave you a basic introduction to crypto currency mining. We discussed how cryptocurrency mining works , what is proof of work , what is proof of stake , what is a mining pool and some other basic things you need to know about mining. And in our homework task 4 , we discussed about mining difficulty and challenges faced by miners. After completing lesson no 4 , I think now you have a fundamental idea about what is crypto mining and why it's important for the blockchain industry. Following are the topics we discussed up to today. I welcome you all to go through them if you missed the previous weeks.
Trading Lessons for beginners
Introduction to Crypto Currency Mining
Today I'm going to further discuss under the topic of crypto currency mining. Today I will basically pay my attention to the hardware's we use for mining. There are lot of factors to discuss , but the objective of my lesson will be to give you a fundamental idea about them.
Crypto-Currency Mining Hardware
In our previous lesson we discussed that mining is the process of validating transactions in a blockchain system by solving complex mathematical functions. To start mining a particular crypto currency you need to configure a set of hardware's. The major part of a crypto mining hardware is ASIC's. ASIC's stands for Application Specific Integrated Circuits. Or we can use GPU's, simply graphics cards ( Graphic Processing Units) to mine crypto currencies. There are lot of factors to consider when purchasing hardware's for crypto mining. If you want to start crypto currency mining, you need a mining rig (ASIC,CPU, FPGA , GPU) which is a system with hardware elements used for mining. There are two options. First one is you can directly buy a pre-built mining rig. And the second option is you can assemble a mining rig. First option is costly than the second option. There are lot of factors to consider before purchasing or assembling a mining rig such as Device Cost , Maintenance cost , Operation cost , Power consumption , Hash rate , Efficiency , Heat generation , Noise , Durability etc. Maintenance cost can't be ignored too. We need to clean dust and there will be lot of other technical faults occurring during the operation as a mining rig is a system which operate 24/7 throughout the year.
So these are the factors you need to consider before purchasing a mining rig. After doing a qualitative and quantitative analysis , you need to do a calculation of your profit for a estimated price of the crypto currency you planning to mine. It will not be an accurate calculation as the crypto market is very unpredictable. But you can get an idea about the operational costs and maintenance costs .
Components You Need to Prepare a Mining Rig
Building a mining rig is not a complex process. It's very similar to what we did when creating a gaming PC. Just collect the components we need and assemble them following the guidelines. I always recommend you to build your mining rig by yourself than buying prebuilt one as it will give you lot of technical knowledge regarding the subject. That knowledge will help you to maintain the system well finding solutions for the faults by yourself. Following are the main components you need to create your mining rig.
CPU (Central Processing Unit) : CPU is a key component in a mining rig. A mining rig with a good CPU will function without any issue. It's like the main controller of the mining rig. There are two main types , Intel CPU's (ex : Intel Celeron , Intel i3 ) and Ryzen CPU's ( ex : AMD Ryzen 7 3700X , AMD Ryzen 9 5900X ) . Ryzen AMD CPU's are considered better when comparing the hash rate with price.
Motherboard : We must be very careful when selecting the motherboard for you mining rig. Motherboard interconnect all the components in the mining rig. So before selecting the mother board you have to decide how much of GPU's will be used. The PCI (Peripheral Component Interconnect) slots on the motherboard decide the amount of GPU's that can be connected. And also you need to consider the socket type of the processor ( AMD and Intel sockets are different )
GPU(Graphics Card) : GPU is the most important components of a mining rig. The performance of the GPU unit decides the profit you obtain from your mining rig. When selecting a GPU , you need to considered all the factors we discussed above. The cost , electricity consumption and the profit. You must always select a GPU with a better Return on your investment ( With lower payback period) . Most popular brands are AMD (AMD RX 5700 ,AMD RX 570 8GB ) and Nvidia (NVIDIA RTX 3060 Ti , NVIDIA RTX 2060).
Cooling System : Cooling System : Mining rigs generates heat when it operates. So it's very important to avoid overheating of you mining rig using a good cooling system. Fans , Air conditioning are some of the cooling methods used by miners. There is considerable energy consumption by the cooling system too. You have to consider it when designing your mining rig.
Power Supply: The Watt Value (W) of the power supply unit depends on the power consumption of the items you selected previously. You just have to add the power consumption of each unit and decide the power supply capasity you need for the mining rig.
I found a perfect video which explain to assemble a mining rig and I thought of sharing it with you for this lesson.
This clearly explains how to assemble the different components for a mining rig. There are lot of sources in internet for any brand. So it's not difficult to assemble the mining rig by yourself.
Creating a mining rig is not a complex process. There are lot of guides and tutorials available on internet. You can follow them and create the mining rig by yourself. The profit will depend on lot of factors as we discussed above. So it's very important to calculate the ROI before investing. As the crypto currency markets are very unpredictable , the income of the miner is unpredictable too.
Homework Task 5
You need to do your own research and create an article discussing following topics,
(1) What is Cloud Mining ?
(2) What are the best cloud mining platforms ?
(3) Discuss the advantages and disadvantages of cloud mining ?
• Your homework post should be posted in crypto-academy community.
• Your article should be at least 300 words.
• You have to create a simple guide in a way a newbie can understand and follow the steps.
• No plagiarism please . You can use images taken from copyright-free sources mentioning the source.
• The final submission date will be 14/03/2021
• Add tag @besticofinder in your post, it will help me to find your submission. Use #cryptoacademy and #besticofinder-week5 , so that Steemit Team can find you.