If you are serious about cryptocurrency mining then it definitely makes some sense to look at profitability. There are a few things to consider in terms of the costs associated with mining. The expenses go beyond simply buying the necessary hardware and running software. Let’s dive into how you can figure out your mining profitability.
Pick what cryptocurrency you want to mine!
There are a lot of complexities involved with mining cryptocurrencies. It’s not really as simple as just taking your ASIC’s machine out of the box and starting. First off, there’s a ton of crypto’s that you can mine besides bitcoins.
Essentially, miners use computing power to compete for cryptocurrencies by finishing off Blocks on respective Blockchains. As of today, there are two algorithms that are commonly used for mining purposes. Let’s check them out.
SHA-256: is an algorithm that is based on a rigs raw power. Back when the bitcoin was first released, the SHA-256 algo could be used to mine bitcoins even on the most basic of computers. However, ‘Application Specific Integrated Chips’, or ASIC’s machines are the trend currently.
Scrypt: In contrast to SHA-256, Scrypt works off of RAM and general processor power.
Build the right cryptocurrency mining rig!
Now, based off of your budget, there are a few options as to the types of rigs that you can use for mining.
Pretty much you can either build your own rigs or buy ASICs machines. Building your own cryptocurrency mining rig might be a time-consuming process. Though, a DIY mining rig is popular among solo miners.
But I recommend going the ASICs route. These machines are entirely self-contained and can pretty much be used right out of the box. However, ASICs machines are more expensive than your standard DIY rig. Though, they do offer a lot more power in terms of mining.
Down to cryptocurrency mining details.
It’s very important to take electricity costs into consideration when you get into mining. You need to figure out how much power all of your equipment is taking in order to figure out how effective your mining operation will be. It’s quite easy to figure out your efficiency. Just divide you hash speed by the amount of power your rig consumes.
As a side note to mining efficiency, always be in the know as to how much money you spend on your electricity bill. It can add up and act as a serious detriment to profits.
Cryptocurrency mining things you need to take into consideration.
A lot of upfront costs are necessary in order to get started with cryptocurrency mining. Additionally, there are some less than obvious factors that should be taken into consideration.
For starters, a big mining operation can really heat up. So, you need to keep your premises pretty cool. Proper ventilation needs to be in place and figured out. You don’t want all of your mining rigs to get too hot and malfunction.
Also, you need to have good power supply units for each and every one of your rigs. Crappy PSU’s can seriously impact the performance of your cryptocurrency mining rig. So, don’t cheap out on one.
If you are looking to launch a large-scale mining operation then you may want to consider some security measures.
There are a few online calculators that you can use to figure out how profitable your mining will be. For example, CoinWarz, Trade Block, and BitcoinX are great for getting a glimpse as to the ROI you can receive from mining.