Bitcoin mining is becoming more popular by the day, and what was once a niche hobby now attracts people from all walks of life. Some mine Bitcoin just because they enjoy it, but you may be able to make money from it if you live in an area with inexpensive power costs.
The first thing you’ll need to do to start mining Bitcoin is buy hardware that’s up to the job. This guide will cover everything you need to know about Bitcoin mining hardware, including which ASICs are the best choices, what hardware you need and how you can figure out the profitability of a hardware setup.
Read This Before You Decide to Start Mining Bitcoin
Before you spend time learning about mining Bitcoin and the kind of hardware involved, it’s important to have realistic expectations regarding the potential profits.
This isn’t something where you can just get in the game, turn on your ASIC and start making all kinds of cash. The popularity of Bitcoin mining has also made it incredibly competitive.
Since the hardware uses such a large amount of electricity, the only way you can profit is if you have your hardware somewhere with cheap power.
China has very cheap electricity, which means it has a substantial portion of the mining market. Even if you find an area with low power costs, you would need to get your operation set up there and potentially live there yourself, and the people in these places aren’t exactly keen on Bitcoin miners.
None of this is to discourage you from mining Bitcoin, only to give you a realistic perspective. Now, if you’re only in this because you want to have bitcoins, then the most time and cost-effective option is to hop on a reputable Bitcoin exchange and purchase them outright, not to mine for them.
Breaking Down the Best Bitcoin Mining Hardware
For Bitcoin mining, a select few ASICs stand out as the best of the best. Here they are:
- Dragonmint 16T – Even though it has a high price tag of $2,729, it has 16.0 TH/s of hash power.
- Antminer S9 – This miner has 14.0 TH/s of hash power and costs $3,000.
- Antminer S7 – An option that’s easier on your budget, this has 4.73 TH/s of hash power and costs $489.99.
- Antminer R4 – At $1,000 and with 8.6 TH/s of hash power, this miner has solid performance without being too expensive.
- Avalon 6 – This miner comes in at $559.95 and offers 3.50 TH/s of hash power.
Can You Mine Bitcoin with a Computer?
Although you technically can use your computer to mine Bitcoin, it’s a terrible idea. Mining Bitcoin has become progressively more difficult, and mining hardware is the only option that is fast and efficient enough for the job.
Using your computer for your mining won’t even score you one cent per month, which means you’d be better off digging through the couch for loose change.
What the mining will do is put all kinds of wear and tear on your computer because of how intense it is. You’ll be breaking down your computer to earn next to nothing. If you really want to mine, then you need the proper equipment.
What About a USB Bitcoin Miner?
Another mining option you may have heard about is a USB Bitcoin miner that you plug into your computer’s USB drive. Again, this won’t have the hashing power to do you much good.
You can get one if you just want to play around or learn how to mine, but it won’t help you over the long haul.
What Are ASIC Bitcoin Miners?
To put it simply, ASIC Bitcoin miners are the latest stage of evolution in Bitcoin mining hardware.
In Bitcoin’s early days, people mined it using their computers, as the creator of the cryptocurrency intended. Once miners found that graphics cards had greater hashing power, they switched to using those. The next step up from graphics cards was ASICs, which stand for application specific integrated circuits.
ASICs are basically computers made for the sole purpose of mining Bitcoin. They are able to solve equations and verify transactions with considerable speed and efficiency.
Because they can do more mining in less time, they’re the only way for a person to make their mining profitable.
One important point to note here is that ASICs only mine Bitcoin. They don’t secure any bitcoins for you. For that, you’d need a Bitcoin hardware wallet.
Calculating the Profitability of Mining Bitcoin
The easiest way to figure out how profitable mining Bitcoin would be for you is to use our handy profitability calculator. You’ll just need your hardware’s hash rate and the cost of electricity wherever you’ll be mining.
Factors that Affect Your Profitability
These are the most significant factors in the profitability of your Bitcoin mining:
- Your hardware’s hash rate
- The current value of Bitcoin
- Power costs
The hash rate will determine how many bitcoin you can mine, and comparing the value of those bitcoin to power costs will show you your profitability.
One benefit with this calculator is that it also takes into account that the network hash rate will increase day by day. Since many other profitability calculators fail to factor that in to their calculations, they give users false expectations about profits.
The one factor that no calculator can fully account for is the value of Bitcoin, especially considering the cryptocurrency’s volatility. Any rises or falls in the value of Bitcoin will obviously have a significant effect on profits.
What to Look for in a Bitcoin Miner
When you’re checking out ASICs, you should look at the following:
- Hash rate – This refers to the number of hashes the miner can make in one second. Machines with higher hash rates are typically more expensive.
- Efficiency – This is the ratio of electricity to bitcoins that you get with the miner. Of course, a more efficient ASIC will get you bitcoins at a lower cost. The top ASIC in terms of efficiency is currently the Halong Mining Dragonmint T1.
- Cost – As you probably would expect, you need to pay more if you want an efficient miner with a high hash rate. Cheaper options won’t mine as many bitcoins, and you may be better off saving until you can afford a better machine.
My recommendation is that you look at efficiency first, because making a profit is all about mining while keeping costs down. After that, check the hash rate and the cost.
Where to Buy a Bitcoin Miner
You don’t need to go anywhere special or venture onto the dark web to get a Bitcoin miner. Amazon has them (along with just about every other product on the planet), and you can also find both new and used miners on eBay.
If you’re on a budget and trying to get the lowest price for your rig, then eBay is the best place to start. You can find plenty of used ASICs there at reasonable prices.
While the thought of buying a used ASIC may sketch you out a bit, you don’t need to worry too much, because eBay has buyer protections. You’re guaranteed a working miner. With some listings, there may even be other equipment included.
Which miners should you look for? I’d recommend either the Dragonmint 16T or the Antminer S9. They’re more expensive, but you may be able to find a decent deal, and they’re the best options on the market.
Running the Numbers
When you have an ASIC in mind or you’re about to buy one, use the profitability calculator one more time with that rig’s hash rate and your power costs. This will help you confirm if you can make any money or if you’ll be spending your money for nothing.
Other Mining Options
Buying your hardware and running it at your location isn’t your only option. Some companies allow you to get hardware sent to their warehouse, and then they’ll operate it for you.
Or there’s cloud Bitcoin mining. These options aren’t as profitable or as enjoyable, but for some miners, they’re a better fit.
Bitcoin Miner Brands
There are three big names in the world of Bitcoin mining:
- BitFury – BitFury produces quite a bit of hardware and chips for mining Bitcoin. Consumers aren’t able to purchase its products, though.
- Halong Mining – The new kid on the block, Halong Mining made waves when it came out with the Dragonmint 16T, which I feel is the best of the best when it comes to miners. That popularity led to a sellout of the first batch, but the company is making more, and you can always check the used marketplace.
- Bitmain – Bitmain is known for its Antminer machines, a quality line. This company has its headquarters in China, and besides manufacturing mining equipment, it also runs its own mining pool.
Other Required Equipment for Bitcoin Mining
Yes, you could spend well over $2,000 on your Bitcoin miner and still need to buy more equipment – two items, in particular.
The first is your miner’s power supply. A Bitcoin miner needs its own unique power supplies to operate, because it’s not the type of device you can just plug in to an extension cord. You can get a power supply for about $100 to $150.
The second is your cooling fans, and they’re extremely important. Since miners need to work hard, they generate a ton of heat, and if they overheat, they’ll shut down. You can go for cheap fans or expensive fans, but just make sure you buy enough so that your machine stays nice and cool.
The Story Behind Halong Mining
Since Halong Mining is the force behind the top ASIC, it makes sense to delve into their story. When Halong Mining first announced its Dragonmint T16 and claimed this would be the most efficient and powerful ASIC, people were both excited and skeptical.
It wouldn’t have been the first time a company in the cryptocurrency world overpromised and underdelivered.
Halong alleviated some concerns by publishing videos of the ASICs in action, and also explained how they had put $30 million into research, developing the ASIC and building prototypes.
There was a lot on the line in March of 2018, the month when the first Dragonmint T16s were supposed to ship. If the rig lived up to the hype, a startup would have taken down Bitmain, which had long been at the top of ASIC development and essentially had a monopoly on the market.
March came, the Dragonmint T16s shipped, and even the most prominent skeptics had to admit they were proven wrong. The T16 delivered on Halong Mining’s claims.
Showdown: Comparing the Dragonmint T16 and the Antminer S9
The two Bitcoin miners at the top of the mountain are the Dragonmint T16 and the Antminer S9. If you’re a serious miner, then you definitely need one of these two miners. But the big question is which miner is the superior choice.
The T16 has a lot going for it. With its hash rate of 16 TH/s, you couldn’t find a more powerful miner. Despite the power, it’s efficiently, with a consumption of 0.075J/GH. Another perk with the Dragonmint is ASICBOOST, which increases efficiency by 20 percent thanks to a Bitcoin algorithm exploit.
The S9 is no slouch, either, and with a consumption of 0.098J/GH, it’s also efficient. However, it’s less efficient and less powerful than the T16, and every little advantage helps when you’re mining.
With the superior performance of the T16, it beats the S9 by 30 percent in terms of efficiency.
How ASICs Have Affected Bitcoin and Other Cryptocurrencies
Blockchain technology is the basis for Bitcoin, and that technology’s purpose is to create a decentralized platform. The result is that average people have the power instead of large authority figures.
Instead of some data hub having sensitive information, that ends up cryptographically secured on the blockchain. Groups of miners are the ones validating everything, not a government or a massive corporation.
Something interesting and not necessarily beneficial occurred as advancements were made in Bitcoin mining. Originally, miners used their CPUs.
They then realized that GPUs were the better choice, and then the ASICs came out and rendered those GPUs obsolete for mining purposes.
While ASICs offer excellent performance, they aren’t cheap, as you may have noticed earlier in this guide. Not only that, but the developers of those ASICs didn’t release them to everyone at the same time. Bitmain and other developers first sold their products to the mining cartels.
There are now warehouses, known as mining farms, with thousands upon thousands of ASICs running at the same time. Many of these farms are in China due to the low power costs.
In a nutshell, the creation of ASICs may have resulted in more mining getting done, but it made the entire blockchain validation process centralized, which is contrary to the original intent behind the technology. It’s massive mining companies doing most of the validation, instead of miners across the world sharing the work and the wealth.
Buying Your Bitcoin Miner
If you’re still interested in mining for Bitcoin, you’ll need to decide if you want to do this for fun or if you’re serious about making a profit.
The only way to profit off mining is to live or move somewhere with low electricity costs. You can then start looking for a quality miner, ideally a Dragonmint T16, to get yourself started.