The growth of competition, the upcoming halving and the volatility of BTC force miners to look for ways to optimize. What you need to think about the miners in 2020 and what factors affect their profitability?
Ten years ago, to become a miner, it was enough to download a Bitcoin wallet to your laptop or computer. Competition was low, 50 BTC was mined every 10 minutes, so the few who started mining in 2009 and 2010 and kept their coins became millionaires.
Today, the situation has changed radically – competition is extremely high, and thousands of miners are scattered around the world. Regardless of whether you are engaged in mining or just thinking of doing it, you need to know all the details of this business to have a chance to remain profitable in the long term.
Braiins, the operator of the world’s oldest mining pool, Slush Pool, highlighted the main factors that should be taken into account in making decisions, and told about popular ways to increase the profitability of mining.
Bitcoin mining is based on the concept of proof of work (PoW), which requires a lot of simple calculations. Therefore, the most important factor affecting the profitability of mining is the cost of electricity.
The less the miner pays for electricity, the higher its income. The average cost of electricity consumed by large miners today is from $0.04 to $0.06 per kWh. However, large miners using thousands of devices can rarely find an energy source at $0.01 per kWh.
Thus, the decision on the feasibility of mining BTC is primarily influenced by the price of electricity. In the current situation, it makes sense to start mining at a cost of electricity no higher than $0.06 per kWh.
Choosing ASIC miners
Along with energy costs, another important factor to consider is the energy efficiency of ASIC miners. In other words, how many calculations can the devices make for each Joule of energy consumed. Since 2013, BTC mining is carried out by ASIC-miners, which are designed exclusively for calculating hashes using the SHA-256 algorithm. After their appearance, BTC mining on ordinary computers ceased to be competitive.
Progress in the production of ASIC miners has led to a new generation of equipment with impressive energy efficiency:
Whatsminer M30s with an efficiency of 38 j/Th
Bitmain S17 with an efficiency of 40 j / TX
Innosilicon T3+ with an efficiency of 42 j/Th
For comparison, the most popular in the history of BTC mining was the Antminer S9 from Bitmain, which is still widely used. This ASIC consumes about 98 j / TX, which makes it half as efficient as the next generation devices. Thus, each calculation costs more than twice as much on Antminer S9 as on modern ASICS.
However, do not write off the accounts of Antminer S9 and its peers – with the cost of electricity from $0.01 to $0.03 per kWh, mining can remain profitable. In addition, when working at reduced frequencies, the energy efficiency of old equipment increases due to a slight decrease in the hashrate. Conversely, the higher price of electricity can be compensated by high-performance ASIC miners of the latest generation.
Cheap electricity and modern equipment are not the only ways to get an advantage in the mining industry. Another opportunity to increase the profitability of mining is to optimize the firmware of ASIC miners.
In particular, it is possible to improve the performance of the devices using auto setup. It helps you find the maximum frequency of stable operation for each chip in the hash Board of the ASIC miner. In this way, the device is optimized to achieve higher hashing speeds with small changes in power consumption.
Auto-tuning is possible due to the fact that silicon is not perfectly uniform, so all chips are slightly different from each other. Some chips may work better than the basic settings. Autotuning is especially useful for miners with older hardware, such as the Antminer S9, because it can increase their profitable service life by several months.
For example, the recently released Braiins OS + firmware can increase the hashrate of Antminer S9 to 17 TX / s. Alternatively, miners who want to maximize device efficiency can use the Braiins OS+ Low Power mode to reduce power consumption by up to 65 joules/Technical characteristics in ideal conditions. This means that the profitability of the S9 can be increased by 20-30%, which will keep them competitive against the new generation of ASIC miners.
An important factor is that the firmware does not require pre-payment, its creators charge a percentage of the total hashrate.
One of the important points that you should think about in advance is how your ASIC miners will be cooled. The devices emit a significant amount of heat close to their actual power consumption. ASIC miners are often used to heat homes, greenhouses, garages, and industrial buildings around the world.
An important point is that silicon chips cannot work at high temperatures, which means that ASIC miners should not overheat. One of the modern solutions to the problem of overheating is liquid cooling systems. ASIC miners can be placed in containers filled with mineral oil, which does not heat up as quickly as the surrounding air. This type of cooling is called immersion cooling. Maintaining the circulation of this fluid allows you to prevent devices from overheating without having to purchase expensive air conditioners and create complex air flow control systems.
What is important, liquid cooling systems have an additional bonus – they reduce the noise level from ASIC miners. Even the operation of two devices can lead to an increase in noise levels up to 100 dB, which can damage your hearing within 15 minutes. In addition, the combination of immersion cooling with auto-tuning can further increase the productivity and profitability of miners.
Mining is one of the most valuable ways to participate in the Bitcoin ecosystem. Regardless of the mining level, miners contribute to the Bitcoin consensus and help maintain its decentralization.
At the same time, mining provides a stable income from BTC, so it is a great way to “invest” in a strategy similar to buying coins on a regular basis. The advantage of mining is also that the miner gets “clean coins” – that is, bitcoins that do not have a history, which allows you to sell them with an additional reward. Such coins are in high demand, since they will not be associated with illegal activities in the analysis of the blockchain.
Given the approaching halving
bitcoin, optimization of existing mining capacities is a necessary condition for maintaining profitability. Recall that in may, the number of BTC received in circulation approximately every 10 minutes (block rewards) will decrease by half – from 12.5 to 6.25, or on average from 1800 to 900 BTC per day.