Image Source: https://pixabay.com/photos/gold-cryptocurrency-money-finance-3080552
Some people make a living with crypto day trading. Others love to invest, and enjoy their gains that way. But there's one group of people that's lurking in the shadows. And if you listen close, you can hear the gentle humdrum of all their aggregated computing power.
They’re crypto miners, and the good ones make a ton of money, irrespective of whether the market moves up or down. Sounds exciting, doesn’t it?
But before you run off and grab your pick and shovel from the closet, put your mining helmet down for a sec and hear me out. We're not the workers who do the mining.
Our computers are.
Yep. You read that right. Our computers are capable of solving incredibly complex algorithmic puzzles. Whenever these puzzles are solved, miners receive a reward in the form of the token they're mining.
Let's take a look at how we can get your computer to do just that, with GPU mining.
What is GPU mining?
Image Source: https://pixabay.com/photos/pc-calculation-technology-mining-2810957
Mining cryptocurrencies goes all the way back to the OG of cryptos: Bitcoin. Bitcoin has the distinction of being the first mineable crypto too.
Back then, your Central Processing Unit (CPU) could handle all the mining operations you threw at it. Once the computational puzzles got too hard to solve with just a CPU, though, GPUs were necessary. Then came application-specific integrated circuits (ASIC), which are miners dedicated exclusively to crypto mining. (We won’t concern ourselves with ASICs in this article, but you can read more about them here.)
For our purposes, we need look no further than the GPU, which stands for "Graphical Processing Unit". Your GPU is actually a non-essential component of your computer. This is because, these days, your CPU is powerful enough to handle most everyday tasks.
Think about how you spend your days on your computer. The most intensive app you run might be a movie app. Your computer doesn't need a GPU for you to watch movies. And today, even cheap laptops come with a GPU soldered onto the motherboard.
Without a separate, dedicated GPU, though? Your chances of running newly released games smoothly are slim to none.
See, that's what GPUs are designed for: Gaming. But it turns out, you can use this special piece of gaming hardware to mine crypto... and make a killing—if you do it right.
If you’re hesitant because you’re wondering about the legal ramifications, you’re not alone. There are still many questions surrounding GPU mining, with many asking whether it's even legal. Well, let me reassure you right now, dad. It's 100% legal (that is, unless you live in China).
This is in large part because regulators have only started looking at mining in the last few months. And because regulators are eyeing the markets first, miners have been afforded some breathing room for the foreseeable future.
Which coins can you mine with a GPU?
Image Source: https://www.pexels.com/photo/woman-in-white-button-up-shirt-holding-white-ceramic-bowl-8369592
The coins you can mine with a GPU can change over time. First, mineable coins have to fall under the proof-of-work (PoW) consensus mechanism. This means that the coins, by design, have to have mining as the incentivization scheme for maintaining the network.
For instance, although Ethereum falls under PoW right now, it’s planning to shift to Proof of Stake (PoS) for Ethereum 2.0.
Second, the crypto mining difficulty increases over time. To address this challenge, we need to continue to supplement more power to our mining operations to continue solving these progressively complex puzzles.
Third, we have to confirm that the coin you want to mine is profitable. Profitability depends on additional criteria, like picking the right pool from an endless sea of mining pools, and making sure your mining performance is up to par.
Technically, you can mine any coin that's based on PoW. In reality, though, these three factors we’ve covered should give you clarity about which coins you don't want to mine. In the end, you'll be able to select from only a handful of choices.
At the moment, the three most profitable and popular coins to mine with a GPU are:
- ETH (Still the most popular coin to mine, despite the release of Ethereum 2.0 having been delayed several times, thus introducing uncertainty)
- ERGO (a project with insane potential on the Cardano blockchain; not financial advice!)
- RVN (Ravencoin, which appeals to miners who believe in the ASIC-resistant ethos. What's that? The principle that crypto mining should not be cost-prohibitive for the price to act as a barrier to entry.)
What do I need to get started with GPU mining?
Image Source: https://www.pexels.com/photo/computer-computer-keyboard-contemporary-display-257881
So what mining equipment do you need to get started with GPU mining? A GPU. Duh!
On a serious note, if you have a decent gaming computer, you can start using it as a cryptocurrency mining rig right away. Once you pick a coin, just look for one of our dedicated mining guides.
If you don't have a GPU, though, buying one can get expensive (like “digging up buried treasure in your backyard to afford one” expensive).
That's because the world is currently experiencing a major graphics card shortage. See, scalpers are snatching up all the GPUs in bulk as soon as they go on sale, leaving nothing for us poor gamers and miners.
This has actually resulted in a serious challenge to miners and gamers alike. In fact, Nvidia, the leading GPU provider, has released its new graphics cards with a Lite Hash Rate (LHR) feature. This feature is intended to limit the hash rate, thereby disincentivizing miners from purchasing them.
Have miners been deterred? Not even a little.
Mining devs are working around the clock to crack the algorithm, and we've managed to overcome 70% of the imposed limits for mining.
So what's the issue?
Well, scarcity leads to greater demand, which in turn leads to increased costs. Since scalpers have been buying up all the GPUs and charging a hefty price for them, some of them have been able to sell them off at 4x the retail price!
This is the biggest roadblock you'll run into when getting started with GPU mining. The other parts you need are standard computer components, as long as you want to build a personal computer that can mine as well. These components are:
- A CPU
- Standard motherboard
- Hard drive
- Power supply
- Random Access Memory (RAM)
- Cooling system
- Gorgeous case
- Peripherals like a monitor, and a mouse and keyboard
Once you've built your personal mining computer and you've got it running, you're going to need to install a mining program and pick a mining pool. These factors ultimately depend on which coin you choose to mine, so be sure to check out one of the guides listed above once you've made your decision. The guides will give you step-by-step instructions of the mining process.
How to build a dedicated GPU mining rig?
Image Source: https://pixabay.com/photos/farm-mining-the-ethereum-market-2852025
If you want to get your hands dirtier with a powerful mining rig to the envy of your friends, here's how to do it. Maybe you've got a GPU dealer who's sitting on six 3080 non-LHR cards and wants to sell them off at MSRP. (One can dream!)
A dedicated GPU mining rig is a bootstrapped computer designed specifically for mining. It does nothing else but mine, so it can’t double as a personal computer. The parts are similar to what we listed above for the personal mining computer, but with a few key differences:
- A CPU (can be much cheaper, because the rig will be GPU-focused, thus drawing minimal power from the CPU)
- A mining motherboard (This is the biggest differentiator from the personal mining computer. These motherboards have multiple slots for GPUs, and are thus designed for mining.)
- Hard drive (can be a standard Solid-State Drive)
- Power supply (If you’re aiming to equip more than 6 graphics cards, then you need at least 2 power supply units at 1200 watts each to let your rig run smoothly)
- Random Access Memory (bare minimum required)
- Fans, fans, and more fans (for cooling because thermal throttling is a real issue with graphics cards)
- A metal frame to store everything (Cases won’t work because the enclosed space traps too much heat)
- Risers (GPUs can get quite big. These GPU mining motherboards also have multiple GPU slots. Placing the GPUs next to one another will generate too much heat. Enter Risers. They're extendable cables that can connect GPUs to the motherboard, affording GPUs a little space.)
And of course, keep an eye on your electricity bill. In my experience, having a mining rig equipped with 6 high-powered GPUs will run an extra US$500 every month, based on local electricity fees. With every GPU you add, the costs go up, so it's always a good idea to estimate your profitability and electricity costs before jumping into mining. (Here's a mining calculator so you can do just that.)
If this in-depth overview lit a fire under you to get started with GPU mining, keep in mind that we've barely scratched the surface. If you're serious about mining, make sure to check out one of the specific coin mining guides we linked above so you can get started right away.
Happy mining!
Valerioshi is the 4th president of X+, one of the most exclusive communities in web3, for holders who hold 10 or more DeGods. Along with the burn team, he led the CryptoPunk burning campaign for DeGods, successfully raising more than US$100,000 in under 30 hours. He runs Degen Reports, and is host of The Degen Hour as well as the X+ Sigma Lounge, both weekly Twitter spaces. Follow the author on Twitter @valerioshi_
Or check it out in the app stores
