Mining crypto yourself: Which coins and what do you need?


Many people nowadays have heard about bitcoin and other cryptocurrencies. But if it has piqued your interest, how do you get started? Which coins are the best investment and which hardware do you need? If you are at the start of your career as a digital prospector and want to mine crypto yourself, read on.

The new video cards from Nvidia and AMD are highly coveted and almost unobtainable. It’s not so much that gamers run away with it, but a generation of miners who pile them up in a ‘rig’. Whoever has obtained such a card can earn it back in a few months. Although that is somewhat speculative given the price changes.

Cryptocurrencies, like gold and silver, are seen as a long-term investment to maintain purchasing power, for fear of the inflation of ‘fiat money’ printed in huge quantities. Bitcoin is the largest and best-known digital currency, but there are already about nine thousand alternatives, which are called altcoins.

Specialized machines are used for mining bitcoins, which are also called asic (application-specific integrated circuit). Ethereum was actually developed to counter this, allowing users worldwide to mine with a modern video card. We will go deeper into this in this article.

What is mining?

To understand mining, it is useful to know something about the blockchain. The blockchain is often compared to a ledger in which all transactions are collected in blocks. The miners verify the transactions and record them in the blockchain.

Bitcoin and the current Ethereum operate on the principle of proof-of-work. The computer that is the first to solve a very difficult calculation may start a new block and will receive a reward for this. We call this process mining and it requires a lot of computing power. This computing power is called hashrate and is widely distributed over the many computers in the network. Therefore it is virtually impossible to manipulate transactions, this would require 51 percent of all computing power.

The time between each block should remain approximately the same. Therefore, there is a mechanism that increases the difficulty as the computing power increases. However, this reduces the yield for mining. Mining bitcoin is therefore only profitable with specialized machines in countries where the electricity costs are low. Fortunately, there are other cryptocurrencies that can be profitable to mine, with your own hardware.

Which coins to mine?

It has not been interesting to mine with a processor (cpu) for years. The situation is different for video cards (GPUs). Very strong, for example, are the 3060 Ti and 3080 from the RTX 3000 series from Nvidia and the latest models from AMD, such as the RX 5700 and RX 6800. The video card should preferably have a high video memory bandwidth and also more than 4 GB of video memory. The two-year-old AMD Radeon VII is also a good option.

The list at whattomine conveniently shows which so-called hashrate you can expect with which video card and what the profitability is per day. First enter the correct electricity costs at the top right. For the aforementioned video cards, the profit is now about four to six euros per day, which comes down to 180 euros per month.

If you have solar panels, the profit is even higher due to the cheaper or free electricity. Within four months you have already earned back the video card. At Ethereum, the high price that was around 600 euros at the beginning of the year and bumped around 1,500 euros in March helps with an upward trend. But it is always a snapshot. We therefore show you how to make the sum.

On Whattomine you can ‘turn on’ the video cards you have at the top and possibly change the number. below cost enter the electricity costs. Then click Calculate. Below that you will see a list with the revenues per crypto currency. In addition to the name (such as Ethereum), you also see the algorithm here, such as Ethash for Ethereum.

In the box for Ethash you can adjust the hashrate and the power consumption afterwards. The hashrate can deviate slightly when you start mining, depending on the quality and settings of the video card. Also, the actual power consumption is sometimes higher because other components require power, such as the processor. A regular PC isn’t as efficient as a multiple video card setup. We recommend checking the power consumption!

Buy video card for mining

In addition to electricity costs, you should not forget the possible purchase and depreciation for the video card, although it is possible that you already have the video card for daily computer use or playing games. Mining can optionally continue during PC use. When the graphics card is loaded, the mining is a bit slower.

The PC can also make more noise than you’re used to, but we’ll explain how to control that. A small risk is that the lifespan of the video card decreases somewhat, although opinions differ on this. In any case, we recommend that you do not push the limits.

Mining pool and wallet

Completely independent mining is only for the big ones. Although the fee for solving the calculation is large, the chance that you will solve it with limited hardware is very small. More realistic is joining a large mining pool where you share the proceeds with other miners.

Furthermore, a wallet is needed where the proceeds can be credited. As an example we use a mobile wallet: the Android app Coinomi.

Via the option Fast wallet creation you create the wallet to which you then add Ethereum. Important: On the overview screen you will see an option to make a backup, where you copy a series of words on paper. This is necessary to be able to recover the wallet in case of loss. click on Ethereum or go through the menu to Assets, Ethereum and then go to the tab Receive. Note the indicated wallet address.

Start mining

A well-known option to start mining is NiceHash, where you basically rent out your computer power through software. The software chooses the best cryptocurrency to mine, which is currently Ethereum. Regardless of that choice, you get paid in bitcoin, with something remaining for NiceHash.

It’s a popular option, but 2017 was a little different. Then the Slovenian company was hacked and many bitcoins were lost. That is why we prefer to join a mining pool such as Ethermine and have the payments go directly to our wallet. We use PhoenixMiner 5.5c, although there are other options as well.

After downloading, extract the zip file to a folder on the PC. Then click on the right start_miner.bat and choose edit. You only need to change the wallet address here, by entering your own wallet address there. The name Rig001 after it (after a period) you may change it to the name of the relevant PC.

When you’re done, click on the right start_miner.bat and choose Run as administrator, after which mining will begin.

Is PhoenixMiner a virus?

There are some minor barriers to mining. For example, Chrome can protest when downloading. You can temporarily disable security via Chrome’s settings. Also Windows Defender in action and may delete the executable file (PhoenixMiner.exe) even while mining. The mistrust is easy to explain. Potentially, someone – a virus – could be mining your system for their own gain. You can optionally exclude the folder:

Windows Defender sees PhoenixMiner as a pua (‘potentially unwanted application’), under the name Win32/CoinMiner or Win64/CoinMiner. You can manually allow these threats. However, it is more convenient to exclude the miner folder for virus scans. To do this, open the Windows settings and go to Update & Security, Windows Security.

click on Virus & Threat Protection and press under the heading Virus & threat protection settings on Imanage settings. Choose now under Exclusions the option Add exclusions or remove. In the next screen you can Click Add an exclusion followed by folder. Then browse to the PhoenixMiner folder and choose Select folder. The entire folder is then excluded from virus scans.

However, be careful with everything you do, there are plenty of privateers on the coast. Once the miner does its job, you can track the hashrate and payouts via ethermine.org by entering your wallet address. There may be a slight delay.

With the combination of a 3060 Ti and 3080 we get paid weekly because we get just above 0.05 eth, with just one video card it can take a week longer. You do not have to pay transaction costs, these are for the account of the mining pool.

Optimize mining

Some optimization is desired, so that the power consumption is limited while the hash rate increases. There is simply a lot to gain. We use the free software MSi AfterBurner. The most important controller in it is the Power Limit, the power going to the card. Depending on the video card, this can be reduced to about sixty to seventy percent.

Also fit the Core Clock and Memory Clock On. Mining is memory-intensive, so the Core Clock can be lowered and the Memory Clock higher. Keep in mind: every card is different, so experimentation pays off. With the adjustments on the 3060 Ti we saw the consumption decrease from about 210 to 120 watts, while the hashrate went up from 50 to 59. On the 3080, the consumption decreased from about 320 to 220 watts and here too the hash rate increased.

The temperature of the video chip with the RTX 3080 appears to be quite stable at around forty degrees Celsius and may be above seventy degrees. But there is a catch. The temperature of the video memory can get too high with these cards, depending on how the video memory is cooled.

With HWiNFO64 can you monitor this temperature by using the GPU Memory Junction Temperature in the list of sensors. The upper limit is 110 degrees, but the performance will already be reduced or the system may crash (without further consequences, by the way). We prefer to keep this value stable around 90 to 95 degrees.

Payout

When mining you are rewarded with ethers (eth), but the exchange rate of course determines what you have earned in hard euros. If you don’t want to hold them, which is what the beautiful term hodl was coined for (hold on for dear life).

For trading, such as converting to other cryptocurrencies, cashing out or perhaps buying additional cryptocurrencies – you can create an account with a trading platform or exchange, such as bitvavo or binance. The Netherlands-based bitvavo certainly works very simply. For example, you can deposit a credit via iDeal or have it paid out to your bank account.

How long?

Ethereum mining will not remain interesting for much longer due to changes in the Ethereum network. First in July comes the change called EPI-1559. This should solve the problem of the high transaction costs, but will reduce the mining fee by an estimated thirty to fifty percent. It can have a positive effect on the price.

The biggest change is the move to Ethereum 2.0, which has been in a trial run alongside the current network for a while, although the release has been delayed many times. The new network works according to proof-of-stake, in which a party in the network is actually designated to create a new block, based on its share (‘stake’) in the cryptocurrency. That party receives a fee for processing the transactions on the blockchain. It puts the miner offside.

There may of course be other cryptocurrencies that are interesting to mine and that change the playing field. Keep in mind that if a large group of Ethereum miners suddenly starts mining another crypto, such as Ravencoin, Conflux or Cortex, the difficulty will increase and the fee will be lower.

The market is constantly changing, so the last tip is to follow this news closely!

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