Let’s start with history of mining Bitcoin
Bitcoin mining is dominated by inconceivably huge mining facilities. The largest has over $300,000,000 worth of ASIC-powered computers. So I don’t see any way for mere mortals to participate, although if any of our readers are still making it work for them let us know in the comments. Perhaps fortunately, the “Bitcoin bubble” quickly expanded past BTC.
Mining Ethereum (ETH) Using Desktop GPUs
Assuming you have or can find a decent discrete GPU — or ideally, more than one — it’s incredibly easy to get started mining Ethereum. When I first wrote about mining BTC years ago, you needed to have a full node on the network, your own wallet, and probably establish yourself with a mining pool. Now, if you have an account at a cryptocurrency exchange that accepts ETH, like Coinbase, you can just use your wallet address from that account with mining pool software.
Unless you have a large number of GPUs to put to work, you’ll probably still want to join a mining pool. They’ll take a fee, but often that is only 1 percent. In exchange, you get a share of the proceeds from a large number of miners, rather than relying on your own probably meager chance of mining an entire coin on your own.
I tried mining with amd and nvidia gups. I found that the CUDA version in particular enabled my RTX 3090 to produce hash rates of around 110Mh/s at full power and 100Mh/s after I throttled it back to keep the memory a little cooler. My AMD GPUs weren’t competitive until I installed AMD’s custom crypto driver.
As another experiment, I tried mining on my laptop Quadro T2000 GPU. It never managed to get above 3Mh/s, so that was a not-unexpected dead end.
If you’re up for a little more work, then mining applications like Claymore, Ethminer, and Phoenix miner give you more control and increased flexibility in choosing pools and coins to mine. ETHPool and Ethermine are two other, more established pool options. The coins you mine will determine how much GPU memory you need and tends to grow over time. Ideally, an 8GB or larger GPU will give you the most flexibility. One big change is that next year ETH is planning to move to a proof-of-stake method of mining to save energy. If that happens, GPU mining won’t work for Ethereum beyond that point, and you’ll need to switch currencies.
Bitcoin mining after China crackdown
- More than 54% of bitcoin’s hashrate, which is the collective computing power of miners worldwide, has dropped off the network since its market peak in May.
- The bitcoin code has re-calibrated to make it 28% less difficult to mine.
- Miners who are still plugged into the network stand to make greater profits while most of the network’s miners remains offline.
It just became a whole lot easier and much more profitable to mine for bitcoin.
The world has known for months that more than half the world’s bitcoin miners would be going dark as China cracked down on mining. Now that it’s happened, the bitcoin algorithm has adjusted accordingly to make sure miner productivity doesn’t continue to fall off a cliff.
That adjustment – which took effect early Saturday morning – also means that way more cash is going to the bitcoin miners who remain online.
“This will be a revenue party for miners,” said bitcoin mining engineer Brandon Arvanaghi.
Mining made easier
Fewer people mining means that fewer blocks are solved each day. Typically, it takes about 10 minutes to complete a block, but Feinstein told CNBC the bitcoin network has slowed down to 14- to 19-minute block times.
Fewer competitors and less difficulty means that any miner with a machine plugged in is going to see a significant increase in profitability and more predictable revenue.
“All bitcoin miners share in the same economics and are mining on the same network, so miners both public and private will see the uplift in revenue,” said Kevin Zhang, former Chief Mining Officer at Greenridge Generation, the first major U.S. power plant to begin mining behind-the-meter at a large scale.
Assuming fixed power costs, Zhang estimates revenues of $29 per day for those using the latest-generation Bitmain miner, versus $22 per day prior to the change. Longer-term, although miner income can fluctuate with the price of the coin, Zhang also noted that mining revenues have dropped only 17% from the bitcoin price peak in April, whereas the coin’s price has dropped about 50%.
It is hard to predict how long the hashrate deficit will last. Barbour said that it is totally possible that Beijing could simply reverse their policy, and this could only be a short-term interruption.
Of all the possible destinations for this equipment, the U.S. appears to be especially well-positioned to absorb this stray hashrate. CNBC is told that major U.S. mining operators are already signing deals to patriate some of these homeless Bitmain miners.
U.S. bitcoin mining is booming, and has venture capital flowing to it, so they are poised to take advantage of the miner migration, Arvanaghi told CNBC.
“Many U.S. bitcoin miners that were funded when bitcoin’s price started rising in November and December of 2020 means that they were already building out their power capacity when the China mining ban took hold,” he said. “It’s great timing.”
But Barbour believes that much smaller players in the residential U.S. also stand a chance at capturing these excess miners.
“I think this is a signal that in the future, bitcoin mining will be more distributed by necessity,” said Barbour. “Less mega-mines like the 100+ megawatt ones we see in Texas and more small mines on small commercial and eventually residential spaces. It’s much harder for a politician to shut down a mine in someone’s garage.”