Asic miners are application specific computers that are built for one purpose – to mine as fast as possible, and to use as little electricity as possible (actually that’s two reasons).
There is so much mis-information out there it’s incredible. Just the other day I did a search for the specific definition of ASIC (which is application specific integrated circuit chips), and I was taken to a site that says “miners used their CPU to mine, but soon that bogged down the system resources of the host computer.” False. I used to mine with my CPU (ashamedly, only briefly, otherwise I’d be filthy rich right now) and no, nobody cared about bogged down system resources – we only cared about hashrate. The higher the hashrate, the more Bitcoins you would mine, and that made you feel warm and fuzzy all over.
The big selling point for the best ASIC mining rigs is that they can hash faster than the others, and use less electricity per hash than the other miners – thus making them cheaper to operate.
Originally, Bitcoin was mined using GPU mining rigs, but once ASICs were introduced, it was no longer profitable to mine on a CPU or GPU – the difficulty went up so high that if you mined on a graphics card, you would pay more in electricity than you would mine.
Is Bitcoin mining profitable in 2018?
At first, yes it was. Now it isn’t. But – it might be again. I’ve got some explaining to do:
At first: When Bitcoin was at it’s all time highs in early January 2018, Bitcoin mining was taking off at a fever pitch. All of the best bitcoin mining hardware was sold out everywhere, and it seemed the only way you could get your hands on some of the newest Bitcoin Antminers was if you had millions of dollars to invest, and/or you knew someone on the inside at Bitmain.
However, if you did manage to get your hands on a bitcoin mining rig, or you owned one from 6 months back before the Bitcoin price shot to the moon, you were making money – really good money. With a single Antminer S9, you could be making about $20 per day before electricity costs (at $0.1 per kWh, your net would be around $17). An Antminer S9 was selling for around $2000 USD, which means that in a little over 117 days you would have paid off the bitcoin ASIC miner and you would be making a pure $17 per profit per day. Multiply that by 10 rigs, and you would have spent $20,000 USD, and in 117 days, you would be making $170 USD per day without needing to lift a finger.
Can you see why is was virtually impossible to buy a Bitcoin ASIC a few months ago? Of course, you could find them on sale on Ebay for thousands of dollars more, and many people were buying them. Those people now are crying, or homeless, or both.
Now it isn’t: At current Bitcoin mining difficulty and ASIC mining hardware prices, a single Antminer S9 costs around $2000 still, and will mine about $6.50 per day before electricity. After electricity (if you pay $0.1 per kWh like I do), you’re looking at about $3.50 of profit. That makes payoff on your Antminer S9 take around 570 days – and that’s a looooong time in cryptocurrency world! Things will change, but depending on how you think they will change will dictate what your move should be. Read on for details.
It might be again: There’s plenty of reasons to believe, and I do believe, that the cryptocurrency market is setting up for another explosion similar to what we saw in the second half of 2017. With giant investments from corporations all over the world and from private investors (like Peter Theil, Paypal cofounder, who recently purchased millions of dollars in BTC), and companies at the forefront of the cryptocurrency world like Coinbase making changes that puts them into compliance with the FTC and SEC, I believe there will soon be a flood of institutional money into bitcoin specifically at first, and that will flood out into the rest of the crypto market as a whole.
If you are convinced of this also, then that will dictate how you determine what the best asic mining hardware option is for you.
If Bitcoin goes back up to near $20,000, then you will, again, no longer be able to find any mining hardware for sale. So, now is the time to buy! Getting in now would have been like buying mining hardware in the middle of 2017, and then riding out the decrease in price prior to the BTC/BCH hard fork, and then getting to mine all during the last months of the year as the price of Bitcoin went up 600%!
Of course, there are no guarantees in life, and the price of Bitcoin could keep dropping and end up at $0, but I’ve bet thousands of my own dollars on that not happening.
How to choose the best ASIC miner
After you’ve decided to take the plunge, and invest some time and money into mining cryptocurrencies, you need to figure out how to select the best asic mining hardware for your needs.
- Algorithm – The first choice you need to make is what algorithm will you mine? Yes, you can mine a specific coin, but an ASIC miner is always calculating/mining a specific algorithm. There are often multiple coins using that algorithm, which allows you to switch to mining different coins if you want to. For example, the Bitcoin mining rigs use the SHA-256 algorithm, while the Dash mining ASICs use the x11 algorithm.
- Cost and Hashrate – These 2 go hand in hand, and actually there is a third factor – electricity usage. A slower hashing rig isn’t necessarily written off, if you can buy it cheap enough, and if the electricity usage is reasonable (or if you have free electricity).
- Find a reputable dealer – Scams abound, so be careful. I fell for one back in the Antminer D3 days – I wanted one ASAP and they were all sold out from Bitmain, so I went searching online, found a nice site, and sent them my Bitcoin. Only after a day or two waiting for an order confirmation email did I think to even look at the site – all of the social media links went to Google, the contact page had a map that pointed to some correctional facility in France, and there was no real data anywhere on the site. DON’T BE BLINDED BY A GOOD DEAL – if it’s too good to be true, you know the rest. Don’t be stupid like I was!
- Research, Research, Research and only spend what you can afford to! Don’t take out a second mortgage to buy mining hardware, don’t borrow your kids college fund. Only play with money you can lose, as it makes it more fun, makes it less stressful, and won’t take food off your family’s table
On this site, I attempt to explain all risks and benefits of searching for the best bitcoin mining hardware. If you have any suggestions or questions, don’t hesitate to contact me.
Here’s more sections on the site to continue your research: