Short Review of the Crypto Mining Landscape 2018

Mining is a major aspect of cryptocurrencies and in the most simple way possible it can be seen as bookkeeping whereby as a miner, you verify transactions to be added to the public ledger, whilst making a fraction of the coin. It’s used as a method to not only release new coins into circulation, but also keep up with the use of distributed networks (there isn’t a central figure observing and verifying the transactions, but rather a public acknowledgement once a transaction is made that is accessible by everyone on the network).

There are three technical mining solutions:

1) CPU mining is arguably the easiest, whereby a user can use the ‘brain’ of their computer (the Central Processing Unit) to process the calculations required by the cryptocurrency, be it at a slower rate.

2) GPU mining is done by replacing the initial use of CPU power with the Graphics Processing Unit of your graphics card, it’s considerably faster in computing calculations than a CPU chip would be, and could have a set up where a ‘rig’ is designed with just graphics cards to utilize the GPU computational power.

3) Stake mining — this is where the more coins a miner holds (forming “nodes”), the more processing power they hold in order to verify transactions and get their rewards.

Looking into mining ‘rigs’ or gear, there’s multiple means setting up a relatively decent performing system. To begin with, we’ll delve into the world of Graphics cards, between AMD and Nvidia, disputes come up in regards to which one has a better output, and as such research needs to be made in order to best suit ones performance expectations, electricity costs and overall cost-to-profit ratio. Websites exist to allow one to best decide for themselves based on research already having been conducted, however it should be noted that in certain countries due to the limited stock, stores place a limit on how many graphics cards one individual may be capable of buying. ASICS or Application Specific Integrated Circuits are considerably the best for mining, as they’re dedicated to the job — when it comes to deciding on what mining ASIC to purchase, factors such as Hash-rate, efficiency and price all come into play. It should be noted that the more electricity an ASIC uses, the higher the conversion output should be (in theory).

So Who Makes Them?

When it comes to ASICs and the manufacturing of, Bitmain is known to be the one that started it all — the Antminer is a name that resounds as the gold-standard for Bitcoin miners as the hash-rate and efficiency of the Antminer is considered the benchmark for all other ASICs’ to be based against. Canaan Creatives and their Avalon Miner is another well-known name in the ASICs manufacturing industry, alongside Ebang, with the E-series miner and Halong Mining bringing the DragonMint miners. All of them originate from China.

What Other Forms Of Mining Are There?

There are other forms of mining that are currently available and being utilized, one is Web browser mining — this is where a code is embedded into the website, (usually) allowing users to opt in and thereby use their CPU/GPU processing power to mine whilst browsing the site, creating revenue for both themselves and the website. The other is Cloud mining, a service whereby one can utilize shared processing power from remote data centres in order to mine, this is considered an easy solution to the needs of miners who don’t want to invest in the hardware, as all that’s required is a computer that is connected to the internet. There are subsections in the contracts that could be made with these service providers, wherein one can simply lease a physical mining server, or upload their mining software on a virtual private network, or lease the hashing power for a specific period of time.

Each method of mining provides advantages and disadvantages:

Advantages:

Using Hardware:

• Yields best results
• You choose when to mine, and how to mine
• More research is required for this type of mining, and as such miners are more educated in cryptocurrencies and blockchain

Using Web Browsers:

• Easy to get started, all that’s required is internet access
• Retain users by offering an incentive to keep using your website
• Scarcely used considering the bigger picture, large growth potential.

Using the Cloud:

• Relatively easy to set up as it’s contract based
• Occupies no physical space nor does it produce noise

The disadvantages however:

Using Hardware:

• Expensive to buy/build
• Expensive to run due to electricity costs
• Requires monitoring of cleaning, cooling and performance

Using Web Browsers:

• Cryptojacking exists, sometimes user’s aren’t notified of their CPU/GPU processing power being exploited
• Lesser returns as traditionally it is less performance based

Using the Cloud:

• Scammers exist, site offering the service could be fraudulent
• Operating costs must be accounted for, meaning lesser returns

Currently in the world of mining, the two most used methods are ASICs and GPU rigs, and both of them offer their advantages and disadvantages, however when it comes to expecting a higher payout, ASICs are the one to go for, with Bitmain currently being the main provider of ASICs, holding a market share of 70% in comparison to its competitors. As it originally began with CPU mining, and moved onto GPU mining, ASIC mining is considered to currently be the top-end of the spectrum, yielding the best results, as dedicated mining equipment.

In conclusion, mining can be done through different methods dependent on the payout one is looking for, whether it would be considered a hobby through cloud/web browser mining (where lower returns are to be expected) combined with the simple wish to help secure a network, or potentially a second income through the use of hardware mining in the likes of ASICs/dedicated GPU rigs. The solution proposed by Gath3r is as well based on mining (web-browser mining), showing a glimpse of the different possibilities in which these processes can be turned into beneficial and profitable solutions. There are advantages and disadvantages no matter the route you choose to take as with everything, certain factors need to be taken into account. As it stands, if one seriously plans making a large portion of their income from mining, they must look into doing the research more in depth in order to best decide for themselves what method suits their needs and wants.