Introduction to GPU mining
Brief Introduction to GPU mining
Crypto mining has continued to gain more public interest over the last couple years. Many boast massive profitability with minimal effort and attract much attention. Others share warnings to discourage the average person from investing in mining, as there is risk and high startup capital required. The truth of the matter is the reality of mining is somewhere in between. It can be expensive to start, but it can also be quite profitable if carried out correctly, and in an advantageous region.
The first step to understand crypto mining, and where to begin, is to understand what mining is. With a quick google search, many articles will pop-up and say mining is a process in which computers solve “complex math equations.” This statement is false. Miners use massive computing power to quite literally guess the correct hash (A series of numbers and letters) to create the newest block on the blockchain. When the computer guesses correctly, the blockchain protocol provides a reward to the miner for its work helping secure the network. Currently, in 2022, on the Bitcoin blockchain the reward given is 6.25 BTC.
There are two ways to mine bitcoin. The first method is with ASIC (Application-Specific Integrated Circuit) miners, which are industrial grade mining computers. They are extremely power hungry, and quite noisy. However, with affordable power (4 c/kwh or less) they are the most profitable form of mining. The difficulty these miners present is the challenge of sourcing them. For most manufacturers, there is little incentive to sell the miners as they are so profitable why not keep them? As a result, most ASIC mining is done on a large scale, where bulk orders are placed to justify the sales on the end of the manufacturer. Power rates are also much lower in commercial or industrial zoned areas, so more incentive to operate ASIC mines on a large scale.
The second way to mine crypto currencies is on GPU (Graphics Processing Unit) miners. GPUs, commonly referred to as “graphics cards,” are the backbone of any PC and are essential for gaming purposes. Many people, already own PCs with GPUs or can easily source GPUs themselves, which makes mining on them much more feasible than ASICs. They are also far less power consumer, and much quieter. GPU mining, may not be any way to get rich quick, but for the common crypto enthusiast, there remains plenty of incentives:
- Mining, if carried out over an extended period, can turn profitable and provide a solid return on investment
- GPU mining is an effective way to grow your portfolio as it allows for continual procurement of crypto, at a set quantity, regardless of the market price. Increase in token price; increase in daily profit.
- GPU mining is also an opportunity to learn about computers and crypto currencies simultaneously. The hands-on experience of building the computer and operating the software is a fantastic learning opportunity.
GPU mining is predominantly used to mine Ethereum tokens, but through many programs such as NiceHash, you can receive your compensation in bitcoin.
The world of mining is extensive and complicated, and to find out more (specifically about ASICS check out BRAIINS’ blog…
Parts Required
DISCLAIMER **DO YOUR OWN RESEARCH: THE FOLLOWING IS ONLY A SUGGESTION**
STEP ONE: Establish a budget
To get started you will need to create a parts list, which will fit your budget. Ultimately the cost of your rig, and the profitability will be determined by the graphics card(s) you chose to use. There are many online tools to calculate profitability by inputting local power costs and hardware.
STEP TWO: purchase parts
There are two main categories or parts. There are the standard parts, which will be the same no matter how big or small your rig is, or how many rigs you make. These are just the essential building blocks of a PC and have little effect on the overall rig. The other category is the GPUs and PSUs (Power Supply Units). The PSUs will be according to the number of GPUs.
Standard parts list:
1. Motherboard: This will determine the number of GPUs that can be attached. I recommend: https://www.amazon.com/gp/product/B08VGXKB9T/ref=ppx_yo_dt_b_asin_title_o06_s01?ie=UTF8&psc=1
2. Processor (CPU) I recommend: https://www.amazon.com/gp/product/B07SBKXDNS/ref=ppx_yo_dt_b_asin_title_o05_s00?ie=UTF8&psc=1
3. CPU Cooling Fan I recommend: https://www.amazon.com/Cooler-Master-i30-CPU-RH-I30–26FK-R1/dp/B07QQXCVVR/ref=sr_1_6?crid=TRC8HCES70BI&keywords=CPU+fan&qid=1642708178&sprefix=cpu+fan%2Caps%2C156&sr=8-6
4. Memory (RAM) I recommend: https://www.amazon.com/gp/product/B0143UM4TC/ref=ppx_yo_dt_b_asin_title_o06_s00?ie=UTF8&th=1
5. Storage Device (SSD) I recommend: https://www.amazon.com/gp/product/B01N0TQPQB/ref=ppx_yo_dt_b_asin_title_o06_s00?ie=UTF8&psc=1
6. PCI-E Risers I recommend: https://www.amazon.com/Osprey-Adapter-Mining16X-Powered-Ethereum/dp/B08NPV3K5N/ref=sr_1_6?crid=3AVH1GMP70MU7&keywords=pci-e%2Brisers&qid=1642659071&sprefix=PCI-E%2Caps%2C189&sr=8-6&th=1
7. Frame, this can be custom built if so desired. I recommend: https://www.amazon.com/gp/product/B09G6ZWJJX/ref=ppx_yo_dt_b_asin_title_o07_s01?ie=UTF8&psc=1
8. Network Connection. WIFI or Ethernet, the latter being preferable. I recommend: https://www.amazon.com/dp/B07P5PRK7J?psc=1&ref=ppx_yo2_dt_b_product_details
The next section will be determined by what price you are willing to pay. The GPUs will be virtually impossible to buy retail, so will have to be sourced by 3rd party means. Ideally only purchase graphics cards in sealed and untampered with packaging. For the purposes of this build plan, we will assume two NVIDIA RTX 3090s, which will only require one PSU.
GPU:
PSU:
- https://www.amazon.com/gp/product/B075SMMWRK/ref=ppx_yo_dt_b_asin_title_o06_s01?ie=UTF8&psc=1
- https://www.amazon.com/gp/product/B08KP9R92V/ref=ppx_yo_dt_b_asin_title_o07_s02?ie=UTF8&th=1
The last parts to pick up are just a computer monitor and keyboard. These will be necessary to interface with the miner. It’s also necessary to have a windows 11 boot or whichever preferred operating system you prefer. When all the parts have been sourced and there are no missing cords etc. then it is time to proceed with the build.
Construction
The actual construction of the miner is quite a simple process, but extremely delicate. The best approach is to follow a video tutorial on how to assemble each part and in what order.
Otherwise, here’s a guide for how to build it: Crypto miner steps. Assembly: Building a crypto miner is relatively simple. There are a variety of components that, found in a gaming or work on a computer, can be done away with. We are essentially going to build a test bench rig, and not transfer the kit to a case. Therefore, any ATX form factor motherboard, CPU cooler, chipset, ram speed or form factor (DDR4 vs DDR5), and storage type can be used. all the components used don’t necessarily need to be of a high grade and can be drawn from used sources. The core components of any rig are the PSU (power supply unit), CPU (core processor unit) and cooler, the Memory (Ram), the Storage drive, motherboard, and most importantly the GPU (graphics processing unit). GPU mining requires multiple GPU’s to be efficient, so special cables called risers are used to connect GPUs to the PIC-e terminals on the motherboard. The models we use are reductions from 48 pin to 16 pin, so all the terminals on the motherboard can be used. These GPUs are the most expensive components of the rig, so the riser cables also act like a fuse, protecting the graphics cards from a range of electrical dangers. Assembly is easy but requires attention to detail. The only tools required is a set of screwdrivers and a pair of pliers. Avoiding high static surfaces for assembly will be important, especially when installing the CPU. All the components, Fans, and cables are installed on a frame, we used a test bench, but any frame will work so long as it protects the components, prevents static, and helps keep good airflow passing through the rig for cooling and dust management. After all the components is put together (Consulting the Motherboard manual), you will need to plug the rig into a wall socket that can accommodate the power draw. Additionally, a monitor and HDMI cable will be needed to interact with the rig. If all the components work, the device will enter the motherboards BIOS menu upon activation. RGB lighting on components and fans turning are other indicators for which devices are receiving power.
Next is the setup. After entering the BIOs menu, selecting a boot drive and installing the operating system from a thumb drive, the device will take several minutes to boot. For our rigs we use Windows 10, which is very easy to set up and interface with. Once you have signed in with your Microsoft account, you will want to configure some settings to optimize, and protect the rig. Firstly, the firewall will not allow mining software to run properly. Therefore, using a VPN is critical to protect your rig. Next, disable any features that connect your account information to the device beyond the essential details needed for sign in. Setting the computer to not turn off is also important for continued mining, as the device will go to sleep without input even if the software is running. Once you are set up, you have an assortment of options for mining software, we are currently opting to use NICE HASH, as it is very user friendly, and easy to manage. Downloading the installer, launching the software, and entering your nicehash.com’s address into the blank field, is the extent of the setup. From that point on, opening the nice hash miner software will start up on its own. The entire rig can be remotely controlled by the nicehash.com terminal, and funds can be withdrawn or converted from the website.
- Source: Insiders explanation for how the process works
Software
GPUs are typically used to mine Ether (ETH), and while this is the most profitable currency to mine, the simplest and most user-friendly program is Nicehash. This program is what is known as a mining pool; in which you essentially offer your computing power into a “pool” of many others and the program runs on them collectively, giving the reward proportionately distributed between the computers. Nicehash will mine whichever “alt-coins” are most profitable at the current time but will pay you in Bitcoin. It is the simplest and most user-friendly method to get started in mining.
Once the computer is launched with Windows and a stable internet connection, navigate to Nicehash.com and download. Within 5 minutes your mining rig will be up and running. As the profits accumulate, you will have the option to send them to the wallet address of your choice.
Total Costs & Profitability
The ultimate question is how profitable mining is. In the case of the miner described in this article, the breakdown is as follows. The essential parts linked above will be purchased without much price fluctuation. The GPUs will be highly subjective, but for the purposes of this case study we will assume they were purchased for $2500 each. We will also assume that the monitor, keyboard, and operating system are already paid for prior to the miner build. With all this in mind the total price of the miner will be as follows:
The profits for the cards will be highly subjective on the current price of bitcoin, as well as the cost of power. For the purposes of this calculation, we will assume BTC with a price of $50000, and power costs 8c/kWh. By these numbers the cards will mine approximately $14 per day combined. This equates to:
14 months (419 days) until profitable.
*With an average market return in the stock market (8%) it would take over a decade to achieve 100% return!!
The other point to consider is that the payment from mining will be received in BTC, so the “profits” will possibly continue to appreciate over this time. As the price of Bitcoin rises, so will the miners return.
Cooling and overclocking
A simple way to increase your profits on your rig is to install what is called “overclocking” software. An example of this is MSI afterburner. This program will allow you to control various settings on your graphics cards and adjust them to make sure the hash rate is maximized, while keeping them from overheating. There is no explicit solution for the “perfect” settings. This process will be completely subjective.
An important concept to understand is the “silicone lottery.” Graphics cards are standardized by model with the same parts, manufacturing, and in theory capabilities. However, there will be natural fluctuation on the hash rate of a given card. This can be favorable or otherwise and it is completely out of anyone’s control. In addition, mining rigs take a while to optimize. The daily return will remain relatively low when the miner first start running, but after a few days of uninterrupted operation, the profitability will rise and then settle.
The last point to note is that miners will tend to get extremely hot. If this heat is not regulated the miner could be damaged. To avoid this, it is not recommended to mine in a warm climate, and in addition there are steps that can be taken to prevent overheating and keep the temperature regulated. Firstly, is to ensure the miner is in a location with good circulation, ideally a room with an AC unit that is constantly operating. On top of this there are supplementary computer parts such as fans and heatsinks which can be added as necessary.
Conclusion
Mining is certainly not for everyone, and it is in no way a get rich quick strategy. It can, however, provide a fantastic opportunity to learn about the crypto industry, and potentially make some consistent gains while doing so. Before any attempt is made at mining it is essential to do thorough research to make sure you understand all the potential risks, and whether mining is even possible in your region.
