Bitcoin Mining Guide: Part 1 — Getting Started
Setting up your first Bitcoin miner, joining a mining pool, and Fine-tuning Energy Settings.
Here are at XMAX, we operate large-scale mining operations across Asia, and as part of our mission to ensure Bitcoin stays decentralized, we would like to help you learn how to set up your own Bitcoin miners.
IMPORTANT NOTE: Please understand that there is no guarantee that you will make money mining Bitcoin. It’s actually much harder to mine Bitcoin from a small operation, and for this reason, most miners choose to join a mining pool (a group of miners working together).
This guide will walk you through some of the basics of Bitcoin mining and help you avoid some of the common mistakes beginners make when starting their cryptocurrency mines.
STEP 1: PURCHASE YOUR MINERS
Currently, there are two major manufacturers producing miners, MicroBT (WHATSMINER) and Bitmain(ANTMINER) you can purchase directly from their sites which we will link below:
Bitmain: https://shop.bitmain.com/
MicroBT: https://whatsminer.net/shop/
When purchasing your miner’s, you’ll want to pay attention to two main points:
1) How much hash power does it have?
2) How much electricity does it use?
The first point helps determine how much Bitcoin you’ll be able to earn as part of a mining pool. The second determines if your miner is profitable, and also how long you can use your miner.
We recommend you focus on finding a miner that gives you a good balance between electricity usage and power so that you can keep mining well into the future.
Also, make sure to stick with established mining brands, if you find a cool looking miner online that’s marketed to consumers, then you really need to look at their hashrate and electricity usage figures. We’ve seen some online mining companies selling miners without listing hashrate, and this is a figure that you really need to know before you start mining.
So if you’ve ordered your miners and are ready for step 2, you can skip the next “Advanced Topic” section, but reading it will help you understand how you can start competing with more established mining companies.
Advanced Topic: Miner Shutdown Cost & Industrial Electricity Rate
So every miner has a point where it costs you more money in electricity to operate your miners than you are earning in Bitcoin. The reason big companies invest millions of dollars into buying the latest miners with 7nm microchips (the thickness of the microchips is measured in nm — or nanometers) is that they will be able to keep running their miners even when the price of BTC falls and have a better chance of earning back their investment.
So if you are running miners with higher electricity usage such as 1 Kilowatt per hour or more, you’ll need to find very low electricity rates to run them.
The way big mining companies can make sure their profits are stable is by using industrial electricity. This type of electricity is sold to customers who use large amounts of energy and is negotiated at a stable rate and can include long-term contracts. This allows mining facilities to get power at a much lower cost, and without seasonal or “Peak-period” charges, your power company probably charges you.
To show you just how low rates the electricity rates can go here are the states with the lowest averages for industrial electricity in the US:
- Washington: 4.37 cents per kWh
- Montana: 4.72 cents
- Oklahoma: 5.14 cents
- Louisiana: 5.15 cents
- Arkansas: 5.23 cents
- Nevada: 5.37 cents
- Georgia: 5.54 cents
- Texas: 5.57 cents
- Kentucky: 5.62 cents
- New Mexico: 5.62 cents
You can even go lower than these rates with a proper contract and an experienced negotiator.
And to put these prices in perspective, here are the average electricity rates for the state of Texas: $10.98 with some customers paying much more.
So mining from home is going to be many more times expensive than mining from a mining facility with a contract for industrial electricity.
STEP 2: MINER SETUP & JOINING A MINING POOL
You’ll need to follow the instructions for setting up your miner. Normally the process involves connecting an Ethernet cable for internet access, plugging your miner in, and then navigating to your miner’s admin panel by visiting its IP address in your browser from a computer connected to the same network.
Here is a screenshot of the admin panel (source: s9 Miner Manual).
As a first time miner, you may have trouble finding the IP for your miner. The best way to handle the setup process is to search for the manufacturer’s official manual. They will typically also suggest a tool such as IPReporter.exe to help you locate the miner’s IP.
Once you have found your miner and accessed the control panel, you can add your mining pool account information and start mining.
This is an excellent article with more information on mining pools and how to choose a pool to match your interests.
https://www.buybitcoinworldwide.com/mining/pools/
There is also advanced control software available that makes it possible to control many miners simultaneously.
STEP 3: OPTIMIZE YOUR MINER’S SETTINGS
If you are out to make a profit mining Bitcoin you’ll need to make sure that you also know how much electricity you’re using, and one the best ways to figure this out is by buying an electricity meter that you can plug your miners into.
Amazon currently sells an electricity meter for around $12-$13:
Once you know how much power you’re consuming on the normal operating mode, you can enter the admin panel settings on your miner and adjust its hashrate. Choosing a lower hashrate setting means that your CPU will work less and in most cases you’ll consume less power.
The trick is that you need to experiment with how much power you consume versus the hashrate output. Once you find a level that you’re comfortable with and that is profitable you can set all of your machines to the same setting.
That’s most of the process for mining Bitcoin with mainstream miners.
LEARN MORE ABOUT MINING — SUPPORT THE BITCOIN NETWORK
XMAX (XMX) is a blockchain project that is re-decentralizing the Bitcoin network by building extensive hashpower (currently over 730 PH/s) and giving this power to the community.
If you would like to get involved with the project and help with the mission, contact us on Telegram, and we’ll put you to work protecting Bitcoin and our decentralized future.
Telegram: https://t.me/XMAX_XMX
Twitter: https://twitter.com/XMAX_XMX
Facebook: https://fb.me/XMaxTokenXMX/
Medium: https://medium.com/xmax-xmx
Reddit: https://www.reddit.com/r/XMax_Blockchain/
Official Site: https://xmx.com
