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What should a beginner miner know

28 August 2017 10:50, UTC

Cryptocurrency has recently found its second wind, the video cards are sold like hotcakes, while shares of NVIDIA Corporation are up by over 50% this year. The thought of building a small mining farm, plugging in and getting in fact a machine for printing money is really tempting. All this turns the heads of many beginner miners. But is it really that simple? Of course not, mining as well as any business must be treated very carefully. In this article, I'll try to caution beginner miners against the possible mistakes and loss of money as a consequence.

The first thing you need to figure out is what and how you plan to mine. If you do not have large financial resources, about several million dollars, bitcoin mining seems pointless to me.

Therefore, I would recommend to mine altcoins by using GPU. I mean such cryptocurrencies as for example Zcash, Decret, Ether, etc. It is necessary to constantly monitor the current exchange rates and hash-rate of their networks, e.g. here. It's better to decide what and when you plan to mine based on this data.

So, let's say we made up our mind and decided to mine Ether with graphic processor. It should be realized that if you built a relatively small farm, let's say 25 kW, then doing solo-mining will be completely pointless, since 25 kW for Ether network is a drop in the bucket.

Your farm can work incredibly long, without getting a reward for mining a single block. In that case mining becomes a kind of lottery you have no chances to win. Therefore, joining the pool is more likely to bring you regular payments.

Of course, any pool is a commercial project, and of course it will charge you a commission fee, and sometimes it may be quite disproportionate. Therefore, choosing a pool is also not so easy for a beginner miner.

When choosing a pool for mining, one should pay attention to the following points:

reward system;
commission charged for mining and withdrawal;
how often blocks are found (that is, how often will you receive a reward);
withdrawal process;
what statistics do they provide.

I'll take a more detailed look at the pools, their pros and cons, in one of my next articles.

When starting to mine, do not forget about the wear and tear of equipment. As with any chip, a video card has its own life resource, and if it works 24 hours a day, of course this term is reduced.

And this fact must be taken into account when calculating potential profit from mining. To extend the life cycle, it is necessary to monitor the temperature of your video cards and try to keep it in optimal condition. It can be different for each graphics processor and must be specified by the manufacturer.

In conclusion, I would like to note that quite often, it is more profitable to simply buy growing cryptocurrencies rather than investing in their mining.

To be continued.