The two most popular ways of getting your hands on some cryptocurrency are either by buying it or by mining the crypto in question. While buying and trading cryptos is the usual way brokers, entrepreneurs, and companies gain ownership over digital currency, numerous crypto enthusiasts choose to personally mine a certain crypto asset.
The two most popular cryptocurrencies with some of the highest trading volumes and market capitalization are Bitcoin (BTC) and Ethereum (ETH). These first two currencies are also the most popular ones for mining, but even some less popular cryptos like Litecoin (LTC) and Monero (XMR) are also attracting increased numbers of miners.
Naturally, both individuals and crypto mining companies (that have mining farms with hundreds of specialized mining rigs—computers designed for mining cryptos) choose to mine the cryptos that are currently the most profitable digital assets for investing.
However, one of the key factors to consider when investing in a mining rig or an ASIC miner is the hash power for mining a certain cryptocurrency.
Bitcoin and Ethereum Hash Power
Hash power or hash rate is the measure of how quickly and efficiently your mining rig can mine BTC or ETH. Modern mining rigs are specialized computers that are equipped with several GPUs that are interconnected to the motherboard and processor, and are programmed to mine a certain crypto. In the early days of Bitcoin mining, CPUs were also used for mining but they have long since been replaced by graphics cards which have a much higher processing power.
The hash power of a mining rig is measured in megahashes, gigahashes, and terahashes per second (Mh/s, Gh/s, Th/s). When you are planning on buying or putting together a mining rig, one of the most important things you need to take into account is the hash power of the GPU or GPUs you want to use to mine cryptos.
Different GPUs have very different hash power points, and their price range can vary from a couple of hundred to several thousands of USD for the most expensive, state-of-the-art GPUs. Nvidia and AMD are the two main manufacturers of GPUs whose products you’d want to use. It is highly advised to check which model of GPU is best suited for ETH or BTC mining.
The main factor that determines what GPU you will be using and how many will you put together into a rig is the budget you are prepared to invest in a rig. When you know your budget, you can decide on the highest hash rate you can afford. It is a good idea to check websites such as Hashrates.com and Whattomine.com where you can see detailed hash power listings for numerous GPUs available on the market.
When you decide which GPUs to buy for your rig, you can easily calculate the hashing power of your rig by adding up the individual hashing power of each GPU in your rig. However, this sum isn’t your total profitability sum. For that, you must also take into account several other factors.
Hash Rate and Profitability
The hash rate of your mining rig shows you how much BTC or ETH (or any other crypto) you will be able to generate in a certain period of time, but you can’t consider this amount of cryptos as profit.
When putting together a mining rig, you need to take into account the money you will be investing in the machine. Mining rigs can be quite an expensive investment since they are not ordinary computers that can be bought for a modest sum. The most expensive parts of a rig are the heavy lifters – the GPUs – and if you want to have serious hashing power, you need to buy several GPUs that have a high mining rate for the crypto you want.
This initial investment is the first thing you need to take into consideration when calculating the profitability of your mining rig; then comes the mining pool fee. Your best chance of mining ETH or BTC is if you join an online mining pool that distributes block rewards among the users of the pool. Every pool has a participation fee.
Now, you also have to consider the power consumption of your mining rig, which is calculated by adding together the individual power consumption rates of each GPU in the rig, along with the power the computer consumes with its processor. When you know the amount of power consumed by your rig, you have to calculate the price of electricity.
Once you learn all these figures, you can go to a site such as Cryptocompare.com or Nicehash.com to calculate the profitability rate of your mining rig and know exactly how much money you can earn if you start mining with your hardware setup.
A Few Words Before You Go…
Once you have decided on the exact hardware you want to use for mining cryptos, and then take into account the invested money and cost of power usage, it is quite simple to calculate your hash rate and profitability. Just bear in mind that mining is a long-term process that can take some time before it becomes profitable.