Decisions, decisions. Now that you’ve decided to get into cryptocurrency mining and chosen your preference of currency, the next step would be to pick a good enough GPU to help you accelerate your computer’s performance and solve each hash as fast as you can. If you haven’t yet done that, go to Top 5 GPUs for Cryptocurrency Mining in 2018 to choose the best GPU per your convenience. Now what follows is another important decision that will wrack your brains and make you bang your head on the box of your new GPU. Not too hard.
There are two traditional ways of mining cryptocurrency. But before that, let us go back to the idea of mining. We know that the basic concept of mining encompasses solving a complex mathematical puzzle which is nothing but a part of the blockchain and getting the answer in the next block. In theory, it is simple enough – Find a number and combine it with the data in the block to pass through a hash function which will lead to a resulting hash within a certain range. This number is called the “nonce.” The complexity comes up in choosing this nonce. For example, in the mining of bitcoin, this has to be a 2^32 number for every hash that is to be computed.
The solitary rangers in us would like to do this task alone. The ones who have the ability and backing to compute such complex hashes in limited time. With the advent of better and faster processing units, it has become extremely difficult to mine cryptocurrency with it leading to a good enough return on investment for a single user. On average a good enough GPU costs around $2500-$3000, and even that comes up with an additional cost of electricity and cooling power required. Even this does not guarantee a single user’s chances of getting the proverbial lottery in the crypto world. Talking about lotteries, it is said that it is a hundred times more likely that you would win a lottery in your state than get your hands on a Bitcoin BTC working alone.
So then, what can I do?
This is what mining pools are for. Mining pools have come into existence so that multiple devices can join forces and pool their resources in the search for the proverbial gold, i.e., the respective cryptocurrency here. These devices work with each other via the internet to generate the solution to these complex puzzles, and once they crack it, the ‘rewards’ are then split between all the participants according to their contributions. Here, the contributions vary from their respective processing prowess to the uptime of each resource.
The contributions mainly consist of how much processing power a user provides to the pool and here is where our selected GPU comes into play. On an average, the most powerful GPUs would give out a hash rate of 30 MH/s. This is nowhere near the required TH/s hash rate to mine popular cryptos like Bitcoin BTC and Ethereum ETH. But, when the same GPU is used in parallel with other similar processors, you get an increase in hash rate and also a higher probability of getting the answer faster.
Okay, I agree with your Pool argument. Tell me about profits.
What comes next is selecting a pool that would guarantee you maximum profits. Now, this is a debatable topic in itself.
Experts say that when you invest in smaller pools that pay out irregularly but in a good amount because you could have the most contribution to this and hence the most number of shares. On the other hand, you could go for the traditional large pools that pay out small amounts regularly. Overall, they could both lead to the same amount of profit over time.
The other part is to focus on which type of pool do you want to invest in. Here are some examples:
Single coin mining pools: They are usually used to mine a particular type of coin. People generally prefer single mining pools to avoid exchange rates on different currencies. For higher hashrate GPUs like the NVidia 1070 or 1080ti, this could be a preferred option.
IPOMining: These pools are preferred for lower level cryptos mostly known as “pump and dump” coins or coins that have not peaked yet and are just about to peak. These coins can then be used to maximize your profits by exchanging them for the more established currency like Bitcoin BTC or Ethereum ETH.
Multi-pools: A multi-pool is a mining platform that allows you to selectively mine cryptocurrencies based on highest profitability in real time. This is better explained here.
There are different payout types to look at for choosing the best fit for you. Some of them are:
- Pay-per-Share (PPS): This allows instant payout corresponding to the shares that are contributed by the user toward the mining. The user is allowed to directly extract their earnings from the pool’s earnings. This could be a great way of maximizing your profits if you have a good enough GPU set.
- Proportional: The reward is divided among all the users proportional to how much of a share each user has found.
- Pay-per-Last-N-Shares (PPLNS): It works similar to the proportional payment method but looks at the last N shares, irrespective of the boundaries of the round.
- TripleMining: This brings together medium sized pools with no fees and redistributes a small percentage of every block found. This allows a user’s shares to grow faster than in any other pool approach. This is based on the Jackpot method which provides users with an equal opportunity to make additional coins regardless of their computing power.
The next thing to look out for is also the ease of familiarity associated with the various mining pools. This contributes to your profits in terms of switching to the most suitable cryptos that you can mine with your GPU configuration. This is done by the mining Pool’s own software and GUI.
A user or newbie should keep all these factors in mind since they will eventually lead to the user being a victor in profit or victim of loss. MinerGate is one of the better software in this market with a GUI and console that lets you choose what coins to mine and how much you can mine depending on your computational power. It is a PPS and PPNS based multi-pool Cryptocurrency GUI Miner with a vibrant and energetic team working to provide the Tool’s users with the best possible experience of cryptocurrency mining.