Mining is falling. Mining profitability fell amid falling Bitcoin prices

Along with the collapse in Bitcoin prices, the profitability of mining is also falling, notes Bloomberg columnist Tim Kulpan. If no one stops mining, they risk suffering serious losses and finding themselves working in vain.

Bitcoin's 70% drop earlier this week from December highs has pushed yields to near zero. On Tuesday, the price of Bitcoin dropped to $6,000. Under these conditions, only the largest and most efficient farms make any profit, but even they are teetering on the brink.

There is a high probability that miners who are not included in the four largest pools purchasing equipment at wholesale prices(67% of all computing power networks), are already losing money. The arms race among participants has led to the fact that since December 18, when the price of Bitcoin exceeded $19,000, computing power has jumped by 40%. Data from Blockchain.info shows that block confirmation difficulty has increased by 51% since then.

Miners put up with the incredible increase in difficulty (it soared 18-fold in two years) because the 21-fold increase in the value of Bitcoin over the same period offset the costs and justified the investment.

If Bitcoin were to remain at the 50-day moving average at $13,200, the average miner could expect to make $80 in profit per week at current computing power and difficulty. This estimate is based on a bold assumption that it uses the Antminer S9 from Bitmain Technologies with a claimed speed of 13.5 TH/s ( retail price is $2,320) - one of the most advanced systems available on the market - and purchases electricity from China at wholesale prices. The profitability of older equipment will be lower, although many of those systems still work.

If prices do not rise, the average miner will lose $3 per week at current levels. Mining syndicates such as Antpool - which buy equipment at wholesale prices - will still make money, but their profits will fall by 90% from the 50-day moving average.

The only way to increase profitability is to wait until prices rise or some miners leave the market and competition falls. History shows that the latter is possible, but unlikely. In fact, those who have invested millions of dollars in Bitcoin farms are holding on to their businesses in the hope that competitors will bail out first.

If this happens, then only the most persistent players will remain in the market and will enjoy legitimate spoils. IN otherwise A sad fate awaits them all.

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What is mining?

What are the miner's Internet access requirements?

Traffic in mining depends on the number of devices, their performance, as well as the minimum complexity of decisions that the pool makes. For one correctly configured device, the traffic is no more than 10 Kb/s, that is, a Dial-Up connection is enough, the main thing is its stability.

Miners who do not have a stable wired connection often use 3G modems with the cheapest unlimited tariff. If you have several dozen, or even hundreds of devices, you will need a thicker channel.

How much do miners earn?

The Bitcoin system is decentralized, it contains the principles of changing the complexity of generating coins, depending on the total power of the system. The difficulty changes every 2016 blocks so that on average six blocks are solved per hour. Thus, the difficulty changes approximately every 14 days. But if the network power increases, then the complexity changes earlier (increases), and if the network power decreases, then the complexity changes later (decreases).

You can calculate your earnings at. You just need to enter your speed in Mhash/s and click "Calculate". If you don’t know your speed, you can calculate it by the name and number of devices in this table.

The Bitcoin exchange rate does not depend on the difficulty; the complexity indirectly depends on the exchange rate. Buyers of BTC don't care how difficult it was to generate those BTC.

You can get acquainted with the current course by following the link, where:
Latest Price - last completed transaction
Bid - demand
Ask - offer
You can also monitor the exchange rate in real time on other sites; the most complete list of them can be found in the article.

How to manage a farm remotely?

IN operating systems Windows family You cannot use Remote Desktop (RDP) to manage farms, because it works with its virtual video card. Once you stop mining, you will not start it again, because... video cards will not be detected correctly. Use third party tools such as TeamViewer, *VNC and others. Under Linux (Ubuntu, XUbuntu, Debian), lightGDM does not allow you to get video card resources in a remote console. Everything works fine with GDM. Tested with cgminer, diablo.

How to start mining in solo mode?

Bitcoin mining in solo mode is now almost impossible if you do not have your own data center with several thousand modern ASIC miners. However, for some, solo mining is still effective.

Let's describe the process using Bitcoin as an example:

First, follow the path “%appdata%\Bitcoin” (for example, in Windows 7: “C:\Users\username\AppData\Roaming\Bitcoin”). Create a text file. We enter three lines into it:
server=1
rpcuser=user
rpcpassword=pass
(without quotes, make up user and pass yourself). Then we rename the file to “bitcoin.conf”

Setting up cgminer:

1. Go to the folder with cgminer

2. Create a txt file and enter into it:

Mining in pools

What is a pool?

Currently, anyone who finds a block receives 25 BTC. It is very difficult to do this alone unless you have very large computing power. To solve this problem, there are pools; there can be many of them on the network. A pool brings miners together to jointly search for and solve blocks. More detailed information about joint generation pools, their operating modes and examples of setting up miners can be found in the article.

What happens if two miners enter the pool under one worker?

It all depends on the pool. Most pools allow multiple connections under one worker. The pool simply takes into account all decisions from multiple devices in the same way as for one.

Don't forget that the worker on the pool is tied to a specific account, and its owner receives all the income. It doesn’t matter where the devices themselves are located or who they belong to.

I mine in a pool and find a block. Can I not give it to the pool and take all the BTC for myself?

No, it won't work. Each miner in the pool searches for a block according to the server’s tasks; from a technical point of view, this is equivalent to the fact that all devices sending solutions belong to the pool. When any of the miners connected to the pool finds a block, the reward transaction comes to the pool wallet. And only after that software, which keeps track of the work of miners, distributes the reward among them. But if the owner of the pool is a scammer, he can appropriate all the bitcoins found for himself, and there is nothing you can do about it.

The owners of most large Bitcoin pools are known, but small fork pools are often anonymous. Therefore, when choosing a pool, be careful and withdraw what you get to your wallet as often as possible.

How can a miner check the integrity of the pool, that it gives all transactions in the task and does not ignore unwanted ones?

At the time of generation, the miner cannot check what is included in the block and what is not, because Only the task for generating the block header is received for generation. A miner can only learn about bad behavior of the pool after the fact, after receiving a completed block.

What is pool hopping?

Pool hopping is a deliberate move from pool to pool in order to catch a period of luck (“short” blocks) and thus earn more coins than would have been the case permanent job on one bullet.

In essence, this is cheating, which pools fight by introducing a delay in the output of statistics, introducing rating systems and other methods. As a rule, on pools with a PPLNS accrual system, such jumps are not justified, since even a short absence of a miner from the pool reduces his income for a long period of time (4-12 hours).

Questions about ASIC miners (SHA256 and Scrypt)

What is an ASIC miner?

ASIC (abbreviation for Application Specific Integrated Circuit) is a chip specialized for solving a specific task. Unlike integrated circuits general purpose, specialized chips are used in specific device and perform strictly limited functions, characteristic only for of this device. An example of an ASIC is a chip designed solely to control mobile phone, hardware encoding/decoding chips for audio and video signals (signal processors).

ASICs are used for mining because, due to a strictly defined structure, the production process of microcircuits is greatly reduced, and also, due to the narrow specialization of chips, the productivity and energy efficiency of mining increases.

What is the difference between Scrypt ASIC and SHA256 ASIC?

The Scrypt hashing algorithm was designed specifically to counteract faster devices - first video cards, then FPGAs and ASICs. Therefore, it is “more complex” than SHA256 ( more number, more calculation rounds) and its calculation requires significantly more random access memory. This makes the production of such ASICs more expensive.

What is Dual miner?

This is a miner that can perform calculations simultaneously using two hashing algorithms - Scrypt and SHA256. The developers placed on one chip computing cores to calculate both algorithms, however, each type of kernel can only be calculated using its “own” algorithm. This makes such a device universal, but greatly increases the cost of production and heat dissipation, which does not have the best effect on the return on investment. Currently, only one company produces ASICs of this type - formerly Gridseed, and now SFARDS.

What types of ASIC miners are there?

Mining devices are produced in several form factors, based on different categories of buyers - compact, home and professional.

Compact miners are usually inserted into a USB connector and powered through it. Compared to their “big brothers,” they are the smallest and weakest. This is what the first generation chips look like from ASICminer - one of the first ASIC manufacturers for mining - called USB Block Erupter.

Its characteristics: 300 MHz/s, 1.05 V, 335 MHz, 6x6 mm. and 4.2 W at 1 GHz/s.

Later, compact miners were produced on chips from Bitfury and Coincraft, and even the Antminer U* series, but were not in demand, since they brought purely nominal income and eventually turned into souvenirs.

Home and professional miners essentially differ only in size, case type and power consumption; all other characteristics are identical.

Home devices usually have cheaper cases and weaker fans, they are smaller and lighter, and an average power supply with a power of 600-700 W is enough to power them. Typical representatives of this class are Antminer S1/S3/S5.

“Professional” miners are designed for placement in data centers and are usually mounted in 19” server racks. They have built-in power supplies (sometimes several) with a capacity of more than a kilowatt, a sophisticated cooling system and powerful server fans, very noisy but effective. Typical representatives are Antminer S2/S4, Terraminer from Cointerra, Coincraft Rig from Bitmine.

ASIC miners are compared based on the following characteristics:

1) Technological process chip

2) Performance in Gh/s (gigahashes per second) or Tx/s (terahashes per second), where 1 Tx/s = 1000 Gh/s)

3) Energy consumption per 1 Gh/s - for example, 1 W/Gh/s

4) Cost of 1 Gh/s - for example, 0.5$ per Gh/s

5) Average operating temperature of the chip - °C (depending on the technical process, on average 40-60 °C)

Who produces ASICs for mining?

Several companies now produce (or have produced) their own ASIC chips and finished devices based on them:

• Bitmaintech
• Bitfury
• Avalon
• Innosilicon(Scrypt)
• SFARDS(Dual miner) - no longer produced
• Spondoolies-Tech- no longer produced
• KnCminer- no longer produced
• ASICminer- no longer produced
• Zeus(Scrypt) - no longer produced

Which miners are the most reliable and popular now?

Miners from Bitmaintech are rightfully considered the most deserved for Bitcoin mining, since the company has never seriously let down its customers. Bitfury is also reliable, but does not sell retail.

The reward is distributed in the same way as in the pool with PPLNS, but with some difference - the reward does not stay on the pool for some time, but goes straight to your wallet. P2pool works on the principle of “being your own master”.

By the way, it is p2pool that provides real decentralization - the most important reason for the success of Bitcoin.

What software is used in ASIC miners?

As you know, each manufacturer has its own firmware for a miner, but almost all of them include CGMiner or BFGminer due to the flexibility of settings and support for all methods of connecting to the pool.

The firmware of most modern ASIC miners is based on Linux and has a convenient web interface that allows you to manage network settings, connections to pools, adjust frequency and voltage, view detailed statistics of the miner’s operation, monitor faults, update firmware and much more.

Bitmain Antminer S5 interface:

There are numerous custom firmware versions, each with its own features, such as support for extranose.subscribe or big amount settings.

How to overclock ASIC miners?

Most miners have the ability to overclock, the potential of which depends on the manufacturer and chip technology. Antminers from factory frequencies are usually overclocked by 10-30%, while chips from KnC can sometimes be overclocked by almost half. But be extremely careful when overclocking miners; increasing the frequency will sharply increase power consumption. Chips or power circuits may not withstand overclocking, and as a result, you may lose both the miner itself and other equipment.

On some ASIC miners, the operating frequency is deliberately lowered to increase stability (for example, Bitmain Antminer S2 and S4). As a result of overclocking, you can get a significantly more productive, but less stable miner.

Which power supply should I use for ASIC miners?

IN modern devices For mining, 6-pin power connectors have become an unspoken standard, similar to the connectors for connecting additional power on a PCI-E video card. They were chosen for their small size and maximum compatibility with mass-produced power supplies.

Miners (people) have different opinions when choosing the ideal power supply. Some prefer used server power supplies because of stability, good efficiency indicators and low price, others prefer blocks ATX power supply for home PCs due to the fact that depreciation (gradual reduction in cost and wear) almost does not affect them. When choosing a power supply for a miner, you need to look not at the total power of the power supply, but specifically at the +12V channel. Here the choice is up to you.

To start an ATX power supply without a motherboard, you need to close 2 contacts as shown in the image:

GPU mining and archive

What video cards are suitable for mining?

The older models of Radeon HD video cards of the 5xxx, 7xxx and R9 xxx series perform best in mining.

Old NVIDIA video cards, due to the characteristics of the architecture, show a low level of performance in this type of computing. But starting with the GTX 7xx series on Maxwell architecture, with the latest drivers Nvidia cards They are not inferior to Radeons and even often surpass them in energy efficiency.

For GPU mining, Nvidia CUDA must be installed on the computer, either with a driver or separately.

What cryptocurrencies can be mined on video cards?

Since Bitcoin, Litecoin and their direct forks using the same hashing algorithms (SHA256 and Scrypt) are already mined on specialized devices (ASIC), only those cryptocurrencies are left for video cards where ASIC development is still impossible or unprofitable.

It is still possible to mine altcoins on the GPU with the following algorithms:

X11, X13, X15, Scrypt-N, Scrypt-jane, SHA-3 (Keccak), Quark and all the others for which there is already software for mining on GPUs.

How many video cards can I use on one computer?

The driver limitation is a maximum of 8 cores, that is, 8 video cards or 4 dual-processor video cards. It is worth noting that the more cores are used, the more unstable the system behaves. Running and managing 6 video cards on 1 computer can be quite problematic, and it won’t work on every motherboard, OS and driver version. The requirements for power supplies are also increasing; most often, risers are required, preferably with additional power, in order to reduce consumption from PCI-E bus motherboard. Also, as the number of GPUs increases, it is necessary to install more RAM.

What to do if one or more of the installed video cards is not displayed in the miner?

There are many options. why this might happen. You can remove the video card from the devices and let it be found again. If it doesn’t help, then check if there are any remnants of deleted or rearranged cards in the system that are causing problems.
There are cases when the video card goes into “hidden devices”, then before removing it you need to configure their display as follows: right-click on the “My Computer” icon, select “Properties” (or Win+Break). In the system properties, go to the "Advanced" tab (for Vista, 7, 2008, etc. in the computer properties, first click "Advanced system settings") and at the very bottom click the "Environment Variables" button. In system variables, create the variable DEVMGR_SHOW_NONPRESENT_DEVICES and assign it the value 1. Then open the device manager, in the "View" menu turn on display hidden devices and remove hidden video cards.

After updating the driver, the speed dropped, what should I do?

Starting with driver version 11.12, the problem of 100% CPU core utilization has been fixed, but the mining speed has dropped slightly compared to version 11.11 and previous ones. To restore the previous speed, unzip the contents of the archive to disk in Windows folder with replacement. If the system informs you that the file is occupied by a process, then close the miner program. There are two folders in the archive, for each OS bit level.

Performance is significantly lower on one of the video cards

This problem may occur on the “first” video card, which outputs images to the active monitor, but the monitor is not connected to it.

In this case, you need to connect a monitor or a “stub” to this card. First, insert the DVI>VGA adapter, then insert 75 Ohm resistors as in the diagram:

This problem occurs quite rarely on a variety of systems and its origin may be associated, for example, with outdated drivers, BIOS, or simply an unsuccessful hardware combination. If you are unlucky, use the method described above.

The Guiminer window is not displayed, only the tray icon. How to fix?

This glitch is due to the fact that the miner window is displayed outside the visible boundaries of the screen. There are two ways to overcome it:

1. Select the Guiminer tab in the taskbar to make it active. Press the Win + Left Arrow key combination. The miner window will appear at the left edge of the screen.

2. Close Guiminer. Open the configuration file poclbm.ini, it is located in %appdata%\poclbm (for example, for Win7 it is C:\Users\user\AppData\Roaming\poclbm) and correct the values ​​in the "window_position" block to the following:

"window_position": [
546,
353,
579,
318
]

After this, run Guiminer again, the problem should go away

Radeon HD 7*** is not detected in miners on Windows XP, what should I do?

Radeon HD 7*** is not displayed in miners because... Windows XP does not support OpenCL for series 7*** and higher. This limitation in AMD drivers, applies to everything Windows versions XP. We can recommend using more modern operating systems, for example, Windows 7 or 8.

What to do if the video card is not visible through the 1x riser?

Different motherboards and video cards react differently if, instead of PCI-E 16x, communication goes via PCI-E 1x. For mining, PCI-E 1x bandwidth is enough, and the PCI-E standard itself supports such a trick, but the signal about connecting a video card can go through unused contacts, and the video card will not be able to work correctly. In this case, the easiest way is to short-circuit the hotplug signal on the connector with a wire; to do this, you need to make a modification by connecting the contacts in the connector in this way:

Blue screen of death and error 0x000000ea ati2dvag, what to do?

You need to remove the drivers and install them again. The nuance is that after deletion, 2 ATI libraries remain in the Windows/system32 folder, which are not automatically deleted even special utilities like Driver Cleaner. They must be removed manually, and then new drivers must be installed.

There are problems with reducing the memory frequency on the video card in AfterBurner, what should I do?

If downclocking the RAM does not work, try configuration file register

UnofficialOverclockingMode = 2

If this does not help, then you can try the following technique:
We go to the Profiles folder, it is located in the location MSI installations AB, go to each of the video card profiles, look for the Defaults section in each profile, do this:

Format=2
PowerLimit=0
CoreClk=750000
MemClk=600000
FanMode=1
FanSpeed=25

Then we put it there:

Format=2
PowerLimit=10
CoreClk=820000
MemClk=300000
FanMode=1
FanSpeed=44

Voila, if there are 4 or more identical cards in the system, just launch AB, set in the settings “synchronize settings of identical GPUs”, the default memory frequency for all will be maximum (default), and not the one specified in the profile, but press the hot button profile and everyone is set to 300mhz.

Today it is difficult to find a person who does not know what mining is and how profitable it is. This is partly true. But, as you know, no type of income, especially a “super-profitable” one, can generate income indefinitely. And a logical question arises: when will mining end?

With the growing popularity of cryptocurrencies, the popularity of a new method of earning money has also grown - the so-called “mining”. There are legends that it brought fabulous profits to many enthusiasts who stood at the origins of this new industry. And today it is difficult to find a person who has not heard about mining. However, today the prospects for mining as a means of earning money are not nearly as bright as, for example, a year ago. And there are reasons for this. Let's try to imagine the prospects for this type of business.

What is mining and why is it needed?

To understand the future of mining, you need to understand its essence. The first question that arises when assessing the profitability of mining is what do they pay for? Many people think that “mining” cryptocurrency is akin to mining gold, silver or platinum. But that's not true. There is a code that allows you to receive cryptocurrency for some activity (to be precise - mathematical calculations). And if the code allows you to get a new token, then it’s built into the code.

At its technical essence, mining is the process of maintaining the functionality of the blockchain of a particular cryptocurrency. As you know, a distributed network needs a certain number of “links” to ensure its operation. For activities to ensure the operability of the network, the owners of “links”, or as they are also called “nodes”, receive a reward. Essentially, they select a key for a block that stores information about a transaction in a particular cryptocurrency. The presence of such blocks ensures that information is stored and transactions are authenticated.
Thus, mining is necessary for the existence of almost any blockchain.

Mining and market

As with any paid activity, the cost of mining depends on the demand for it and its supply. And here the usual market mechanisms, described back in the 18th and 19th centuries, operate. The fact is that if there are too many miners, more than are needed for the network to operate, blocks and, accordingly, new “coins” are formed too quickly. Firstly, it leads to inflation. Secondly, there is nothing to store in the new blocks - there is not enough information about transactions on the network for everyone.

To regulate this process, a tool called “network complexity” was created. It lies in the fact that when the total computing power of all miners is too large, when blocks are mined too often, the complexity of the network is recalculated and it becomes more difficult to mine new blocks. As a result, the emergence of a new block and, accordingly, the payment of remuneration for its formation occurs with the frequency inherent in the concept of the network. For example, in Bitcoin it is 10 minutes.
In addition, as the number of mined blocks increases, the reward for each newly mined block decreases. Thus, two processes take place:

• It becomes more difficult to mine blocks - each individual miner or farm receives rewards less and less often;
• The reward becomes smaller - with each new block mined, the miner receives less money.

As a result, mining profitability decreases. Needs to be emphasized. That a couple of years ago, when the complexity of networks was low, mining brought significant income. But today it is too late to start individual mining, since the complexity of all more or less known cryptocurrency networks is very high.

Mining industry

With the growing popularity of mining, a whole industry has emerged for this type of activity. And if earlier video card manufacturers only slightly upgraded the chips to make them more suitable for mining, then in the last few years ready-made devices designed exclusively for cryptocurrency mining have been sold.

And again, demand creates supply. When the income from mining on “old hardware” falls, manufacturers offer a new device that allows for much more calculations per second. BUT. If cryptocurrency rates do not grow, profitability will still fall, as the network has again become more complex. And economically, mining turns out to be unprofitable.

More about farms

In addition to the fact that cryptocurrency mining brings in less and less money on one specific device, its cost is increasing, i.e. costs associated with production. Let's not forget that just purchasing a device is not enough. Equipment needs to be serviced. This includes energy supply and ventilation, and cleaning of the same coolers.

When it comes to mining attempts on one home PC, such problems are almost invisible. But the income from such activities today is also close to zero. To overcome the problem of increasing complexity, mining equipment is combined into so-called farms or pools. Due to the operation of appropriate protocols and parallel computing the effect from the operation of the farm is much higher than from the separate operation of all the devices included in it. But maintenance also becomes much more difficult. It is necessary to select a room (the noise from many devices is quite noticeable) and provide power.

Today there are farms that consume 40, 60 and even 80 MW. This amount of energy requires corresponding costs. It is necessary to ensure ventilation of the entire room, and this also costs and maintains the ventilation system itself. As a result, all these costs (costs) reduce the profitability of the farm.

When creating pools, devices located in different geographical locations are combined. They can be computers belonging to different owners. At the same time, when united in a pool, they are able to perform sufficiently complex calculations to compete in the market.

Recently, the offer to rent equipment from an existing pool has become popular (). Anyone can deposit a small amount into the account and participate in the distribution of income. No problems with purchasing equipment and its maintenance, maintenance, etc. The question arises as to why pool owners need this. Precisely in order to reduce your risks associated with the complication of the network and a drop in profits. Unfortunately, the amounts paid to the “investors” allow the investment to be repaid only after many months - longer than it would previously have taken to pay off the farm.

Is it worth starting

Despite the fact that calculations show a decline in the profitability of mining, there is now a lot of noise around it and many people are trying to start doing it. However, isn't it too late? As calculations show, even the most powerful miners (the so-called ASIC miners) available in public stores and message boards will pay for themselves no sooner than in a year or two, even at the current level of network complexity. And we are not talking about Bitcoin or Ethereum.

For example, the same Dash. It is enough to look at the complexity of the network, as well as the power and cost of modern ASICs, to understand that mining is unprofitable. After all, with the entry of powerful equipment into the market and its widespread use, the complexity of the network naturally increases. As a result, equipment owners are forced to “jump” from one cryptocurrency to another, changing protocols, programs, and reflashing equipment in order to make at least some profit. But there is no longer enough market for everyone. , if you do not have access to the latest ASICs at manufacturer prices.

Forecast

Does all this mean the end of mining? If we talk about mining as a means of earning money for anyone, then apparently yes. It’s too late to invest in mining now. The market has received enough links and pools to ensure the functionality of any blockchain. However, this does not mean that the mining industry will collapse. Today the reverse process is also observed. Entire pools are switched off from networks. This may be due to the fact that mining has become unprofitable with existing equipment. As a result, the complexity of the network drops slightly and this gives hope for at least some profit. But, alas, you can’t count on astronomical figures.

In cryptocurrency mining, as in any other major undertaking, the profits were made by those who “were at the origins.” Many of them did not even count on such income, but rather went into business out of enthusiasm. Who could have known 3 years ago that Bitcoin would rise in price by 70 – 700 – 1000 times. But rate growth is one of the main components of profit when working with cryptocurrency. Now, when there are too many people who want to “earn money”, there is not enough profit for everyone. This is the law of the market.

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