How to start mining with an ASIC and what ASIC to buy?
Since Ethereum switched from Proof-of-Work to Proof-of-Stake, GPU mining profitability has decreased by around 90%, which makes a lot of GPU miners not profitable. But that does not have to be the end of mining for the GPU miners.
In this article, I will explain how to start mining with ASICs, where to buy one and where to mine.
What is an ASIC?
ASIC is short for Application Specific Integrated Circuit. In layman terms, ASIC is a chip that is designed to do just one task whereas CPU for example, can do multiple different tasks and is more versatile. In mining, ASIC is designed to guess or loop through the nonce number as fast as possible in order to find the correct solution and validate a block of transactions. You can read more about mining here.
Note that ASIC can also do other types of work not related to crypto mining, but these are different chips only created (optimized) for that specific task.
Is mining with an ASIC harder than mining with GPUs?
No, mining with an ASIC is actually easier from the maintenance, troubleshooting and setup perspective.
Because the ASICs are programmed to do just one job, the setup is quite straightforward. It does not need much manual intervention like changing the BIOS settings, installing the software, increasing virtual memory, overclocking and other things that the GPU miner is required to do before mining.
When it comes to setting up the ASIC, after powering it up and connecting the internet, you simply need to connect to it via browser (similarly as connecting to the router), inputting your mining pool address and wallet/mining address. After that, the ASIC will start mining automatically and no further manual intervention will be needed.
You can see how easy it is in one of our guides for connecting Bitmain ASIC.
The biggest dilemma you will probably face is what ASIC to buy, where to buy it and should you mine at home or host the ASIC at the hosting company.
What ASIC to buy for mining?
If you are coming from a GPU mining world, then you know that GPUs support multiple algorithms and generally you can't miss that much if you go to a store and buy a random last-gen GPU. If one of the GPU mineable algorithms disappeared (thank you Ethereum /s) there are still other algorithms that can be mined or the GPU can be used for gaming.
But if you buy an ASIC that supports a coin which stops being mined, then you got yourself a big paperweight.
Check the below tips for helping you make a better decision when buying an ASIC for mining.
#Tip 1 - Buy an ASIC that supports multiple coins on the same algorithm
An ASIC can only mine one algorithm because it is programmed to do just that task and nothing else. That is an important thing to keep in mind when buying an ASIC. It means that it is better (safer) to buy an ASIC that can mine an algorithm with multiple coins. An example of an algorithm that mines multiple coins is a Scrypt. ASICs that are programmed to mine the Scrypt algorithm can mine at least 6 different coins. Including Litecoin and Dogecoin which are the two similarly profitable coins.
#Tip 2 - Buy an ASIC that is not outperforming other same-algorithm ASICs by 5 or 10 times
Another important factor to keep in mind is the total network hashrate of the algorithm. For example Bitcoin (SHA256 algorithm) has a lot of network hashrate as there are millions of miners already mining it and ASICs are well optimized for SHA256. This means that an ASIC manufacturer most likely will not come up with an ASIC that performs 10 times better that the current best performing ASIC.
If the ASIC manufacturer can create an ASIC with extremely high hashrate compared to the other miners, the mining difficulty of the coin will increase as soon as these ASICs start mining and profitability will drop dramatically.
Something similar happened many times in the past, where mining calculators showed an XYZ ASIC as the most profitable. Buyers bought the ASIC with an expectation that the miner will produce that much daily profit once they get it. But in reality, there were many other miners connecting this ASIC to the network and the difficulty increased, thus the daily profits decreased. Similarly can happen with the upcoming Antminer KA3 ASIC for Kadena algorithm.
#Tip 3 - Buy an ASIC that mines SHA256 or Scrypt algorithm
The safest bet is to buy an ASIC that mines Bitcoin or Litecoin/Dogecoin. ASICs on these algorithms are already well optimized and we do not expect a new model that will perform at 10 times the speed as the latest models. Even if it does, the network hashrate of these coins is already very high and it will need a huge amount of hashrate to impact the difficulty to dramatically decrease the profitability.
These coins (Bitcoin, Dogecoin, Litecoin) also have a lot of users and can be treated as “stable” compared to other mineable cryptocurrencies like Monacoin (lyra2rev2).
To be clear, I am not saying that you should focus just on the SHA256 and Scrypt ASICs, I am saying that buying these ASICs can be a bit more safe than buying an ASIC that mines some less known algorithm that was just launched or has less interest from the public. Buying an ASIC for mining some other less-known algorithms or projects could be a good decision if, for example, the price of that coin skyrockets.
So, what ASIC should I buy?
I would recommend checking the NiceHash Mining Hardware page and switching to the ASIC tab. Here you will find all of the NiceHash supported ASICs.
A good choice is (not limited to):
- Antminer S series for SHA256 (Bitcoin) - S19 is the latest model
- Antminer L series for Scrypt (Dogecoin, Litecoin) - L7 is the latest model
- WhatsMiner M series for SHA256 (Bitcoin) - M50 is the latest model
Where to buy an ASIC?
The general rule is to always buy directly from the manufacturer. But since many manufacturers do not sell directly to consumers or are oftentimes out of stock. In these cases, your only alternative is to buy from a reseller.
Always be careful when sending crypto to resellers, as there are many fake websites and scams on the internet. That is why we have prepared a partner webpage with all of the NiceHash verified resellers. You can check the list here. Select the hardware partner you find most suitable for you.
Where to host it? At home or at a hosting company?
Since ASICs tend to be very loud. The noise level is somewhere between 50 to 80 dB which is a lot more than an average GPU mining rig. This is one of the biggest issues regarding owning an ASIC in a residential area. The ASICs also use quite a lot of power, the average ASIC uses around 2500 W - 3000 W of power, which can be an issue for some people. Check with your local electrician if you can connect an ASIC at your home.
If you have a basement or a shed, then these places are great to use an ASIC at. The ASIC will also heat up the place in the winter. Remember, using a 3000 W ASIC equals to running a 3000 W heater. If you are worried about the noise, check this video by The Hobbyist Miner and how he solved noise problems at his home.
If you do not have a place to mine with an ASIC or you want to use more ASICs and have nowhere to put them, then the only solution besides renting a place yourself is to host the ASICs at the hosting facilities.
Hosting facilities are the best places for your hardware as they are well cooled, and secured and normally allow you to control your ASIC remotely. Hosting an ASIC at the hosting facility is a great way to solve the heating, noise and electrical problems at your home.
Check out our partners page for trusted and verified hosting providers.
Where to mine with an ASIC?
I honestly recommend NiceHash. NiceHash is superior to mining to a pool for numerous reasons. You can read what are the benefits of mining at NiceHash here.
The most important reason why mine at NiceHash is that NiceHash pays better than mining directly. This was achieved with our latest product called Catch the Block.
You can read how to connect your ASIC to NiceHash here.
Disclaimer: This is not financial advice.
If you have any questions about mining with ASICs, feel free to join our Discord server or Reddit page and chat with other ASIC miners!