What is a mining farm – the principle of operation, the necessary equipment, calculation of profitability and risks

The content of the article

• What is a mining farm
• How does it work
• Payback
• Types of mining farms for cryptocurrency mining
• Bitcoin Farm
• Ether mining
• Cryptocurrency farm for mining altcoins
• Buy a mining farm
• Equipment power
• Blockchain network complexity
• What determines the hash of a mining farm
• How to build a mining farm
• Mining farm frame
• Video card selection
• Power supply for installation
• Cooling and air circulation systems
• Miningfarm assembly
• Cryptocurrency mining launch
• Is it profitable to mine cryptocurrency with the help of farms
• Equipment and maintenance costs
• Profitability of leading cryptocurrencies
• Farm Profitability

In a situation where the word “bitcoin” continually flashes on the pages of online publications and is increasingly heard from the TV screen, even small children know what it means. This is a cryptocurrency, for which you need a mining farm – an open frame on which computer hardware is installed. Very often, the main detail of such a miner is a block of several video cards, with the help of which mining is performed.

What is a mining farm

Structurally, a mining farm is a computer designed to solve certain computing problems. A powerful processor and a capacious hard drive are not required here, the emphasis is on a large number of powerful video cards (there can be up to 6 pieces) and several power supplies that provide the system with the necessary energy. The good computing power of the home farm allows you to set up cryptocurrency mining, and in essence is an alternative (or even the main) type of income with a quick payback period.

How does it work

From a software point of view, a mining farm is nothing more than a device for computing in a distributed database using algorithms and programs. The essence of the mining process is to track and process new transaction blocks in a specialized blockchain network – this is what they call “mining”. Each detected block will be profitable, giving as a result the opportunity to earn bitcoins or other cryptocurrency. It takes different time to search for one block – from several minutes to several days, and this is influenced by two main factors:

• Equipment performance. The more powerful your mining farm, the faster your cryptocurrency mining speed will be..
• Network complexity. The more miners the blockchain provides, the lower the cost of the found block will be and the more difficult it is to find. Having passed an unusual boom of popularity at the turn of the 2010s, the mining industry attracted many ordinary users, who, attracted by the simplicity of earnings, began to purchase equipment in large quantities.

Payback

In the generation of cryptocurrency, the leading role is played by the power of the computer, so only owners of very productive equipment, for which you need to pay with real money, can get good money in digital currencies. Computer firms produce ready-made options, but it’s not necessary to pay a high price: with a minimum of knowledge and skills, you can assemble equipment for mining bitcoin with your own hands.

However, the main obstacle to profitability is not in expensive components for cryptocurrency mining, but in the high cost of operating the equipment. The block of video cards of the mining farm consumes a lot of energy, so electricity bills will be astronomically large, and taking into account these costs, projects pay off much more slowly.

Types of mining farms for cryptocurrency mining

The existing mining farms for cryptocurrency mining can be divided into three types:

1. Based on graphic processors (GPU). In the first steps in the formation of the Bitcoin system, AMD video cards combined in blocks of several pieces made it possible to achieve an excellent mining result. Today, large GPU farms are no longer as efficient due to high energy costs and fast depreciation, but may well be suitable for a beginner.
2. Using FPGA modules. Such logic arrays are not inferior to the GPU in production performance, but they do not require a powerful cooling system, which makes them more reliable and compact.
3. Based on ASIC processors that are designed specifically for bitcoin mining. Today, such computer systems are considered the best devices, making it possible to achieve a speed increase of 25 times, but at the same time, such equipment will cost much more.

Bitcoin Farm

The ability to profitably mine bitcoins led to a rapid increase in the number of mining farms and an unprecedented expansion of the blockchain network, so the appearance of the second generation of cryptocurrencies was a predictable process. Today, miners have many options for mining – from the growing popularity of the Ethereum cryptocurrency to the not-so-famous Ark and Xaurum.

The equipment used also introduces its production restrictions. If a mining farm based on a block of video cards can easily switch to mining another cryptocurrency, then FPGA modules will already require manual reprogramming, and ASIC chips are initially configured for only one option. In such conditions, calculations of the optimal configuration of farms for mining become a difficult task for the owner, who seeks to make profitable investments in mining.

Ether mining

Although for six months since the beginning of 2019, the bitcoin exchange rate has grown by 160% and reached $ 3,000 in June, there are other examples on the cryptocurrency market that show steady growth. Among them is Ethereum – since the beginning of the year, the airtime rate increased by 4485%, amounting to $ 375.5. The advantage of the new cryptocurrency was appreciated not only by miners, but also by large companies with a worldwide reputation. In February 2019, the Enterprise Ethereum Alliance was created – a non-profit block that includes monsters such as Microsoft and Intel, which makes the position of this cryptocurrency even more stable.

Cryptocurrency farm for mining altcoins

Given the great popularity of bitcoin and the increasing complexity of mining, recently, alternative cryptocurrencies (they are also called altcoins) are increasingly being created, and their mining is recommended to novice miners. At the first steps, you need to get a small farm based on GPU or FPGA modules in order to independently test how Litecoin or Monero are mined and understand how to make a profit in this business..

Buy a mining farm

If you decide to stay on the finished equipment, then the Internet will offer you many options for assembling farms for cryptocurrency mining. The price range is in the range of 96,000 – 240,000 rubles, depending on the type of construction and capacity (prices here and below are given as of July 2017). At the same time, assembly according to individual parameters is possible, which can reduce the price of the finished unit for sale.

Equipment power

The more powerful the block you have, the higher the performance of the mining farm. There are some simple rules that you need to consider if you liked a mining farm in the store:

1. The advantage of the finished farm is that all the work on selecting the necessary components for the unit has already been completed for you – you get a turnkey solution that can only be plugged into the outlet and start production.
2. Be sure to include in your estimate the costs of mining bitcoins, and a fee for electricity. Not even the most powerful farm on ASIC panels consumes over 20 kilowatt-hours per day. There are devices with much higher consumption; the seller will tell you the exact figure for the purchased unit.
3. You should not focus only on the indicators of computing power (hashrate), but evaluate the system comprehensively. High block productivity means an increased price and big risks that the owner bears with such an investment in cryptocurrency mining.

Blockchain network complexity

Given the rapidly increasing complexity of the blockchain network, you can give some tips to the novice user:

1. Choose only modern equipment. No second-hand special devices, even at a very attractive price – at the existing pace of work, the wear rate will be very high.
2. Opt for more functionality. For example, by switching the video card you can mine another cryptocurrency (or even find a card that is not related to crypto mining), for ASIC processors this is impossible.
3. Never take a loan for the purchase of equipment, given the high mining risks. The situation may change, and if today the generation of cryptocurrency provides a stable income, then tomorrow this money can hardly be enough to pay for electricity.

What determines the hash of a mining farm

One of the basic characteristics that determine the power of your mining farm is the hash rate – the number of calculations performed per second. The higher this indicator, the more productive your mining farm will be. In mid-2019, 600 kH / s is considered to be a good indicator for video cards, while there are the latest AMD 7990 series models that use two cores with a speed of up to 1,500 kH / s.

Although the hash rate of the miner on ASIC processors is significantly superior to the GPU model, with indicators of 14,000 kH / s, the high cost (from $ 2,500) can stretch the payback period of such a unit for production. In the conditions of sharp changes in cryptocurrency rates and the rapidly growing complexity of the blockchain network, this option is not suitable for all users.

How to build a mining farm

In many cases, own assembly of a block for mining will be more important than buying a finished mining farm. The benefits include:

• lower costs, especially if you already have some parts;
• the ability to select components more flexibly;
• pleasure from the assembly process.

Among the disadvantages:

• the time spent on searching for the necessary components and the shortage of individual components (due to the great popularity of crypto mining, it can be difficult to buy powerful video cards);
• the need for at least minimal knowledge about the operation of equipment, but this gap is easily filled with information on the Internet, where assembly schemes and photos of crypto farms are given;
• lack of warranty or service.

Mining farm frame

If in a regular home PC the case is closed to protect the “filling” from dust, then the mining farm has an open frame for convenient cooling of the unit. In fact, this is a rack of metal corners, adjusted to the dimensions of video cards or other equipment of a mining farm. It is not difficult to find such a frame for sale – they are made by standard sizes (600x400x400 mm, 600x400x400 mm, 700x400x400 mm, etc.), which makes it possible to reliably install blocks on top of each other..

Video card selection

As many as 6 video cards can be connected to the motherboard, you need to use this indicator, calculating how much processing power your farm has for mining. Choosing the necessary model, compare the ratio of power and energy consumption between each other – this will allow you to save both when buying, and when operating a mining farm:

Even without a calculator, it can be seen that at the same price, 6990 video cards differ significantly from other 6900 series cards in terms of higher power with an insignificant difference in energy consumption. Similarly, by analyzing these three indicators, you can find the best option to buy video cards for a mining farm.

Power supply for installation

Choosing a farm power supply is not such a simple process as it might seem at first glance. For a normal power supply farm for mining on six video cards, even 1000 watts may be insufficient. Additional power is also required for other equipment for generating coins, which is why you always need to choose a power with a margin of 150-200 watts. Equally important will be the presence on the farm block of the required number of PCI-E slots, so that you can directly connect all the video cards for mining.

Cooling and air circulation systems

Given the high heat generation, mining farms need additional cooling. This should be taken into account when installing video cards, between which there should be 8-10 cm of space for air circulation. The easiest option is to use floor fans and a special room with a hood, especially if you have more than one mining farm.

Miningfarm assembly

The configuration of the remaining components of the mining farm will not be complicated: everything is just like for an ordinary computer. You will need a hard drive, a motherboard with the ability to connect six video cards (for example, Biostar H81S2) and a RAM slot. The general assembly of your mining farm involves the installation of all components, and the connection of the individual components into a single unit using loops and extension cords.

Cryptocurrency mining launch

Setting up a farm involves installing special software with which you can interact with the crypto mining industry. The choice of the program depends not only on what cryptocurrency you are interested in, but also on the method of mining, because it can be:

• Solo – when the development of the block is carried out alone, and all the income goes to the owner of the mining farm, but this type of mining requires powerful equipment.
• Through special pools in the network, where many miners are engaged in mining and income is divided proportionally to the contribution of each.

Is it profitable to mine cryptocurrency with the help of farms

Before you buy or start collecting your first farm, rarely anyone wonders how this project provides a stable income. Progress in the field of mining solutions does not stand still, and if in 2013-14. 6 months was enough to “go to zero” and start making profit, today this period can be considered a very big luck even for a large company with several dozen crypto farms.

Equipment and maintenance costs

If we summarize all of the above, then we can come to the following approximate cost estimate for an entry-level crypto farm, where the payback period will directly depend on the chosen cryptocurrency and exchange rate fluctuations:

• equipment cost – 150 000 rubles.
• power – 600 kH / s.
• electricity – 2 100 rubles.

Profitability of leading cryptocurrencies

If you make the top 5 most profitable cryptocurrencies at the end of June 2019, then it will look like this:

Farm Profitability

If we compare the income from one coin with the time spent on its extraction, then the position of the Ethereum cryptocurrency looks very tempting. With such a cost of the coin, the equipment for which 150,000 rubles were spent will pay off in 11-12 months. This figure may seem attractive to the investor, but its whole drawback is that it gives a long-term forecast in the field of cryptocurrency trading, where the situation may change, literally, tomorrow.

For those who do not like to take big risks, but want to try themselves in a new business, instead of trying to create new mining farms, it makes sense to do cloud mining. This technology uses the power of network storage without requiring the purchase of special equipment, and the minimum investment is only $ 1.