Cryptocurrency Mining 101: Is Solo Mining Worth It?

Source: Bitcoin Garden, originally published on .

https://bitcoingarden.org/cryptocurrency-mining-101-is-solo-mining-worth-it/.

These days most mining is down by pools, but if you have enough hashing power and the right skills, you might be able to mine solo.

These days cryptocurrencies are more popular than ever. It’s no surprise that a huge number of people are getting into the game. Along with the rapid growth users so too came an increase in the difficulty of mining. It’s gotten to the point where most stand-alone mining rigs cannot find cryptocurrency blocks as easily as they used to.

Nowadays, there are dedicated GPUs and ASIC devices designed solely for mining and not only that mining rig owners have decided to combine their efforts and create mining pools. Essentially, a team works together and if one of the block solutions is valid then the pool gets rewarded for the found block divided according to the invested effort of each participant.

With so many successful teams out there, today it is widely believed that collective mining on pools is the only option, but it’s not. If you have enough mining power (hashrate), you can still mine most cryptocurrencies on your own. But, before we get into it, here are the top things you should know about solo mining:

Top 5 Things to Know about Solo Mining

  1. Solo mining is only for those who have great mining power either through their own rigs or rented power.
  2. Before you start solo mining, understand your computing resources
  3. Estimated rewards may differ from real-life income, remember that mining is based on probability and reality can be very different from the estimates.
  4. Experiments with less established or unpopular coins can end either very badly or very well. Do your research before you get involved with any coin. See what the forums are saying, look at the different websites before you dig in.
  5. You can solo mine even without rigs if you use rented computing power.

Solo Mining: Is It Worth It?

There isn’t an easy yes or no answer to this question. With solo mining, you’re investing all the time and effort by yourself so nobody has a right to your reward. If you find the block, then the reward is all yours.

Likewise, it can be harder to find blocks by yourself, so you are definitely lowering your odds. So you have to ask yourself: is the risk and effort worth the reward?

How to Solo Mine

There are two ways to solo mine: you can use one of the existing solo mining pools or you set up your own cryptocurrency node and connect your rigs to it.The latter option is difficult and will work well only for experienced miners with a number of rigs and a good working knowledge of Linux.

For most users, it’s better to use one of the mining pools that provide an opportunity to solo mine. Mining pools charge approximately 1-1.5% fee. In return, you get detailed statistics that help you analyze your work. In addition, this fee buys you peace of mind. Unlike using your own node, you can be sure that the system won’t let you down when you least expect it.

Who should solo mine?

It makes sense to solo mine only if you have so much mining power that in theory would allow you to find blocks within reasonable time spans. A good way to estimate your chances of finding a block is using network statistics. Let’s take Ethereum Classic as an example:

Let’s say, our hash rate is 10 000 Mh/s, which corresponds to 40 rigs with 8 GPUs each (Radeon RX480/580 or Nvidia GTX-1070). It makes 320 GPUs in total. According to WhatToMine calculator, this set will bring 19 ETC daily. The formula is simple: divide the estimated number of coins per day by the reward for one found block.

As of now, the block reward is 4 ETC, so on average we can expect to find 4 blocks, in case of bad luck – 2 or 3, and in case of good luck – 5 or more. The reward goes up and down in the range from $185 to $460 or more.

These are pretty great stats, but remember there is some serious hashpower behind them. Another way to estimate your chances of finding a block based on your mining power is Rubin mining calculator website, simply choose the desired coin and enter hash rate and you will get your estimated block find time.

Also, this should go without saying, but as a solo-miner don’t try to inflate your computing power on the estimates. You have some serious competition out there and you’ll just waste your time if you exaggerate your rig’s capabilities.

Computer Capability and Solo Mining

It’s important to understand that even the most simple graphics card is capable of finding a block – it’s just all about how much time it would take. In an ideal world, the above-mentioned 320 GPUs will find blocks 320 times more often than 1 GPU.

However, in the short run, one card may find a block earlier than 320 cards, it may happen even in the first minutes of mining. Don’t forget that mining revolves around probability theory. Just like winning the lottery or anything else, there are ways to improve your odds, but you can’t predict luck.

Many believe that graphics cards connected to the same rig or even to the same pool coordinate their actions. One of the most common misconceptions is that one card is supposedly working on the specific range of the problem initial settings, while another card is working on another range and so on.

But this is a mistake. Every graphics card operates separately. Moreover, there is no such thing as work sharing here. For example, every 15 seconds in Ethereum Classic all the graphics cards in the world receive the same problem and try to find a solution to it. This means that there is no pooling going on.

Likewise, a similar principle is at work for solo mining and if you don’t have enough mining power, you can try mining coins with lower network difficulty such as Musicoin, Expanse, and others. In fact, experienced miners regularly monitor the cryptocurrency market and search for new currencies to mine and and test their luck on.

Solo Mining Strategies

It’s all about choosing the right coin. Conservative miners choose cryptocurrencies that are reliable and successful like Ethereum, Ethereum Classic or Zcash. They may only be able to find one or two blocks a day, but they can be comfortable knowing that the currency is solid and that they at least have a chance of finding a block.

Other miners prefer to take risks and experiment with less popular and established coins like Dubaicoin, WhaleCoin or YoCoin. These are easier to mine, and their exchange rates are prone to sudden rises (and falls), which means that miners might make good money on them. With this strategy, however, you are not only going to be a miner, but also a trader so brush up on these skills as well!

Solo Mining Platforms and Perspectives

Mining every currency is different. The block reward in Zcash is 10 coins or $2900, in Ethereum – 3 coins or $2330. For a found block in Musicoin you get 250 Music that amounts to only $4.55, while Pirl brings 10 coins or $5.80. In Whalecoin, the block reward is lower – 3.06 coins or $0.20. And in Bitcoin, a block reward is 12.5 BTC or as much as $120,000. If you are lucky, even one ASIC like Antminer S9 might find a Bitcoin block and you’ll end up with this huge amount of cash.

As you can see, the numbers are very different on each crypto network. But in the end, it all depends on how many blocks you find per day. It’s important to weigh the value of each block and the difficulty of finding it. For example, it is much better to find 20–30 Musicoin blocks, than spend an entire day competing in vain against the huge amount of Ethereum miners.

Can Solo Mining Without Mining Rigs be Profitable?

Yes, it can! Even if you do not have enough power yourself, most pools are 100% compatible with mining power rental platforms like Nicehash and Miningrigrentals. So all you have to do is just buy the desired amount of computing power and invest it properly.

If you are lucky enough to guess or you can calculate the right moment to start mining to use your rented computer power, you can make some serious money without spending much yourself, but look to other users examples before striking out on your own with this strategy.

Solo Mining 101

As with anything in the cryptocurrency universe, there is no simple yes or no answer. Nonetheless, if you do your homework and know about the capabilities of your hardware, then you can make an educated decision on which currencies to pursue. At the end day, solo mining can offer some serious rewards and with the right knowledge and a little luck, you just might strike gold!

About the author

My name is Mikhail Korolev. Proud father, husband, and drone-racer. I’ve been working in IT Industry for more than ten years. I love finding new technology trends and I always try to work on the most promising ones. Cryptocurrencies are in the first stage of the World expansion and we will see a huge leap in their development very soon. CEO 2Miners.com

 

The post Cryptocurrency Mining 101: Is Solo Mining Worth It? appeared first on Bitcoin Garden.

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