You can only use a bitcoin mining rig to mine other cryptocurrencies that use SHA-256 algorithm. This is because mining bitcoin requires SHA-256 hashing algorithm. Although you can use a CPU or a GPU to mine any coin.
Mining refers to the process of executing complex calculations on various blocks of data, maintaining the bitcoin network. The efforts of the miners are compensated with a certain quantity of cryptocurrency. It is worth acknowledging that this is an arms race that chiefly compensated Bitcoin’s early adopters.
Bitcoin is the first cryptocurrency to be decentralized and was launched back in the year 2009. Thereafter, a number of similar cryptocurrencies popped up. The profit, miners make, depend on several factors. The most basic determinant is the hash rate, that is, how many hashes your device can produce. The computers specifically designed for mining have a higher power consumption, a condition that increases the overall running costs. Besides, the difficulty of mining increases with time as well.
Is it Profitable to Mine Bitcoin?
If you’ve been mining bitcoins since the day it was launched back in 2009, you must have gained a lot of money. Still, you may have lost a lot in some ways. This is because Bitcoin is not the right opportunity for amateurs who operate on a small scale. There are a lot of related costs as well as complex mathematical computations and processes that may render it unprofitable for the consumer.
It is important to acknowledge that Bitcoin mining is only good for large-scale operations only. If you are a beginner, where can you turn to now? Well, Ethereum and Monero, are some of the coins that can be mined profitably with a decent miner. You can calculate the estimated profit you will be making using a mining calculator. You can check our guide for that here.
With an ever-increasing number of people joining the crypto space, your options may become quite limited. Mining requires expensive hardware. You may be required to increase your investment to keep mining the very same coin or switch to a different coin.
Mining Bitcoin and Other Cryptocurrencies
It is prudent to keep in mind that Bitcoin is a volatile cryptocurrency. Even though it has produced a lot of millionaires lately, its value can easily plummet. If you intend to hold on to BTC you mine, instead of selling immediately, this information will be helpful. You can estimate how much you can gain from mining using various profit calculators available online.
Even though you may want to solely mine Bitcoin, it is quite unlikely that your rig will successfully execute complex calculations needed to earn rewards. It may be necessary for you to join a mining pool. This involves a series of devices linked and engaged in a combined mining effort. Therefore, the Bitcoin rewards are shared between the miners who provided processing power to perform these complex calculations. Nevertheless, the manner in which profits are shared may vary with pools. The following steps can be very helpful. Follow them and enrich your understanding:
Select Your Miner
The best and easiest way to get started mining Bitcoin is obtaining an ASIC, for example, the Antminer s9. Such a machine is specifically designed to mine Bitcoin. This implies that it will essentially offer the highest return on your investment. The only problem is that these devices are too expensive. For instance, S9 goes for $2,490, and besides, you will have to acquire a separate power supply unit which might cost you up to $360. Nonetheless, the devices are solely meant for mining bitcoins and give good returns.
The device will not work if you attempt to use it to mine other cryptocurrencies that have different hashing algorithms. For example, Bitcoin uses SHA-256 algorithm for hashing. You cannot use Antminer s9 to mine other cryptocurrencies like Litecoin which uses Scrypt algorithm. But you can still use Antminer s9 for other cryptocurrencies that use SHA-256.
List of major SHA-256 coins here.
You can alternatively design your personal Bitcoin mining rig. While they may not be quite efficient in terms of power as well as hash rates, they only require fewer upfront costs and can be used to mine other cryptocurrencies apart from BTC. To kick-start, you will have to buy a case for the device and then select a motherboard as well as graphics cards for mining. Put together the pieces and install the operating system as well as mining software.
Establish your Bitcoin Wallet
Once you’ve set your mind for mining, you will have to create a bitcoin wallet for storing your profit. Suppose you don’t intend to spend your coins right away, you can use bitcoin paper wallet generator to create a paper wallet. If you intend to cash out on a regular basis, it will be appropriate to use a software wallet.
Select a Bitcoin Mining Pool
As already highlighted in the preceding section, it is necessary to combine efforts in mining. Visit Bitcoin wiki to get acquainted with mining pools.
These are the basic steps you need. You can learn more here. Now, back to the question “Can I use a Bitcoin mining rig to mine other cryptocurrencies?” ASICs are specifically designed for a precise hashing algorithm. For this reason, Bitcoin ASICs utilizing SHA-256 cannot be used for mining Litecoin or Dogecoin. Litecoin and Dogecoin use Scrypt algorithm. Nonetheless, both CPU and GPU can be used for nearly all coins, though the hashes will be different.
Mining the Most Profitable Coin
A CPU or even the most powerful GPUs are incapable of mining bitcoin profitably. This is because powerful ASICs dominate the bitcoin network. The hash power your GPU produces is minuscule compared to ASICs and your device contributes very little to total hash power of the bitcoin network.
But fortunately, there are many other coins that can be mined with a decent GPU or a custom built mining rig. There is no such thing as “most profitable coin to mine”. You must mine what is profitable at the given time. Check our guide on that here.