How to remain profitable mining cryptocurrency in 2020
During the first few years following the launch of bitcoin, mining was a highly profitable and relatively noncompetitive endeavor for those savvy enough to be involved. There was a ton of supply and not many miners, which meant they could solve blocks and reap the rewards relatively quickly and with rather low effort.
This is no longer the case, especially when it comes to bitcoin. The original cryptocurrency has grown increasingly scarce as more miners have joined the fold, increasing its difficulty and requiring more power to mine it effectively and profitably.
And bitcoin isn’t going to become any less scarce or any more rewarding anytime soon.
The halving on the horizon
In May, bitcoin’s block reward is going to be cut in half, down to 6.25 BTC. We’ve known this has been coming and have been anticipating the impact it will have on the crypto landscape.
Bitcoin’s reward was high early on in order to incentivize miners to grow and secure the network. Its code is designed for its reward to be cut in half every 210,000 blocks to help decrease inflation over time as the network becomes more powerful and secure.
Theoretically, miners will still “mine” BTC when the block reward is small (or even zero), but there will be a shift toward miners being rewarded more by transaction fees than by block reward as this decrease occurs.
While it’s a plus that bitcoin will theoretically be around for longer, the decreased reward coupled with the increased scarcity and difficulty mean it’s going to require a higher-powered operation to effectively maximize the profitability of mining.
What to do
After the halving, low-powered operations are going to end up spending more money on energy costs than they’re going to earn from mining – unless they do something about it. There are effectively three options when it comes to remaining profitable mining crypto in 2020:
- Find a more cost effective hosting site
- Swap out your miners for newer, more efficient alternatives
- Optimize your existing miners to maximize performance
A key component in mining profitability is managing your costs. Finding a hosting facility that offers competitive rates and has options to add management services for remote and onsite technical support is ideal. A high-powered and strategically located data center allows miners to host their operations at a lower energy cost while increasing their hashing power and maximizing profitability.
The Antminer S9 by Bitmain has been considered somewhat of the gold standard in mining devices up until recently. As with all technology, newer models like the S11 and the S17 have been released and have contributed to the S9 becoming essentially outmoded for anyone hoping to profitably mine crypto (without improved cost efficiencies and/or leveraging optimization firmware to tune performance).
The Antminer S17+ provides a sharp increase in hash power from the S9 – up to 73 TH/s compared to just 14 for the elder version.
Bitmain has also just announced the availability of its S19 Pro, offering an incredible performance of 110 TH/s and an enhanced circuit architecture to greatly improve power efficiency.
A device upgrade coupled with a reliable hosting provider is a strategic solution to remaining profitable in 2020.
Replacing your miners outright isn’t the only way to keep your equipment high-functioning after the halving. Leveraging optimization firmware within your existing miners can help extend their profitable life by boosting hashrate and energy efficiency.
Selecting the right miner optimization tool can help improve your hashrate by approximately 3-20%, which allows your miners to be in service longer with profits going right to your bottom line.
Key features to look for in a firmware optimization solution:
- Energy optimization: Granular power management that gives you the ability to choose your watt setting to maximize hashrate.
- Overclocking: Functionality that facilitates running the miner at a higher speed so you can push even more performance out of each device.
- Monitoring: Provides visibility into miner performance so you can make informed decisions related troubleshooting.
- Bulk device updates: Updating miners one at a time can be burdensome, so this feature is a plus, making it easier to facilitate fast and hassle-free updates to the latest firmware version.
- Remote configuration: Unless you have direct access to your miners, this functionality makes it simple to handle reboots, resets, fan control adjustments, pool changes, and more all on a remote basis.
- Reporting: Accurate and simplified reports help you track what is happening with your miners. Reporting is ideally available in a web portal with detailed statistics, charts, and event logs.
- Compatibility: There are a lot of miner models out there, be sure to confirm the firmware works with the hardware version you own.
Many of the solutions on the market today charge a small fee per miner or a small percentage of the hashrate improvement. A few examples of solutions available include, but not limited to: Braiins OS, ASICseer, and Hiveon ASIC.
Let Compute North handle your miner upgrade
Compute North owns and operates state-of-the-art facilities throughout the country designed to help users make the most of mining and of blockchain as a whole.
Whether you’re installing a firmware upgrade to your existing equipment or replacing it with entirely new devices, Compute North can facilitate the process from start to finish, including initial setup and ongoing support after the fact.
Our team prioritizes efficient and properly executed processes to minimize downtime and to maximize your profitability.
Contact us today to stake your claim to profitable mining in 2020 and beyond.