Bitcoin halving is an important event happening every four years since 2009, when the cryptocurrency was released. When 210,000 blocks are mined, miners’ rewards are cut in half to lower supply and drive demand to grow. In total, there will be approximately 33 halvings, with the fifth one happening in 2024.
This halving will reduce the reward from 6.25 BTC to 3.125 BTC. While this factor will benefit the cryptocurrency and even investors, miners might need to upgrade their mining rigs to maintain a stable source of income to cover all the mining-related expenses. The hash rate increases and the revenue declines significantly. However, it has been noticed that miners would sell their Bitcoins at the end of 2023 to build liquidity, binance data shows.
Still, the halving poses serious challenges, so here’s how to improve your mining rig strategically.
Choosing the best type of mining rig
The type of mining rig you choose can determine your success. That’s because mining constantly changes and becomes more complex, so it’s best to update, when possible, to sustain your activity. For instance, GPU cards were commonly used in Bitcoin mining, but they’ve become redundant due to high power consumption and massive heat production. They’re not sustainable anymore and don’t offer the best results.
In comparison, the big battle between ASICs and FPGAs continues as they’re top performers on the market. ASIC chips are made especially for crypto applications, so they deliver superior hashing power. However, they’re not that versatile, so you must choose them in accordance with a specific algorithm.
On the other hand, FPGAs can be programmed after their manufacture to fit your needs, so they’re more efficient, flexible, and sustainable compared to their competitors. Unfortunately, professional miners can use them as they’re considerably complex and significantly expensive.
Obtaining all the hardware rig components
While you can buy a mining rig already assembled, these systems are pricey, and your mining needs to be done right to overcome the upfront costs. So, most miners choose to build their own rigs to lower the costs and have the ability to improve them on the go.
Starting with the mining hardware, ensure you choose a product based on the price, hash rate and efficiency. Indeed, cheap products may not be able to sustain the high-energy requirements of mining, so you may need to invest some more into a good ASIC at least. The hash rate must also be higher to finalize the complex mathematical problems.
Efficiency is measured in accordance with several factors. First, consider the power cost in the region where you’ll mine because, depending on it, your overall profitability will be higher or lower. At the same time, know that most ASICs are rapidly replaced as new ones are developed annually, so you must also cover this expense.
PSU, cooling and the motherboard
The mining rig is yet to be completed because you’ll need a power supply unit (PSU) that handles all the power consumption. The PSU must be energy efficient for lower electricity bills, and the wattage must be higher than the power consumption. Usually, the wattage should have a 20% buffer to provide the possibility of updating.
When it comes to cooling, it’s best to provide qualitative products because they can increase the longevity of your rig. Overheating affects performance in the long term, so you need to choose between air cooling, liquid cooling or immersion cooling solutions.
Lately, the motherboard and the CPU have essential supporting roles. The motherboard must be compatible with the other components, and choosing a specialized mining motherboard is recommended for maximum stability. At the same time, the CPU is required to run the operating system and manage the GPUs or ASICs.
Handling the mining software
Now that you’ve got all the hardware, it’s time to seek all the software needed to do the mining job. Start by analyzing the mining operating system options, because it helps monitor and control your activity. Popular solutions include Linux-based systems, but many others are available on the market.
There’s also the need for mining software, which performs the mining and solves the complex mathematical problems. Choosing one that supports multiple algorithms and coins is recommended, but having a user-friendly interface is more important.
Finally, you’ll want to be part of a mining pool to have the chance to gain sustainable income as a beginner because mining on your own is close to impossible. In mining pools, miners combine their computational power to mine blocks more efficiently but also have to split the rewards. You’ll need a digital wallet to keep your mined cryptocurrencies and make transactions.
Calculate and optimize profitability
Building the strongest mining rig isn’t enough to be successful as a miner. You must calculate and constantly optimize the profitability of your activity in order to have consistent results. You can assess the current profitability rate by using a mining calculator that estimates profits based on general factors, like the hash rate or power consumption.
At the same time, mind other elements that contribute to profitability, such as the electricity costs, market prices and current mining difficulty. Considering the halving is getting closer, you should expect the difficulty to increase considerably, so it would be best to learn how to optimize mining.
For instance, you can start by boosting the energy efficiency features of the rig, like getting proper PSUs and ASICs to reduce operational costs. Some miners choose to push their components’ limits and increase performance, but this will increase the power consumption, and if the rig isn’t placed currently, overheating can become a huge risk. Regardless, regularly monitoring the rig’s performance is essential to adjust strategies and maximize profits safely.
Bottom line
The Bitcoin halving is the fifth major event since its release on the market and will influence miners’ rewards as they’ll be cut in half. Therefore, miners will benefit from less income while having to contribute more to the network with computational power to withstand the market’s challenges. Thus, the mining rig needs to be updated with the latest hardware and reliable software.
