New to mining: Bitcoin, Litecoin, algorithms, hardware

[sad_miner]

I have rented some compute power to try out some mining, mostly on AWS but also Linode, and three laptops at home. I'm using cpuminer. I have six miners going at a total of about 800 khash/sec (this is in a pool at litecoinpool.org). I would try solo mining, Bitcoin or Litecoin, but I know I need specialised ASICs like AntMiners, is that right? Are older ones being sold on eBay for $100 to $300 a good way to try it out before dropping a few thousand dollars on new mining hardware?

I was thinking on the possibility of finding a block, or a probability, but I take it that would be difficult to compute because of the competitive lottery - is it that the more firepower you have to crunch those hashes, the more probability you have of finding a candidate block that has a relationship to the "target" whatever that is?

I've tried to read the Bitcoin source and looked at slow but more educational mining software to try and understand it a bit more, but not sure if I'm really getting it. I'd like to write a pseduocode algorithm and implement my own toy miner and just see if I can get it to work. If I can explain the mining process for Litecoin and Bitcoin at a conceptual and technical level, I'd be happy with my mining experience. I don't expect to make anything unless I go for some mining hardware later on.

I think in Bitcoin (I'm also trying to find a reasonable comparison to adjust for Litecoin) what happens is that the miner collects some pending transactions in the order they arrive on the network into a pool, and selects some so that if a block is found it won't be too large, is that roughly why the debate about a solution to the 1MB hard limit is going on?

So the mining software creates a block maybe from a template, and calculates the merkle root of the transcations from the pending pool, including a coinbase among the transactions. The header in the new candidate block contains a version number, the hash of the previous block on the blockchain, the merkle root of the coinbase + pending transactions, the current timestamp (is it updated every time a computation is done?), the target (from getdifficulty()?), and a nonce.

New block to try and add to blockchain:
--> Version
--> Hash previous block
--> Merkle root of pending transactions and coinbase
--> timestamp
--> bits (current target)
--> nonce

... and to try and find a new block, the miner iterates over this new blockheader, updating the nonce until it fails (rejected by network? someone found it first?) or until sha256(sha256( new blockheader )) < target? If not found, increment nonce, (adjust timestamp?), and try double hashing again until either it fails or succeeds.

If that's correct, is mining Litecoin roughly the same thing but scrypt is added after hashing? I'm not entirely sure what the Litecoin Wiki is saying about the use of scrypt. Example code uses sha256, but near the end it seems to be saying that miners concatenate the hex strings in little or big endian, then use the scrypt parameters N = 1024, r = p = 1, and 80 bytes from previous block header which is fed to scrypt, then checked against the target.

So far I haven't found a clear explanation of what exactly is going on with mining. I take it that a miner gets the latest block from a full node with the entire block chain, and queries some daemon for the current difficulty/target, and the daemon supplies it with some pending transactions, and then the computation is done, which is broadcast to the network if candidate_block < target.

Aside from that, when I join a pool such as litecoinpool.org and put in about 850khash/sec. and make around 0.001774308936 LTC /day, I can see it will take quite a long time to get a litecoin if the pool mines a block. Otherwise I can get a litecoin every now and then if I just keep going with some work like this, although it doesn't seem worth it at all unless I have something like an Antminer (or several of them) for Litecoin.  Not sure about Bitcoin, it seems that is just going to be far too difficult and I wouldn't be able to afford a few of the latest AntMiners to get even with the purchase later on if I actually find some blocks.  Maybe it's the same for Litecoin...

Thanks if anyone can answer quesitons, and wants to keep up the discussion on being new to mining, and especially the algorithms for mining and exactly what happens to mine a new block.

[CryptoKraken]

Sad_Miner,
    That's a execellent set of questions to pose to the veteran miners on the forum. I'm right there with you, I'm chewing at the bit to start mining but, like you, I'm just not sure what equipment to invest in that's going to actually work, to produce coins. I'll be monitoring your post in hopes that someone replies with some good informative mining information that will help new miners to understand what it is we need to be buying, learning, & doing to mine effectively as starters.
Later,
Gary

[sad_miner]

Hi Gary,

Yes I hope so, I'd like to learn as much as possible and play around with bitcoin and the libraries out there; bitcoinj perhaps for most things except mining, maybe some C++ code to load in the blockchain from Bitcoin Core and see if I can write a simple API with a few calls to inspect and search the blockchain.  It's all very exciting and has been for a while, I still don't expect mining to ever be profitable but if I can just get something going to learn more about it, that would be cool.  I am definitely going to make a new altcoin for myself and tweak some mining code to dig around in the guts of it some more, I hope that what I discover in that process can be know-how transferrable to Bitcoin

Since I don't expect going in for a mining rig would be a terrific idea, I think starting out with some much cheaper USB mining hardware that draws a trivial amount of electricity by comparison is a good way to start out.  Not exactly sure yet, probably just a negative return hobby, but it still sounds like fun.

All the best

[mocacinno]

To be honest, i skipped a lot of your two posts, it was a bit TL;DR (to long, didn't read ), altough it looked to me like you've done your homework. It seems most of what i've read was pretty to the point.

There's only one big thing you're not adding to your equation: the power consumption... Only the newest gear (S9 for sha256d hashes, L3 for  scrypt) will maximize your profit, since only these machines will have the highest hashrate per Joule. As a matter of fact, unless you have (nearly) free power, most "older" ASIC's will run at a net loss because their power consumption is to high when compared to their hashrate.

As a matter of fact, the very thing you're doing (cpu mining LTC) is a really, really bad idear... The sheer amount of power you'll burn to find a single share is astronomical.

It's pretty easy to spot which hardware you can run profitably...
For sha256d-based coins (bitcoin, peercoin, namecoin,...):
Search this forum, trusted online shops, ASIC producer's website, ebay,... for an ASIC
Search this ASIC in this list: https://en.bitcoin.it/wiki/Mining_hardware_comparison
Surf to: https://www.coinwarz.com/calculators/bitcoin-mining-calculator (for bitcoin)
Fill in all parameters (hashrate and power can be found on the wiki, power cost = your power cost, pool fees is usually ~1%, difficulty; block reward; price are pre-filled and hardware cost is the price you were going to pay)

This calculator will show you how long it'll take to break even at current BTC price, block reward and diff! Personally, i wouldn't start mining if i couldn't break even in a couple of months using second hand hardware, and maybe 6 or 7 months when purchasing brand new ASIC's.
Don't forget to add shipping, handling, customs charges, cooling, shelves, controllers, psu,... And take into account both ASIC producers that currently produce decent hardware (bitmain and canaan) have a 90 day warranty. Canaan's products are relatively stable and their support is OK; bitmain on the other hand has many horror stories about breaking hardware and bad support.

[sad_miner]

Hi,

Thanks for taking the time to reply.  I am especially grateful for your recommend on hardware and how to increase profitability and the cost of electricity.  I already figured I was being incredibly stupid mining LTC with cpuminer, but I just couldn't help myself.  Had to give it a try while I dug around some source code and searched on how mining is actually done.

I think the cost of electricity was already a big issue way back in early-ish 2010, when Gavin the former lead developer of Bitcoin Core did some arithmetic and found that his electricity costs outweighed the bitcoins mined when it was possible to do that on a laptop at home.  Of course back then bitcoins were not worth what they are today, but it was an early indicator that even if bitcoins were to go up in value, so would the energy cost necessary to keep computing as the difficulty presumably went up as more blocks were mined, or too many blocks trying to get in per unit of time (?)  Not sure what exactly pushes difficulty, aside from maybe restraining block generation and therefore new coins at roughly 1 block each 10 minutes.  As an aside, if that's correct, only about 6 miners per hour around the world get a reward for "solving a block?"

I've looked at a few calculators now and I think I won't be going into mining for profitability.  It's cool but I like software and how it all works, and I'd like to hack on the code and learn more with a nonsense altcoin from the guide here.  Still think it's worthwhile doing a little mining, since electricity costs are high, maybe starting with a USB device just for the heck of it, for the sake of doing some mining.  I think profitability later for me will be waiting until I think the price has gone down sufficiently and buying on an exchange.  Then later I will most likely have a closer look at the latest mining equipment for scrypt and sha256.

Fascinating, thanks again for taking the time to reply here!

[paladin_AOE]

if you want mining LTC, better use L3+ or invest on hashnest.com if you want

[QuintLeo]

I have rented some compute power to try out some mining, mostly on AWS but also Linode, and three laptops at home. I'm using cpuminer. I have six miners going at a total of about 800 khash/sec (this is in a pool at litecoinpool.org). I would try solo mining, Bitcoin or Litecoin, but I know I need specialised ASICs like AntMiners, is that right? Are older ones being sold on eBay for $100 to $300 a good way to try it out before dropping a few thousand dollars on new mining hardware?

 There is no way to be profitable on SHA256 based coins like Bitcoin/Namecoin/etc, or on Scrypt-based coins like Litecoin/Doge, or on X11/X13/X15/Qubit/Quark based coins like DASH with anything but an ASIC-based miner - and in the first 2 cases, they better be fairly RECENT ASIC-based miners.

 ASIC are just that much more efficient at those algos.

 Cost of electric isn't a huge factor RIGHT NOW if you have recent equipment, but it's still a major factor on paying off your miners long-term even with the most current gear - unless the current price jumps survive for quite a few more months.


 AWS is NOT profitable to mine on, Amazon charges WAY too much. Ditto the Google equivalent or Azure.

[sad_miner]

I have rented some compute power to try out some mining, mostly on AWS but also Linode, and three laptops at home. I'm using cpuminer. I have six miners going at a total of about 800 khash/sec (this is in a pool at litecoinpool.org). I would try solo mining, Bitcoin or Litecoin, but I know I need specialised ASICs like AntMiners, is that right? Are older ones being sold on eBay for $100 to $300 a good way to try it out before dropping a few thousand dollars on new mining hardware?

 There is no way to be profitable on SHA256 based coins like Bitcoin/Namecoin/etc, or on Scrypt-based coins like Litecoin/Doge, or on X11/X13/X15/Qubit based coins like DASH with anything but an ASIC-based miner - and in the first 2 cases, they better be fairly RECENT ASIC-based miners.

 ASIC are just that much more efficient at those algos.

 Cost of electric isn't a huge factor RIGHT NOW if you have recent equipment, but it's still a major factor on paying off your miners long-term even with the most current gear - unless the current price jumps survive for quite a few more months.


 AWS is NOT profitable to mine on, Amazon charges WAY too much. Ditto the Google equivalent or Azure.

Thanks for the info, I tried the cloud things to see what I could get but not running them for mining since I managed to figure out what a waste of resources it was   Yes AWS compute hurts, I'm not keeping it for any longer than a few weeks.

I'm using my big rig on AWS for other projects, mostly development.

I might mine with the latest gear later on, but I don't ever expect to be profitable from mining.  I like the idea for the sake of it and trying one of the USB miners isn't a terrible idea if they're quite high in gig hashes/sec and low in price, in my view.

Thanks again

[gogolang]

I have rented some compute power to try out some mining, mostly on AWS but also Linode, and three laptops at home. I'm using cpuminer. I have six miners going at a total of about 800 khash/sec (this is in a pool at litecoinpool.org). I would try solo mining, Bitcoin or Litecoin, but I know I need specialised ASICs like AntMiners, is that right? Are older ones being sold on eBay for $100 to $300 a good way to try it out before dropping a few thousand dollars on new mining hardware?

 There is no way to be profitable on SHA256 based coins like Bitcoin/Namecoin/etc, or on Scrypt-based coins like Litecoin/Doge, or on X11/X13/X15/Qubit based coins like DASH with anything but an ASIC-based miner - and in the first 2 cases, they better be fairly RECENT ASIC-based miners.

 ASIC are just that much more efficient at those algos.

 Cost of electric isn't a huge factor RIGHT NOW if you have recent equipment, but it's still a major factor on paying off your miners long-term even with the most current gear - unless the current price jumps survive for quite a few more months.


 AWS is NOT profitable to mine on, Amazon charges WAY too much. Ditto the Google equivalent or Azure.

Thank you very much dude.

[mocacinno]

I might mine with the latest gear later on, but I don't ever expect to be profitable from mining.  I like the idea for the sake of it and trying one of the USB miners isn't a terrible idea if they're quite high in gig hashes/sec and low in price, in my view.

Thanks again

Those usb miners are a perfect teaching device, they're great to help decentralise the mining (even if it's just a tiny bit), and they're a nice tool to mine on some low-diff newer sha256d-based altcoins. However, if you use them to mine BTC, you won't break even, unless you have nearly-free electricity and hardware and plan on running them for years (IMHO).

However, for the 50 bucks you'll spend on them, you'll have a great learning experience, and lots of fun (i know i did have fun setting them up in the past).

[stevebc]

Never heard of these USB miners - any recommendations of a good cheap one for playing with mining the newer Altcoins as they come out?

[PriitV]

Never heard of these USB miners - any recommendations of a good cheap one for playing with mining the newer Altcoins as they come out?

AFAIK, the USB-miners only work with sha-256 (bitcoin etc). Correct me, if I'm wrong.

[mocacinno]

Never heard of these USB miners - any recommendations of a good cheap one for playing with mining the newer Altcoins as they come out?

AFAIK, the USB-miners only work with sha-256 (bitcoin etc). Correct me, if I'm wrong.

http://m.ebay.com/itm/222576219886?_mwBanner=1

Scrypt usb miners exist

That being said: they're also not profitable to run

[NiHaoMike]

The best bang for buck, for those who have free electricity, are somewhat older ASIC miners. S5 is one, maybe even S7 nowadays. Just calculate the TH/s/$ to find the best deal. It also used to be that near the beginning of the school year, you had to compete with the college students for used miners, but they're mostly mining altcoins with GPUs now. (One reason is that the S7 and unmodded S5 are too noisy to run in a dorm.)

[stevebc]

I ended up playing with some rented hashpower from nicehash.

Not something I'd do regularly, but a good way to get a quick chunk of coins on anything that has just opened for mining.

Quite fun really!

[QuintLeo]

There's only one big thing you're not adding to your equation: the power consumption... Only the newest gear (S9 for sha256d hashes, L3 for  scrypt) will maximize your profit, since only these machines will have the highest hashrate per Joule. As a matter of fact, unless you have (nearly) free power, most "older" ASIC's will run at a net loss because their power consumption is to high when compared to their hashrate.

 True to a major degree on Bitcoin, but older-gen Scrypt miners are still VERY profitable - even before the major Litecoin runup that started 3-4 months ago the Innosilicon A2 units were break-even at about 9 cents/kwh electric cost, the Alcheminer would be about the same and the KNC Titan a little better off when those are still working.

 I'm pretty sure the GRIDSEED based ASIC miners are profitable NOW (though their income is very low due to the low hashrate), as price is still a lot higher compared to the difficulty rise the last 4 months and they would be problematical to achieve ROI on unless you have free electric or got them VERY VERY cheap.


 I don't think the S5 is break-even any more even at 3 cents/kwh power cost. The S7 is, but it's getting marginal even with VERY cheap electric.


 There are a few Scrypt-based USB miners - several options using the old Gridseed GC3355, and the Futurebit Moonlander using the Alcheminer chip - they're profitable, but probably not enough so to pay off their purchase price unless you have FREE electric.


  NEW altcoins rarely show up using algos that have existing ASIC miners to mine with (the only recent ones I am aware of are all MULTI-algo and at least one of the algos is non-ASIC, like Myriad or DGB) - the normal progression for a NEW altcoin is "wallet has a miner to mine with a CPU", "stand-alone CPU miner(s)", "stand-along GPU miner(s)", and in a FEW cases "ASIC-based miner(s)" - though some altcoins skip straight to the "stand-alone GPU miner" step if they can.

[mach123coin]

There's only one big thing you're not adding to your equation: the power consumption.... As a matter of fact, unless you have (nearly) free power, most "older" ASIC's will run at a net loss because their power consumption is to high when compared to their hashrate.

Search this ASIC in this list: https://en.bitcoin.it/wiki/Mining_hardware_comparison
Surf to: https://www.coinwarz.com/calculators/bitcoin-mining-calculator (for bitcoin)
Fill in all parameters (hashrate and power can be found on the wiki, power cost = your power cost, pool fees is usually ~1%, difficulty; block reward; price are pre-filled and hardware cost is the price you were going to pay)

This calculator will show you how long it'll take to break even at current BTC price, block reward and diff! Personally, i wouldn't start mining if i couldn't break even in a couple of months using second hand hardware, and maybe 6 or 7 months when purchasing brand new ASIC's.

I have free electricity here. About 5KW spare on my circuit.. I know of a similar friend who is interested in some USB mining using solar and windmills/battery bank(massive 500AH one) on a RV . His idea is to get a 4G net unlimited cell phone connection and just mine for the investment purposes and hobby fun.  I will have to check to see how much bandwidth these miners use, and whether the latency is so poor you miss submiotting your share on pool mining. ?

Consider this, back in 2011-2013 , a cpu mined bitcoin was cheap on the market price, now BTC is at 4800 USD today. I don't think even the stock market and 401k hedge funds can beat that except in rare cases. You have to consider the return on your long term interest as paying for the electricity cost and even a few hardware steps in the sub $1k range.  I tried gpu mining with a gtx 570 back in 2014 and was found wanting. Today's hardware is great.

The thing I can't figure out is mining with GPU and several algorithms on pools have shown me that pofitability is all over the place on a day to day basis.
Has anyone looked into more algorithms capable with these SHA-256 only engines?

About cooling these puppies.  My background is a hardware repair of industrial PCs, mainframes, and desktops since 1990.  Ever change the antifreeze cooling tubes on a hard disk assembly cabinet the size of a fridge ?

Mineral oil cooled computers are possible.  Oil conducts heat away from parts 10X better than air ever will, even some liquid cooling water systems can be beaten.  
https://www.pugetsystems.com/mineral-oil-pc.php A $39 walmart acrylic tank. $20 pump, $70 of oil wholesale. Just imemrse the whole PC.

 Get a plastic/glass fish tank, fill with oil, install a Harbor Freight sump pump. Pump oil through a transmission oil cooler made from aluminium with some decent fans attached. Maybe $100 all together, but absolutely rock solid cooling
Cools all surfaces, reliably, even the PC power supply can go into there.  Sure makes up for bad designs on the antminers overheating.
I built a few back in 2010.  

[SUKY2217]

no future words totaly pure satifaction of readding this in my hole crypto digging info
and that oil cooling system very fascinating project, for me next project who knows i might try on cheers guys

[QuintLeo]

I have free electricity here. About 5KW spare on my circuit.. I know of a similar friend who is interested in some USB mining using solar and windmills/battery bank(massive 500AH one) on a RV . His idea is to get a 4G net unlimited cell phone connection and just mine for the investment purposes and hobby fun.  I will have to check to see how much bandwidth these miners use, and whether the latency is so poor you miss submiotting your share on pool mining. ?

 I ran a small farm on a junky Virgin Mobile 3G connection for a while - latency wasn't an issue.
 I then ran it for 2 years on an Exede Sat connection - lost less than 1% stale shares due to the inherent 600+ (more commonly around 700) millisecond latency.

[mocacinno]

~snip~
Has anyone looked into more algorithms capable with these SHA-256 only engines?
~snip~

That's a contradiction... Like you said, it's a sha256d only "engine". The real word is : it's an ASIC, an application-specific integrated circuit, as in "it can only do one specific thing".
In this case, it can create sha256d hashes, the only other thing it can do is be used as a spaceheater.

You can, however, mine other coins whose algorithm is sha256d, like, for example peercoin or BCH.