How to Mine Bitcoin Gold In 2021
Mining is the process that mints new Bitcoin Gold (BTG) tokens, adding them to the Bitcoin Gold ecosystem. Mining is also responsible for validating transactions conducted on the blockchain, and at the same time, securing the network against bad actors. This makes mining critical for the survival of Bitcoin Gold, as the absence of miners will cause the whole system to collapse. Mining of Bitcoin Gold can be done either alone or as part of a pool, where miners work together to earn BTG.
Breaking Down Bitcoin Gold Mining
As you read on, you will learn what mining is all about, and the central role it plays in the cryptocurrency’s existence.
What is Bitcoin Gold Mining?
Traditional forms of financial systems have banks that act as middlemen, helping two parties conduct transactions. As custodians of the data, they are responsible for updating ledgers, or records, giving them authority over their users. This can lead to abuse of power, and history is riddled with examples of banks mismanaging clients’ funds and even putting restrictions on monetary movement — even freezing accounts and leaving people stranded.
On the Bitcoin Gold network, there are no banks, and the ledgers are kept updated through miners, who validate all transactions. To ensure no single entity rises amongst the miners, BTG is open to all participants to attempt transaction validations. All they need to do is use their computers to resolve puzzles. This free-for-all method means the miner who solves the equation first gains the right to append the transactions in a group, called a block. Miners are compensated for their efforts through block rewards, issued as Bitcoin Gold tokens.
Why Bitcoin Gold Miners are Important?
As validators of transactions, miners keep the digital currency’s ledgers updated accurately. Through timely updating and broadcasting of the information on the Bitcoin Gold network, they ensure that wallets are debited and credited so that no one can spend their coins twice. This is called the “double-spend problem”, and before Satoshi Nakamoto’s brilliant concept of blockchains, it foiled all previous attempts at creating a functional digital currency.
Using game theory models, Bitcoin Gold, like its original blockchain, requires miners to spend computing power to solve mathematical equations in order to validate transactions. In return, they are incentivised with block rewards, giving them a reason to keep doing their work. The computing power dedicated to the network is measured in ‘hashes’, and as more miners join the network, Bitcoin Gold increases the difficulty of the validation puzzles to ensure competition and the health of the system.
Bitcoin Gold Mining Limitations
Bitcoin Gold is a hard fork of Bitcoin’s code, and it broke from its parent blockchain in October 2017. A group of BTC miners initiated the split, believing that the extremely high hashrate of the original chain was detrimental to decentralisation, as only wealthy miners with access to expensive and powerful machines could take part, creating a new class of ‘elites’. The Bitcoin blockchain uses the energy-intensive SHA-256 Proof of Work (PoW) algorithm, whereas Bitcoin Gold uses the ASIC-resistant Equihash, giving mining abilities back to small participants who can use their GPUs.
The technical block aspects are the same as Bitcoin, with a block time of 10 minutes, the current reward at 6.25 BTG, and a maximum supply of 21 million coins. The limited coins and the block reward play a crucial role in creating value. Roughly after every four years, the block rewards fall by 50% in an event called the “halving”. Increased adoption over time puts pressure on demand, while the halving of issuance creates a supply shock. The basic economic rule of supply and demand comes into play and drives up the value.
At the same time, as more miners join the network in an attempt to gain the valued block rewards, the Bitcoin Gold coding adapts the computations required for the blocks, increasing in difficulty to promote healthy competition between miners. The adaptation works both ways, and if miners leave the network, the difficulty is reduced to keep the block time the same.
Tip to Mine Bitcoin Gold Efficiently for Greater Profits“ Considering that Bitcoin Gold is a fork of the original Bitcoin blockchain, and has changed its Proof of Work algorithm to make it impossible to use dedicated mining machines such as FPGAs and ASICs, you would be better off using a powerful graphics card, or GPU, to mine BTG efficiently. Stand-alone mining is possible and can result in good profits if enough blocks are consistently mined, but miners today have formed pools, combining their GPU power. It would be prudent to join a mining pool or cloud mining service for greater profits. ”
Technical Aspects of Mining Bitcoin Gold Explained
Before you decide to use your GPU to start mining BTG, you should understand a few technicalities of mining, such as the hashrate and what happens when it increases, including the hardware required. In this section, we will cover these points in more detail.
Hashrate Simplified for Bitcoin Gold
- What does hashrate mean?
In simple terms, a hash is a cryptographic puzzle presented by the Bitcoin Gold network, and hashrate, therefore, measures the number of these puzzles that can be solved in a given amount of time. The combined hashrates of miners make up the total BTG hashrate, which can be interpreted as the network security too.
- Why is a higher hashrate important?
Miners with higher hashrates have more chances of mining a block than others. As the entire hashrate of a blockchain increases, the coding adapts the difficulty levels of the equations that must be solved, making it harder to mine. This keeps the time it takes to mine each block constant.
With a higher hashrate, it becomes difficult to execute a 51% attack and take over the Bitcoin Gold blockchain. An attacker must control 51% of the network’s hashpower in order to control the chain. With a high hashrate, this becomes increasingly impractical and expensive to achieve due to hardware costs, thus securing the network.
- How is hashrate measured?
Hashrate is measured as the number of hashes done every second. Normally the units used are kilohashes/s, megahashes/s, gigahashes/s and so forth. As a fork of Bitcoin, Bitcoin Gold is a relatively smaller network, and the Equihash PoW algorithm means weaker devices (GPUs) are deployed instead of number-crunching ASICs. Therefore the BTG network’s hashrate is measured in the MH/s range.
Processing Power: CPU and GPU
Since Bitcoin Gold works on the Proof of Work principle, it requires miners to use their computers to perform calculations and present the right answer to claim a block. A higher computing power means a higher hashrate for the miner.
The early days of Bitcoin had seen miners using their CPUs to solve the block problems, but they quickly realised that their GPUs were more tuned towards mining and jumped to their graphic cards. Later on, miners started getting their hands on Field Programmable Gate Arrays (FPGAs), which are devices that can be altered to the requirements of the user. These were eventually followed by ASICs: Application-Specific Integrated Circuits. These high-power machines are geared towards using all of their computing abilities for mining.
Some miners believed that the use of FPGAs and ASICs deviated from the intentions of Satoshi Nakamoto, as the general public wasn’t capable of mining anymore. The Bitcoin Gold fork introduced a new PoW algorithm, Equihash, which makes mining using these advanced machines obsolete. Today, BTG is minable using GPUs, giving power back to the public.
Hashrate needed to mine Bitcoin Gold profitably
Without the ability to use their ASICs and other advanced machines, miners have not generally been in favour of Bitcoin Gold, and the relatively low power of GPUs means that the hashrate isn’t that high. The BTG hashrate is roughly 1.133 MH/s as of writing.
With GPUs ranging from 100 to 700 H/s in power, using standalone mining rigs isn’t possible unless multiple devices are connected to work in tandem. Even then, profits are not guaranteed, as pools exist that see hundreds of miners coming together to solve the equations. You would need power in the upper regions of kilohashes per second to be effective.
Pros and Cons of Mining Bitcoin Gold
DIY Bitcoin Gold Mining - How to Get Started
We will now explain how to set up your mining operation on the Bitcoin Gold network. Here, you will learn about the different kinds of hardware, relevant software, and other important details.
Best Mining Hardware for Bitcoin Gold
Even with the Equihash PoW algorithm for BTG and the network’s low hashrate, it is very difficult to solo mine profitably. Though it is possible, you will need to invest in multiple top-of-the-line GPUs to stand a chance of getting a block reward. You can always opt for joining a pool to gain more consistent profits.
If you are interested in getting your own mining rig, you should check out our selection of GPUs.
The NVIDIA GeForce GTX1060 is a perfect device for entry-level miners. Though not the best device for mining, it is perhaps the most efficient. The device is compact and is clocked at around 1600 MHz, making it suitable for people who want to mine BTG but don’t want to commit serious power. The device only draws 120Wh and is in such demand that it can be difficult to find one. The 1060 can cost as little as $300.
If you want relatively good hash power but have a constrained budget, perhaps the AMD Radeon RX580 is what you should look for. AMD is famous for its quality hardware devices, and the RX580 doesn’t disappoint. A few minor adjustments here and there in the settings and you can get as much as 29 MH/s from this card for just $50 more than what you would pay for the GTX1060.
If you have cheap electricity, you can go for the top-end NVIDIA GeForce GTX 1080 Ti. The GPU can go as high as 32.3 MH/s but consumes 250 Wh. This makes it a good choice only if you have low utility rates; otherwise, the electrical bill will quickly eat into your profits. The price tag also reflects the power, coming in at $860.
Other Costs to be Considered
Of course, the GPUs are not stand-alone units, and you will need to invest in proper computer systems that have compatible motherboards, hard disks, processors, and so on. These can set you back a few hundred dollars too.
Your utility provider will have a big role to play in your profits. Cheaper electricity, of course, means cheaper bills. Then there is the cooling cost. These devices can generate a lot of heat, especially if you connect a few of them to combine their hashrate. There are even stories of miners siphoning off the heat from their GPU rigs to warm up their greenhouse!
With your hardware all set and ready to run, all you need is to download the right mining software. But before you do that, don’t forget to create your Bitcoin Gold wallet. Since the rewards will be paid out in BTG, you will need to provide the mining software with a valid wallet address.
You have a wide variety of mining software packages that support the Equihash Proof of Work algorithm, the most popular being MinerGate and GMiner. You can download the software and install it on your computer. The mining software will detect your GPU device and run the algorithm needed to mine BTG.
You can always increase your chances of profits by signing up with a mining pool. Gathering hashrates of miners spread across the globe, these pools have a much higher chance at claiming the block rewards. You can check out 2Miners and MinerGate if you are interested in pool mining.
As mentioned above, pools are a good way of increasing your mining earnings. By combining the hardware power of multiple machines, pools allow you to get ahead in the game and compete with the big players. Pools do have some drawbacks, however.
First of all, since you are not the only one who will lay a claim on the newly found block, all participants of the pool will receive a share of the rewards that are earned. Your share of the rewards is calculated based on your hashrate contribution to the pool. Thus, though pooling will guarantee higher chances of a payout, the sum will be significantly diluted and may not be enough to cover the running costs of your rigs. Remember, a larger pool will have more likelihood of block reward claim but will lower your payout, as you will have a smaller share of the pool. Some pools even mine multiple coins, meaning you can earn from more than just BTG.
Check out their payment structure too. There are usually four different ways mining pools let you make profits. Pay Per Share (PPS) is a straightforward method where pools pay out a fixed amount, regardless of the team mining a block or not. The payment is low, but since you are not at risk, this is a good way to ensure a steady stream of income for many miners. A variation, called Full Pay Per Share (FPPS), works on the same principle but adds transaction fees paid to the miners onto block rewards.
Another method of payment, Pay Per Last N Share (PPLNS), is a complex method of determining your share of the rewards, which are only paid out if a block is mined. This means that sometimes you will receive nothing, but when a block is successfully mined by the pool, you will earn a larger reward.
MinerGate is a popular Bitcoin Gold pool. You can simply register on the platform and connect your mining software using the server URL provided. Easy to connect, MinerGate uses the Pay Per Last N Share model and will charge you a 1% pool fee. 2Miners is another BTG-supported pool that uses the same PPLNS model. Connecting to the pool is a bit more complex as it requires you to alter your GPU’s BAT file. Luckily for the uninitiated, they have a complete tutorial on how to go about it, including a video.
If you find that buying and running a mining operation is just not your cup of tea, you can always check out cloud mining. Renting out the GPU power of others using an online marketplace, you don’t invest in the hardware itself, and somebody else does the mining on your behalf. Though you save a lot on costs, cloud mining does cost you, and you may end up paying over the odds in the long run. You should look up a good profitability calculator and compare it to see which one will suit you best.
MiningRigRentals is a good place to start cloud mining. They have an extensive marketplace where you can prospect miners who are willing to rent out their computing power. The marketplace has detailed information, such as the hashrate you will get, the price per day, and the minimum and maximum number of hours you can rent it out. Payments are accepted in BTC, ETH, LTC, and BCH.
NiceHash also offers good rates, with different markets sectioned according to their geographical locations. You can check out the different renting options and view the speed dedicated for the contract, including the number of miners in the cloud pool, the maximum limit you can rent, and the price of the contract.
There are many other platforms offering cloud mining for Bitcoin Gold, but you have to be careful in selecting these. The payment is always upfront, and unless the service is reliable, the chance of scammers running away with your money is high. Checking Trustpilot reviews can help to protect you against scammers and fraudsters.
Where to Save my Coins After Mining?
It doesn’t matter if you do your BTG mining solo, through a pool, or in the cloud — you will need a place to store your earnings. Each service or software package will ask you for your wallet address for the payouts, so you should set up one first.
Depending on what you want to do with your BTG, you can set up a wallet on a crypto exchange (for trading or liquidating), use a mobile wallet (for ease of access and usability), or purchase a hardware wallet (for long-term, secure storage of your coins).
Below is a selection of the best Bitcoin Gold wallets for you to decide on which one you should set up in order to secure your mining operation comprehensively.