How to Mine Bitcoin SV In 2021
A blockchain network such as Bitcoin SV is secured by participants called miners. They maintain the network by not only securing the decentralised ledger but also adding in newly-minted coins which are issued as mining rewards. This helps the BSV economy to function healthily.
Bitcoin SV uses SHA-256 data encryption and that means the miners have to solve complex mathematical puzzles using their available computing power. Miners can earn these through either solo mining or by joining pools. If you want to mine your own Bitcoin SV, this tutorial is the perfect guide.
Breaking Down Bitcoin SV Mining
This section will explain in detail the basics you need to know for Bitcoin SV mining. Once you have an idea, you can proceed to set up your own mining operation.
What is Bitcoin SV Mining?
Bitcoin SV is a digital currency that is an alternative to traditional money, commonly called ‘fiat’. BSV makes a few changes to how money is handled, effectively giving its users complete power over their finances.
In traditional monetary systems, the currency is created and distributed through government-operated organisations called Central Banks (the Federal Reserve, for example, issues United States Dollars). The money you earn and spend is handled by banking institutions, which maintain ledgers on all accounts. Since these institutes are the ones handling the money, they have control over your economic life.
The printing of new money by central authorities can drastically devalue the circulating money, eroding your wealth. At the same time, your inflated money is also at the mercy of the bank with whom you have your account. They can decide how you can use it, and whether you can use it at all, sometimes denying services to certain merchants, limiting how much you can withdraw, and even freezing your account. On top of it, they charge you for the pretence of safeguarding your money!
As a cryptocurrency, Bitcoin SV has no banks or issuing authority. The transactions are noted down on one single ledger by miners, each one retaining the complete copy of it. The miners have to validate transactions through a process called Proof of Work (PoW), where they compete using computing power to solve mathematical problems, which is called mining. Each successful mining procedure creates a block containing a validated set of transactions, which are then copied by other miners. The efforts of miners result in a block reward: newly minted BSV tokens are granted to the miner that solves the equations first.
Why Bitcoin SV Miners are Important?
Each transaction made with Bitcoin SV must be validated before being written on the blockchain. This is to ensure that no user can spend their coins twice. If this is not done, a user could make a transaction that is not written on the books, giving them the chance to use the already spent coins again. This is called the “double-spend” problem, and miners play a crucial part in solving it. With each transaction written to a ledger that is validated and then held by all miners, fraudulent activity is virtually impossible.
Transactions are bundled together into groups, called blocks, which are then written on the ledger through a process called ‘hashing’, whereby data is cryptographically coded into ‘hashes’. ‘Hashpower’ refers to the power of a computer to solve these hashes and thus validate a block. ‘Hashrate’ refers to the number of hashing calculations that can be made by a computer in a given time, but it can also describe the combined power of all the machines on the network..
The hashrate shows how many calculations are being done by the miners, showing the security of the network. Like its parent network Bitcoin Cash, Bitcoin SV has an average block production time of 10 minutes. To maintain this time, BSV’s code adjusts the difficulty of the puzzles, increasing it as more computing power is dedicated to the network and reducing it when miners leave.
As the backbone of the Bitcoin SV network, miners are compensated for their efforts through block rewards; otherwise, they would have no reason to secure the chain, as PoW carries huge electrical costs. Currently, each block reward is 6.25 BSV.
Bitcoin SV Mining Limitations
A fork of Bitcoin Cash (which was itself a fork of the original Bitcoin chain), BSV also uses a deflationary model and has only 21 million coins that can ever be created. In late 2018, Bitcoin Cash went through a split, called a fork, as miners disagreed on how to scale the system. Bitcoin Cash had already increased the block size to 32 MB from Bitcoin’s 1MB and a camp within the BCH community wanted to increase it further to 128 MB. The resultant infighting led to BCH forking again, with the larger block size advocate group naming its version Bitcoin Satoshi’s Vision, reflecting how it wanted to keep to the principles of Satoshi Nakamoto, the elusive creator of the original Bitcoin.
Apart from the block size, the main aspects remain the same, such as the SHA-256 hashing algorithm, 10-minute block size, halving schedule, and adjustable difficulty. These combine to produce limitations on the BSV network. The mining difficulty increases and decreases in response to miners joining or leaving the network, in order to maintain a constant block time.
Tip to Mine Bitcoin SV Efficiently for Greater Profits“ Now that you know what role miners play in securing and sustaining Bitcoin SV, you may want to start your mining operation. There is more to mining than just that, however. The computing power dedicated to the network is just a tad under 580 PH/s — that’s 580 quadrillion hashes per second. Considering this enormous hashrate, you will find it difficult to generate profits if you want to mine on your own using only one or two machines. The electricity costs would be far too high and the chance of mining a block successfully would be close to nil. If you actually want to run in the green, you will need to either join a mining pool or opt for a cloud mining solution. ”- Saad Ullah
Technical Aspects of Mining Bitcoin SV
Before you decide on what type of mining method you want to go for, you must understand the concept of hashrate and how it affects your decisions.
Hashrate Simplified for Bitcoin SV
- What Does Hashrate Mean?
Hashrate is defined as the number of calculations miners can do per second. The higher the hashrate of a miner, the more calculations they can attempt. The combined hashrate of miners is the network’s total hashrate.
- Why is a Higher Hasrate Important?
A higher hashrate for your mining will mean you can perform more attempts at solving the problems and therefore will have higher chances of validating a new block first. As more and more miners with powerful machines join the Bitcoin SV network, the total hashrate of the ecosystem also rises. To ensure that blocks are not mined faster than intended, the puzzles get more complex to compensate.
At the same time, the hashrate also shows how secure the BSV network is. As a decentralised network, an attacker would need combined mining power of at least 51% to hijack the blockchain. The higher the hashrate, the more difficult it is to take over the network, as the logistics of procuring such a high hashrate become impractical.
- How is Hashrate Measured?
Hashrates are measured in the number of hashes per second. Usually, the units used are kilohashes/s, megahashes/s, terahashes/s and so on. Bitcoin SV currently runs at around 580 petahashes/s.
Processing Power: CPU & GPU
The number-crunching for finding the blocks is done by computers and at their core is the processor, or CPU. In the early days of the original Bitcoin, there weren’t many miners and it was possible to find blocks using normal laptops and PCs. Later on, people discovered that their GPUs were much more powerful, and they quickly shifted over.
Field Programmable Gate Arrays (FPGAs) were later deployed, with the components fine-tuned towards mining yielding much higher hashrates. The latest machines are called ASICs, or Application-Specific Integrated Circuits, which are manufactured for the sole purpose of mining.
The BSV network was forked during November 2018 when the use of ASICs was common, meaning the hashrate has never dropped below the petahash range. Accordingly, the only viable hardware solutions for mining are ASICs.
Hashrate Needed to Mine Bitcoin SV Profitably
Today, the Bitcoin SV network has a combined power of a little below 580 PH/S. Considering normal CPUs and GPUs can never exceed a few hundred MH/S, and FPGAs clocking in at only a few GH/S, ASICs that can operate in the terahash region are the only viable option.
Even then, standalone ASICs (or even combining a couple of them) are not enough to give you a good chance at finding a block first. To make it effective, you will need to join a mining pool or forego getting your hands on a machine and rent out one using cloud mining. This doesn’t mean that lesser-powered machines cannot take part. The odds of solving the calculations before their mightier counterparts are just too low to give you any chance of claiming the block rewards.
Pros and Cons of Mining Bitcoin SV
DIY Bitcoin SV Mining - How to Get Started
With an understanding of what mining is, its importance, and the role of hashrates, you are armed with enough information to start mining. Then again, you should read on to get an idea of what kind of ASIC will be most suitable for your mining endeavours.
Best Mining Hardware for Bitcoin SV
There are a number of different ASICs available in the market that you can buy and set up for mining Bitcoin SV. The general rule of thumb is the more powerful ASIC miner, the more hashpower it has, and therefore gives you a greater chance of being first to solve the hash puzzles and claim the block reward. We understand that several economical and financial aspects can affect your decision. To make it easier for you, we have looked up some ASIC miners that might interest you.
The Antminer T9+ is an entry-level ASIC miner (compared to the latest ones) and is perfect for people who want to join mining pools without incurring huge costs. The T9+ is a compact machine that also has the benefit of being able to be interconnected with other T9+ units in a modular fashion to create a single, powerful mining rig, or even a farm. Producing 3.5 TH/S, it can be bought for around $650 from Amazon.
Another popular choice of pro miners is the DragonMint T1 by Halong Mining. It was the first of its kind to use advanced chip manufacturing processes to allow for cramming in even more computing power, topping out at 16 TH/s and having far lower electrical costs than its rivals. The DragonMint T1 is tagged at $2,729.
Bitmain is the largest ASIC manufacturer in the world and is famous for staying ahead of the competition. If you have deep pockets, you can check out their Antminer S19 and S19 Pro models. The base model pumps out 95 TH/s and its more powerful cousin can push as high as 110 TH/s. An S19 Pro machine will set you back a hefty $3,769.
Other Costs to be Considered
Mining is more than just getting the best hardware your budget can afford. There are numerous other aspects and costs that you must factor in before deciding to get your hands on an ASIC.
All of the ASIC miners come without power supplies, so you will need to contact the manufacturer for one of these too. This will likely set you back an average of $150 per machine.
The ongoing cost of electricity is also important. Each company and locality will have their own rates. China is one of the cheapest regions for electricity, and that’s the reason most of the mining (some estimates suggest 75%) is being done there. Your choice of housing also comes into play. Though ASIC miners come with cooling units, you might need to invest in larger fans and even air conditioning if you live in a warmer climate. All of these factors add to your running costs and can eat up your profits - even running you into losses.
All you need now is to connect your mining rigs to a computer that runs the mining software. There are many mining software options available on the internet today. Using the same SHA-256 algorithm as Bitcoin and Bitcoin Cash, miners can use the same software for all three of these coins.
CGMiner is one of the best available today. It offers remote access so you can let your ASIC miners run on their own and go about your business and activities. It also has a new block detection feature that helps you quickly shift over to another set of calculations when a rival mines a block first.
RPC Miner is the go-to choice for Mac users as it comes with built-in support for macOS. BTCMiner is a good choice if you don’t want to spend money as it is freeware and even supports FPGAs.
If you are intending to join a mining pool, consider a few other things such as their size and payout. You can find a number of BSV mining pools such as SVPool and MemPool where you can register and follow their easy instructions on how to connect your ASIC miner to their network.
Mining pools offer the great advantage of collective hashpower. Collaborating, pool members can have their machines run as one and the hashrate can rise to a level where it is feasible for blocks to be mined successfully. The downside to the mining solutions is that since you are only adding in a certain portion of the total hashpower, the rewards you get are diluted.
Mining pools have a few different payout methods, each one with its own pros and cons:
- Pay Per Share: PPS pools offer you periodic rewards, no matter if the pool actually mines a block or not. You gain a fixed income based on your contribution but at the cost of not getting any individual block rewards.
- Full Pay Per Share: FPPS offer the same steady stream of income as PPS and throws in earned transaction fees. However, the regular payout is lower than that of PPS and block rewards are still not paid.
- Pay Per Last N Share: Some mining pools only offer rewards if a block is actually mined, through a PPLNS payment plan. Transaction fees are not shared. The higher risk of not getting paid is somewhat countered with the greater payout if a block is indeed found.
Connecting with mining pools is easy. All you have to do is find the one you prefer and follow their instructions on how to connect your mining software to their servers.
For many people, buying ASIC miners, setting them up, matching power supplies, and the other attendant hassles can be too much of a pain. The investment and running cost can also be out of reach. These people can still play their role as miners by signing up for cloud mining. It is just like a mining pool but instead of you buying and connecting your mining rigs, you rent out a mining machine from another person. All you have to do is to buy a contract that stipulates how much the rent is going to be, the total time duration, the hashrate you get, and estimated payouts. You buy the contract and someone else does the mining for you.
Before selecting cloud mining, do compare the long term costs of both mining pools and cloud mining. Cloud mining does away with the heavy initial investments but the rent can at times be high enough that over the course of a year or two, you end up paying much more than if you bought the hardware yourself. We advise you to use a good BSV profitability calculator to base your decisions on.
You can check out IQMining for their cloud mining services. They have several packages, with durations from 1 year to continual ones. You can define the hashrate you want to buy and their calculator shows you the complete details of what you will get, including the price, maintenance and pool fee, any bonuses, and the estimated forecast so you can make your choice easily.
CryptoStar also offers BSV cloud mining and you can start from as low as $1.4 for 20 GH/S. They also have a profitability calculator that allows you to see if your rent will give you any profits. Before joining any cloud mining service, make sure you do plenty of research. Scammers abound in this corner of the crypto industry, and you must be very careful not to join a fraudulent operation. Trustpilot will often give you a good idea of whether a company is trustworthy or not.
Where to Save my Coins After Mining?
Your mining payouts must be stored in a BSV compatible wallet. This will ensure their security and make sure that your hard-earned coins aren’t taken from you by hackers. Software wallets make a great choice for those who need easy access for regular transactions, whereas hardware wallets offer the highest level of security for ‘cold storage’ of coins.
There are plenty of options available and your intentions with the mined coins can largely influence your decision. Following are a few of the best Bitcoin SV wallets to store your earnings.