This article will help you understand the different terms you see regularly, be it here on Cryptos-mining, on mining pools, compare profitability or simply on the internet via various forums.
Defining a RIG
By making a very simple definition, a RIG is all the components of a computer but without its casing.
This only remains a computer simply, nothing more (or almost) nothing less then no panic.
In the image below we can observe a PC used for mining.
We can remove the case from this PC, build a support and this one will have the name of RIG, that’s all.
A support (wood, aluminum, other) allows for greater aeration as your graphic card (s) heat up and it is essential to have cards that remain as cold as possible as they rotate continuously 24/7 Especially for the life expectancy of these.
A RIG is made up of this:
- A motherboard (CM or MB for motherboard)
- One or more graphics cards but not any (GPU)
- A processor (CPU)
- A hard drive (HDD or SSD) or USB key (Linux)
- A support (wood, aluminium for example)
- A power supply (PSU) or several
- of risers
- Keyboard, mouse, screen needed when first configuring and installing Windows or Linux.
So it’s a computer, the risers simply serve as extensions so that you don’t plug the graphics cards directly onto the motherboard if we use a support rather than a box.
One last little picture?
Rather than making a custom definition of medium quality, we prefer to quote you an easy to understand definition, no need to copy what already exists on the Internet.
The blockchain (whose French translation is block chain) is a technology that allows to store and transmit information in a transparent, secure and without central control body. It looks like a large database that contains the history of all the exchanges made between its users since its creation. The blockchain can be used in three ways: for the transfer of assets (currency, securities, shares…), for better traceability of assets and products and to automatically execute contracts (“smart contracts”).
The main feature of the blockchain is its decentralized architecture, i.e. it is not hosted by a single server but by a part of the users. There is no intermediary so that everyone can check the validity of the chain himself. The information contained in the blocks (transactions, property titles, contracts…) is protected by cryptographic processes that prevent users from modifying them retrospectively.
Bitcoin is the most known use case of blockchain. It was created in 2008 by a stranger whose pseudonym is Satoshi Nakamoto. It refers to both a secure and anonymous payment protocol and a crypto-currency. Anyone can access this blockchain (it is public, so open to all) and therefore use Bitcoins. To do this, simply create a virtual wallet, downloadable on the application awnings. Crypto-monnaie allows to buy goods and services and can be exchanged for other currencies.
To see the sequel which is the source of this summary: Net Journal
Definition of Hashrate
The hashrate is a term meaning “power” in the field of mining, it is defined in Hash, KiloHash, MégaHash, GigaHash etc.
The hashrate will therefore be the power that delivers your graphics card and it is estimated differently depending on the crypto-currency you choose to undermine as they do not all use the same algorithm.
Over time we get used to knowing that algorithms are defined like this:
Equihash is estimated in hash or soil
Ethash/Dagger-Hashimoto in Mégahash
Neoscrypt in Kilohash
You can see this on What to Mine or Crypto-coin for a more complete listing.
The hashrate is therefore used to determine a part of your profitability, it is an important value.
Translate mining pool or mining pool
A mining pool is the definition of a team of miners who all work together in order to share the rewards when finding a block by a minor of that pool.
Algorithm → blocks → rewards inside the block → Pool → minors → Exchange/Wallet
The algorithm corresponds for example to Ethash/Dagger-Hashimoto, Equihash, Cryptonight and many others, see our article on this subject which allows to know the list of algorithms and Cryptos-currencies.
Inside this algorithm (= code) There are parameters that indicate the maximum total number of corners possible (example for Bitcoin 21 million of corners), the reward (number of coins) that will give the find of a block.
The developers have made sure to set from how long a block can be found and what reward it will provide.
So the rewards of this block will be shared among all the minors in this pool.
Note: This means that if a pool does not find a block, then there is no reward, so you do not win anything, look at our article dedicated to the mining pool to know how to choose a good mining pool.
Depending on the mining pool, the configurations will be different on your mining software (. bat file), look at the tutorials “How to miner with Nvidia” or “How to undermine with AMD”.
Conclusion: Choose a pool that mine a lot of blocks per hour, so populated, you have an article “List of mining pools” that explains all this.
Definition of solo-mining
Formerly used frequently, today useless or almost unless you have a huge amount of RIGs.
Often used when launching a new crypto-currency, the difficulty will therefore normally be low.
Unfortunately with trading platforms like NiceHash, the difficulty is already very high even when launching the new crypto-currency.
The solo-mining is possible on the following algorithms as they are ASIC resistant but also Nicehash resistant:
Definition of difficulty
It is very easy and at the same time difficult to understand what the difficulty in mining means.
There are 2 types of difficulties, the overall difficulty and the visible difficulty on the mining pool on your workers.
To make a quick summary of the difficulty of the mining pool, this may be different depending on the available ports.
This difficulty will be important to define if you have the possibility depending on the hashrate you own because you will have two choices:
- Low difficulty = Lots of shares but a low value
- Difficulty High = few shares but a higher value
This difficulty above is usually automatic, in some cases you have a choice.
The overall difficulty in mining is to make simple the number of miners who undermine the same crypto-currency.
The more minors there are, the greater the difficulty rises (= Hashrate global), if the difficulty rises, we gain less.
- A miner when he goes to the mine to look for gold, he will have to dig deeper over time so it becomes difficult, same thing in the digital age.
- Bitcoin in its infancy could be undermined with a basic PC and providing huge rewards but low value (few minors, very low difficulty), plus they did not exist ASIC material at this time.
Today the mining of Bitcoin is impossible by being profitable.
- The Ethereum in its early years reported a lot of corners with very little hardware (GPU), same thing.
On the other hand, the value of its two crypt-currencies were very insignificant, so you had a substantial number of corners but the value was very low.
Here is a graph about the crypto-monnaie ZenCash (Equihash algorithm) that has had a very significant increase in difficulty in very short time following a pump (increase in value) crypto-currency:
The difficulty has skyrocketed very quickly and profitability has greatly diminished following this, see graph below:
Conclusion: The more minors, the more difficulty rises and profitability decreases, the reason is simple:
As long as you earn more than you spend, it’s profitable, it still comes back to the most important electricity cost.
Note: Here is a small list of countries (or States) whose cost of electricity is not expensive:
Washington, Ukraine, Russia, Albania, Serbia, Kosovo, Venezuela… In short the list is long and all regions (and states) do not pay the same price.
This kind of country is very interesting to undermine, so many investors make mining farms very important, as long as the cost of electricity is lower than the gain, it is profitable.
The purchase of new graphics cards is therefore massed every day and it increases the difficulty.
The difficulty is only to go up over time, there are more and more minors and that is normal.
This difficulty is shared/divided between all the Cryptos in PoW (Proof of Work) ie possible to undermine.
To the writing of its lines we can observe this difficulty on the Ethereum for example: There is an “explorer” for each crypto-currency in order to follow the evolution of the difficulty and the list of transactions made.
On the image above we can therefore observe the evolution of the difficulty of mining on the crypto-currency Ethereum.
To know the difficulty of the crypto-currency you choose just write on Google “difficult Ethereum” for example.
Each crypto-currency has an official “explorer”.
Coinwarz.com is a website that also allows you to see this.
Small aside: What to Mine also allows to see this but there is a slight delay it is not instantaneous.
To fully understand what the difficulty means and staying on the example of the Ethereum:
-At the time of the launch of the crypto-monnaie Ethereum, it was possible to mine many ethers very quickly with an insignificant hashrate as we saw above but its value was less than $1 for 1 ether whereas today 1 ether Equivalent to $518 when writing its lines.
So we can say that the people who mined the Ethereum at the launch and have not sold anything are therefore very rich today and this case also applies to Bitcoin.
You may have heard of this on TV or in the newspaper, people have become rich thanks to Bitcoin and it is true but the opposite also concerning those who bought too high ($20000) and who have lost immensely.
This is one reason why you will often see minors who undermine crypts-currencies not profitable because the difficulty is low, they make a bet on the future by saying that it is interesting to amass a certain amount of corners and keep them Several months/years in the hope that its value increases.
We do not recommend this of course and the reason is simple and logical:
-Undermine the most profitable crypto-currency: If you want a large number of corners of a crypto-currency in particular to keep this several months or years you simply undermine the most profitable crypto-currency and sell (swap) this in Bitcoin Then to buy the crypto-currency that you wish on the long run, it’s much more profitable.
Definition of Exchange platform or exchange
A mining pool is associated with your Exchange platform in relation to the deposit address that will be required to make transfers from the mining pool to your Exchange platform (Exchange in English) or with your local wallet (wallet), That is to say that your wallet address will be either given by your Exchange platform, or by your local wallet, it is a software to install on your personal PC that comes from the crypto-currency that you mine.
The mining pool will make the transfer of your corners either:
-On the Exchange platform because you have indicated the deposit address of it
-on your local wallet because you have indicated the address of it.
The local portfolio list can become very quickly important if you mine different Cryptos-currencies over time as this represents 1 software for 1 (one) crypto-currency, make a file before by putting 1 software per file for you there Easier to find and be organized.
A trading platform or market place (or exchange) is used to exchange your crypt-currencies in Bitcoin or other (s), you can buy and sell them.
Example: You are undermining the Ethereum, so you have Ethereum and you can exchange your ethers for Bitcoin, just as you can exchange this in bitcoin and buy another crypto-currency.
Some trading platforms allow you to make deposits directly in euro via your bank account as well as to make the withdrawal in euro also in your bank account:
Remember to check on which Exchange platform your crypto-currency is referenced, the ZenCash for example is on the Exchange platform Bittrex, Cryptopia but not Poloniex and Kraken and others.
To know this, don’t forget to read our article about it here.
For Exchange platforms, we recommend that you enable 2FA protection, it is a security generated with Google Authentificator that gives a code every X seconds that only you can indicate thanks to your smartphone (but also PC).
Nevertheless 2FA protection is not a guarantee against hacking the exchange platform itself, the best security will always be to leave this on a local wallet IE your PC or then on a wallet hardware = physical (type Ledger).
Never leave a number of important corners directly on the swap platform.
It is possible to make shipments from your local wallet to the exchange platform and this in a very quick way.
Small precision: Nicehash is not a pool, it is an exchange, you can undermine Cryptos-currencies via Nicehash by renting your computing power.
So buyers will buy your computing power and you sell it to Nicehash, so you will be paid in Bitcoin no matter what you mine.
If you have any questions, if you think it is missing something important to add or correct do not hesitate to write a comment.