Mining Rig

A mining rig is a computer set up specifically to perform crypto mining. The term covers both home-built frames packed with graphics cards and factory-made boxes built around an Application-Specific Integrated Circuit (ASIC). A rig is judged on three numbers: how many guesses per second it makes (its hashrate), how much electricity it draws, and what it costs to buy and run.

Rigs only make sense on networks that use Proof of Work (PoW). On Bitcoin (BTC) only ASIC machines remain competitive, while graphics-card rigs survive on coins with ASIC resistant algorithms. The people and companies that operate rigs, from hobbyists to listed firms, are covered in Miners.

A mining rig is like a taxi that does nothing but drive in circles to earn a meter fee. What matters is not looks or comfort but how many fares it can rack up per hour and how much fuel it burns doing so. A thirsty old cab can lose money on every trip, while a new hybrid earns a profit on the same route.

The rig's "fuel" is electricity and its "fares" are chances to win newly issued coins. When the fare price (the coin's value) drops, or many new cabs join the road, the least efficient vehicles stop paying for themselves and are parked.

There are three broad kinds:

• GPU rigs. An open frame holding several graphics processing unit (GPU) cards, connected to a basic motherboard through riser cables and fed by one or more large power supplies. GPU rigs are flexible: if one coin becomes unprofitable, the owner can point them at another algorithm. They dominated Ethereum (ETH) mining until the network stopped mining in September 2022.
• ASIC miners. Sealed units, usually with integrated fans or liquid cooling, containing hashing boards built for a single algorithm such as SHA256 or Scrypt. They are far faster and more efficient than GPUs on that algorithm but cannot do anything else.
• CPU setups. Ordinary processors are still used on algorithms designed for them, notably RandomX on Monero; these are often regular servers or desktops rather than dedicated frames.

Since 2013, when the first commercial Bitcoin ASICs shipped, the frame-of-cards rig and the ASIC box have occupied quite separate markets.

Electricity is usually the largest ongoing cost. Daily power cost is:

• $C$ is the daily electricity cost.
• $P$ is the rig's power draw in kilowatts.
• 24 is the number of hours in a day.
• $p$ is the electricity price per kilowatt-hour.

Worked example: an ASIC drawing 3.5 kW at $0.06 per kWh costs $3.5 \times 24 \times 0.06 = 5.04$, about $5.04 a day or roughly $1,840 a year. At $0.15 per kWh the same machine costs $12.60 a day, which is why large operators seek cheap or surplus power.

Revenue depends on the rig's share of network hashrate, the block reward and the coin's price. It falls whenever mining difficulty rises and drops by half for the subsidy portion at each halving. A rig's return on investment (ROI) is therefore a moving target: buyers estimate payback periods, but a price fall or a jump in network hashrate can stretch them out indefinitely. Most small rig owners also join a mining pool to smooth out income.

Rigs turn almost all the electricity they consume into heat and, in the case of ASICs, a great deal of fan noise. Home miners face practical limits on circuit capacity and ventilation. Industrial operators build warehouses with high-airflow designs, immersion tanks filled with non-conductive fluid, or containers placed near power plants, flare-gas sites or hydroelectric dams.

Many owners pay a hosting company to house and run their machines for a monthly fee per kilowatt. This differs from cloud mining: in hosting, the customer owns identifiable physical machines, whereas a cloud-mining customer buys a share of hashpower that it cannot inspect, a model with a long record of fraud. Arrangements to buy a share of output from a mining operator are covered in Mining Contract.

An ASIC's useful life is set less by physical wear than by efficiency: each new generation does more hashes per joule, and when difficulty rises older models stop covering their electricity cost. Some are resold to regions with cheaper power, others are scrapped, adding to electronic waste. GPU rigs have a better resale market because the cards can be used for gaming or other computing, although the Ethereum switch to Proof of Stake (PoS) flooded the market with used cards.

Other risks include fire from overloaded wiring, theft, regulatory changes such as China's 2021 ban on mining, and price swings in the coin being mined. Some miners use a futures contract to lock in a price for future output as a form of hedging. Rigs have also been the target of malware: so-called cryptojacking hijacks other people's computers to mine without permission, typically targeting mineable coins that still work on ordinary processors.

• Bitcoin Developer Guide: Mining
• ethereum.org: Mining (historical)