# Introduksjon

## Introduction

## Basic info

## Introduction

When you want to start mining there are several things you need to take into account. Here we will go through what mining is and the most important things you should think about.

### What is mining?

In short, mining is how new coins of cryptocurrency are created.

Mining is the process of creating new coins by solving extremely complicated mathematical problems that confirm transactions in the currency. When a coin is successfully mined, the worker receives a predetermined amount of coins.

In order for miners to be rewarded with new coins, machines must be deployed that solve these complex mathematical equations in the form of cryptographic hashes.

A hash is an abbreviated digital signature of a quantity of data. Hashes are generated to secure data transmitted on a public network. The miner competes with other peers to reset a hash value generated by a transaction on the network, and the first miner to crack the code gets to add the block and receive the reward.

The degree of difficulty of mining fluctuates according to the market and how much pressure there is on the network. This means that your earnings may vary, and you can never estimate with certainty how much you will earn, only an indication.

The mining process is essential for validating transactions. Miners are therefore incentivized to secure the network by participating in this transaction validation process and getting paid cryptocurrency as a result.

## Basic info

Let´s go through some things that you may want to take into account when buying and choosing the location of a mining rig.

### Power

How much can the circuit in your house withstand, and how many watts does the rig use?

It is important to take into account how many watts the circuit in the house can withstand. The standard rule for not overloading a circuit is to only use up to 80% of the circuit. If you plan to purchase a slightly larger rig, it would be wise to calculate how much power all the components use versus how much power you have available on the circuit where you plan to place the rig. More information about calculating power consumption can be read here.

### Location, location, location

Have you thought about where you want to place the rig? Here are three factors in particular that should come into play:

-Environment

Electrical components thrive best in a dust-free environment and without humidity. High humidity can lead to corrosion on circuit boards and connectors. Therefore ensure good positioning of the rig and good cleaning routines.

-Heat

The machine will be able to generate a lot of heat. For many countries, heat is a negative thing in mining, but we in Norway are lucky enough to be able to use our low temperatures for our purpose.

It is important to ensure good air circulation so that the machine does not overheat. Good heat dissipation can ensure that the rest of the house heats up more and you can save costs on other heating sources.

-Sound

The fans on your rig will quickly make a lot of noise. It may therefore be wise to avoid placement in rooms where you spend a lot of time.

### Choosing your components

It is important to think in advance what type of rig you want. Here there are several things to take into account. It is often a good idea to start with how many and which graphics cards you want . This will set a bit of a standard for the rest of the components you need, such as e.g. how big a frame you must have and how many power supplies you need. Feel free to read our guide on componentsr here.

### Costs

What will it cost you to operate the rig?

To find this out, you must multiply the price you pay per kw/h. This again must be multiplied by how many watts you use.

To easily find out your costs in electricity and profit, you can calculate using NiceHash's calculator here:

### ROI, Return of investment

In how long can you expect your rig(s) to be paid off and you to make a profit?

Here we show how you can find ROI on your rig:

First, let's figure out the costs. If we take an example of 8 pcs. graphics card for 1800 USD per piece. and the rest of the components in the rig cost 1000 USD

8 x 1800 USD

= NOK 14400 USD (Graphics card)

+ NOK 1000 USD (Other components)

= NOK 15400 USD

Our total purchase costs will then be NOK 15400 USD

We move on to calculating earnings per month. Let's say that each individual graphics card can earn approx. 200 per month:

200 x 8 = NOK 1600 USD

We have then found our total earnings per month.

To find out an estimate of how long it will take before the rig is paid off, we divide the total price by monthly earnings:

15400 / 1600 = 9.625

It will therefore take 9.625 months. before the rig has paid off and we have an ROI of 9.6 months.

Note that the electricity price is not calculated in this calculation.

By using Nicehash's calculator, you can easily familiarize yourself with approx. estimated monthly profit on different graphics cards.

It is also important to consider that what you earn from mining moves with the market. E.g. when the cryptocurrency you mine goes down, the profit may be worse, but if the market goes up, you can earn more. What you earn from mining can therefore never be guaranteed. This calculation can give an indication of how long it will take before you have covered your costs and turn a profit.