Is Ergo Mining Worth it? Uncovering Ergo's Mining Process

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TLDR:

Ergo (ERG), launched in 2019, uses the unique Autolykos Proof of Work (PoW) consensus protocol to be ASIC-resistant.

The article outlines the process of setting up Ergo mining, which involves selecting a suitable GPU, building a mining rig, creating an Ergo wallet, joining a mining pool, and choosing mining software.

It also provides an overview of the Ergo tokenomics, network stats, and details on the factors that affect mining rewards.

Factors that affect Ergo mining rewards include initial setup costs, electricity costs, ERG price volatility, software and hardware configuration, and hardware maintenance and repair costs.

Based on a hypothetical scenario, Ergo mining is profitable if electricity costs are below $0.08/kWh. Even then, there may be doubts if it’s worthwhile. Therefore aspiring crypto miners are urged to thoroughly consider all factors before proceeding.

Introduction to Ergo Mining

This article briefly introduces you to the Ergo (ERG) cryptocurrency. Next, the article will guide you through the Ergo coin mining process. The article assumes you know the basics of cryptocurrencies, blockchains, and how crypto mining works.

Ergo(ERG) is a cryptocurrency launched in 2019, with no ICO, pre-mined tokens, or pre-allocated tokens to team members and VCs.

According to Ergo’s whitepaper, every ERG token is protected by the Sigma cryptographic protocol and uses a scripting language called ErgoScript. Using ErgoScript enables users to create smart contracts on the Ergo blockchain.

Ergo uses its own unique Autolykos Proof of Work (PoW) consensus protocol to verify transactions on its blockchain. Moreover, the protocol ensures Autolykos ASIC miner resistance.

Autolykos ASIC miner resistance is important because huge miners dominate blockchain networks like Bitcoin. These miners have access to expensive ASIC mining machines, making mining unviable for the average person.

Therefore, making the Ergo blockchain ASIC-resistant with the Autolykos mining protocol is important to make mining more affordable.

A Brief Overview of Ergo Tokenomics and Network Stats

Various cryptocurrencies by Kanchanara on Unsplash

Before embarking on a cryptocurrency mining journey, you must understand its tokenomics. As of the time of writing, the circulating supply of ERG tokens is around 71.15 million tokens and has a market cap of around $90.5 million.

Next, the network currently handles about 5994 transactions daily and takes 120 seconds on average to add a new block of transactions. Moreover, each ERG block successfully mined rewards with a min payout of 39 ERG tokens.

Finally, the blockchain possesses computational power or a hashrate of 19.39 TH/s.

How to Mine the Ergo Crypto

When learning how to mine Ergo, we start by building a GPU mining rig and setting up an Ergo wallet. Next, we configure the hardware and software for the Ergo mining rig. Finally, we connect the Ergo miners to a mining pool.

Choose a GPU

As Ergo is ASIC-resistant, you must use a graphics card’s GPU to mine Ergo. Suitable GPUs must have a memory of more than 3GB.

Popular graphics cards for mining Ergo include:

Nvidia

Nvidia GPUs by Christian Wiediger on Unsplash

• GTX 1060

• GTX 1660 Ti

• RTX 3060

• RTX 3060 Ti

• RTX 3070

• RTX 3070 Ti

• RTX 3080 Ti

• RTX 3090

AMD

AMD logo by Timothy Dykes on Unsplash

• RX 470

• RX 580

• Radeon 5700 XT

• RX 6600 XT

• RX 6800

• RX 6800 XT

While buying the cheapest GPU is tempting, you must consider the GPU’s cost versus its mining capabilities.

The cheapest GPU may not be powerful enough to generate adequate mining rewards. However, the most expensive GPU may not be worth it for the rewards generated.

LHR and GPU Mining

Due to graphic card shortages, Nvidia GPUs are artificially limited in their crypto-mining capabilities. Hence, Light HashRate (LHR), was introduced in the latest Nvidia drivers to impose this limitation on Nvidia GPUs.

The degree of LHR impact depends on the type of GPU memory and its manufacturer.

When choosing a GPU, tests have shown that Nvidia GPUs with GDDR6 Hynix memory are the most affected by LHR. Therefore, keep this in mind when choosing a suitable Ergo mining GPU.

Building the Best Ergo Miner

A GPU rig by Maxime Rossignol on Unsplash

After choosing your GPUs, you must build a mining rig(basically a PC) to house the GPUs for crypto mining.

Install Windows or Linux as the mining rig’s operating system. Once your mining rig is complete, give it a name, known as a Rig ID, and note it down.

Create an Ergo Wallet

Crypto wallet by Mariia Shalabaieva on Unsplash

You need an Ergo wallet to receive your mining rewards. However, some use centralized exchange addresses, like Ergo mining BINANCE addresses, to cash out quickly and regularly.

If you want to hold ERG longer, it’s highly recommended that you use Ergo wallets, such as the official Ergo wallet app. Once you have your wallet address, note it down for later use.

If you’re considering using a hardware wallet instead, you must note that hardware wallets have issues when used for mining purposes.

Joining a Mining Pool

Imagining a crypto mining pool

Next, you want to join a mining pool. Although solo mining allows you to keep all block rewards, you might go for weeks or months without finding a block to successfully mine.

Joining a mining pool allows you to pool your computing resources with other miners to increase everyone’s chances of getting block rewards.

Mining pool block rewards will be distributed across the mining pool, and everyone will receive a smaller reward.

However, rewards are more likely to be received in a mining pool. Therefore, the average crypto miner benefits by joining a mining pool as they earn smaller mining rewards more frequently.

Popular Ergo coin mining pools include:

• 2miners Ergo pool

• Herominers

• Nanopool

• F2pool

To join a mining pool, visit the mining pool’s website and note down the mining pool’s server address. For example, if we want to use 2miner‘s Ergo USA server, we would note down the address: us-erg.2miners.com:8888

Some mining pools require registering a free account. Therefore, check each mining pool’s website and follow their instructions.

Choosing Your Mining Software

Mining software by ThisisEngineering RAEng on Unsplash

The mining rig requires mining software to begin mining Ergo coins. Installing the best mining software depends on the type of GPU and operating system used in your mining rig.

The top mining software for Ergo miners are:

• NBminer

• Team Red Miner

• SRB Miner

• T-Rex Miner (Has an LHR unlocker to mitigate some LHR impact)

• lolMiner

NBminer is one of the popular Ergo mining software and reviews have shown that it’s good for Nvidia GPUs, while SRB Miner is good for AMD GPUs.

Mining Software Configuration Guide

First, download your chosen mining software archive and extract it. You may have to whitelist the software in your antivirus program, as the antivirus may flag the mining software as a malicious threat.

After extracting, find a configuration file, usually a .bat file or a .cmd file. Open the configuration file in a text editor like Notepad.

NBminer Ergo configuration file

Recall your:

• Rig ID

• Ergo wallet address

• Mining pool’s server address.

Copy and paste the three pieces of information into your mining software configuration file.

Below is an example of how NBminer’s .bat configuration file looks like.

nbminer.exe -a ergo -o stratum+tcp://erg.2miners.com:8888 -u YOUR_WALLET_ADDRESS.RIG_IDpause

In the example above, the mining pool’s server address is added before “-u.” The Ergo wallet address is after the “-u.” Finally, the Rig ID is added behind the Ergo wallet address after a period.

Once you’re done, save the configuration file changes in Notepad. Take note that other mining software’s configuration files are not 100% similar but should follow a similar pattern.

Operating System Tweaks

Windows power options settings

If you’re using a Windows operating system, you must navigate to the Windows Power Settings in Control Panel and set it to Never Sleep.

Next, turn off Windows Update in Control Panel. This is to ensure your miner is not interrupted while mining. Finally, ensure Window’s Virtual Memory, or pagefile, is set to at least 16 GB.

Now you’re ready to run the mining software. Earn Ergo rewards by starting to mine today!

How do I Check My Rewards?

After 24 hours, you can check if your mining setup works by checking your wallet address in the Ergo coin block explorer. There, you can view transactions of mining rewards or the number of coins coming in.

Mining pool Ergo miners stats

Moreover, your Ergo mining pool account dashboard provides a summary report for average mining rewards and hashrates.

Factors Affecting Mining Rewards

Counting profits by Alexander Mils on Unsplash

Finally, we arrived at the fun part. Most miners want to make a profit, so knowing how to estimate mining Ergo profit, is very important. Here are factors that affect your crypto mining profits.

Initial Setup Costs

Initial setup by ThisisEngineering RAEng on Unsplash

The more initial outlay, the longer it takes to break even from mining. Apart from GPU costs, the remaining mining rig parts and the mining environment setup will also incur upfront costs.

As crypto mining rigs produce a lot of heat and noise, crypto miners have to spend money to provide good cooling, ventilation, and soundproofing for their mining rigs.

Electricity Costs

Power Grid by Andrey Metelev on Unsplash

The next factor is a huge one. Electricity costs are the number one factor that eats into profitability. Crypto mining in locations with high energy costs results in unprofitability.

Furthermore, natural disasters or geopolitical conflicts could see energy costs soaring. We could see this happening in Europe during the start of the Ukrainian conflict.

Some miners cut their electricity costs by accessing cheap renewable energy. For example, using waste natural gas from oil production to power crypto mining cheaply is possible.

Apart from accessing cheap renewable energy, cryptocurrency miners often flock to locations with low energy costs. Countries with low average energy costs and decent infrastructure for crypto mining include:

• China at $0.08/kWh
• Malaysia at $0.047/kWh
• Qatar at $0.032/kWh
• Argentina at $0.034/kWh

Ergo Coin Price Volatility

Price volatility by Austin Distel on Unsplash

As an asset class, cryptocurrencies are known to be volatile and high-risk. Ergo coin price is no exception to this. If Ergo’s price drops too low, mining could be unprofitable after factoring in running costs.

Software and Hardware Configuration

The computing power of GPUs largely determines how the number of coins you receive. You can configure a GPU to increase its computing power through a process known as “overclocking.”

However, overclocking may risk potential system instabilities. Moreover, it produces additional heat, which reduces hardware reliability and lifespan. Additionally, overclocking increases electricity consumption.

If the overclocking manages to be stable, you can maximize your GPU’s mining reward potential.

Miners can also squeeze more profits through a hardware configuration called ”undervolting.” Undervolting makes a mining rig work with less electric power.

Undervolting aims to boost mining reward efficiency by reducing electricity costs and decreasing heat generation. However, undervolting could risk introducing potential system instabilities and risk hardware damage.

Finally, the type of mining software used on your hardware configuration could also mean the difference between more or less mining rewards. For example, mining software like NBminer works better on an Nvidia card than SRBminer.

Hardware Maintenance

Hardware maintenance by ThisisEngineering RAEng on Unsplash

Crypto mining rigs generate lots of heat and work for long periods of time under full loads. Therefore, any hardware maintenance and repairs will eat into mining profits.

Is it worth it?: A Hypothetical Mining Scenario

Before you start mining Ergo, you should use an online Ergo mining calculator, like the Whattomine Ergo mining calculator, to help you estimate your crypto-mining rewards.

With entered hashrate, you can estimate mining rewards and profitability. Furthermore, this estimation can be more accurate by entering electric costs, current crypto prices, blockchain mining difficulty, and GPU specs.

In a hypothetical Ergo mining scenario, we assume the average United States electricity cost to be $0.23/kWh. We also assume we have an AMD 5700 XT Ergo mining rig.

In this scenario, we estimate “earning” negative $0.64 every 24 hours. This is due to the high electricity costs in the United States and the current prices of Ergo.

However, by bringing down electricity costs to $0.08/kWh, you can break even. Therefore, assuming all other factors are constant, Ergo mining is only profitable if electricity costs are below $0.08/kWh

Conclusion

In conclusion, Ergo mining is an intriguing and educational venture for cryptocurrency enthusiasts. The Sigma cryptographic protocol protects the ERG token and relies on a unique Autolykos PoW consensus protocol, making the Ergo blockchain ASIC-resistant.

Initial set-up costs and high electricity costs may challenge profitability. Additionally, the choice of mining hardware, mining pool choice, and hardware and software configurations all contribute to the efficiency of earning Ergo mining rewards.

It’s worth noting that Ergo mining involves risks such as Ergo coin price volatility, volatile energy costs, and hardware or software failure.

Ultimately, besides educational purposes, Ergo mining’s worth is doubtful, as it’s only profitable with electricity costs below $0.08/kWh.

FAQ

Is Ergo crypto mining ASIC resistant?

Yes. The Autolykos protocol Ergo uses makes it ASIC-resistant, allowing you to use consumer GPUs for mining.

Is Ergo mining affected by LHR?

Yes, LHR affects Ergo mining. Mining with Nvidia GPUs using GDDR6 Hynix memory is the most impacted by LHR.

The T-Rex mining software has an LHR unlocker to mitigate some LHR impact. However, the software only unlocks up to 80% of the hashrate on GDDR6 Hynix memory GPUs.

Does an RTX 3060 Ti LHR affect mining Ergo and Ravencoin?

LHR affects Ergo and Ravencoin mining. If the RTX 3060 Ti uses GDDR6 Hynix memory, the LHR impact is higher than non-GDDR6 Hynix memory GPUs.

Can you use an Ergo mining CPU rig?

Using a CPU to mine Ergo is possible but not recommended. When comparing hashrates and power consumption, a CPU is less efficient than a GPU to mine Ergo.

You can mine Ergo with your CPU using mining software such as SRBminer.

Can you use a GPU to mine Ergo?

Yes. You must use mining software such as NBminer to use your GPU as an Ergo miner.

What GPU specifications are needed for Ergo mining?

Suitable Ergo mining GPUs must have memory exceeding 3GB. Ideally, if it's an Nvidia GPU, ensure that it doesn't have GDDR6 Hynix memory to reduce LHR’s impact.

Is there an Ergo ASIC Miner?

No. As Ergo uses the Autolykos ASIC miner resistant protocol, there are no Ergominer ASIC machines.