Let's start by recognizing that miners play an important role to any Proof of Work (PoW) chain, whether they're using ASICs or GPUs. Decentralization is a core idea in cryptocurrency, which is why we often hear "follow the miners." This holds true whether they’re mining with ASICs or GPUs.
Now that BLAKE3 ASICs are here and offer great rewards to those willing to take the risk, it is more important than ever to answer this question: Should you mine ALPH?
Before we start, we need to keep in mind of these few things:
Generally, miners choose to set up their operations on the most profitable chain. For ASIC mining, it used to be KAS, but now ALPH is the most profitable coin to mine, thanks to Bitmain's Antminer AL1. Currently, all attention is on Alephium.
Mining has different demands and requirements compared to building DApps, crypto trading, LP staking, or simply investing in crypto. Understand that miners will have to sell to cover their overhead expenses. Whether they hold the remaining profit or not is their prerogative.
Buying an ASIC, or Application-Specific Integrated Circuit, means you are purchasing an equipment designed specifically for a particular algorithm. Alephium's algorithm is BLAKE3, and these new ASICs released by Goldshell, Bitmain and Ice River are the first-ever BLAKE3 miners to hit the market. This means, if you buy these ASICs, you are either mining ALPH or not mining any coin at all.
Not all ALPH miners are ALPH MAXIS. However, as of now, BLAKE3 ASICs can only mine ALPH, so it is in the miners' best interest to protect their source of income. This could lead to more users, more content creators, and more builders. As they interact with the chain, they will realize how innovative it is, and this could create a snowball effect network-wise. This is also described by Metcalfe's Law.
Now let's dive into the main question:
Should You Mine ALPH?
We are all at different stages in our lives, which means we are also at different financial stages. It is important to know your risk tolerance and understand your current stage. The answer will vary but let me help you decide.
First Barrier: Available Funds
The miner with the most bang for buck is the Ice River's ALPH AL0 which is $799 + $19.90 for the PSU + (shipping fee of $55 to $120 whichever your shipping address is at) + Tax and duties (specific to your country) + Insurance. I would estimate you should have at least $1,200 ready to deploy before getting involved.
Second Barrier: Technical Expertise
Let's assume you can easily invest $12,000 for 10 IR AL0 ASIC Miners. But that's not enough. Do you have the technical skills? Keep in mind that there are many things you need to know before getting into crypto mining.
Do you understand how crypto mining works, its nature, and its cycles?
Do you know basic accounting and have the means to convert those ALPH into your currency to cover for expenses. Do you know how to do it safely?
Do you know how much labour and materials are needed to fully set up a mining space/facility before deploying 10 IR AL0 Miners?
Although crypto mining is mostly "set and forget," and setting up is relatively easy, but you have to understand that once in a while you will experience technical issues. Example: ASIC is mining but low hashrate, it's not connected to the pool, it's not booting, it's turned on but not hashing, what about hearing some unusual noises? Do you know what to do? Yes, these are easily fixed through research but sometimes, it is much easier said than done.
What if your ASIC breaks? Do you know what to do? Are you okay to ship it back and wait for an X amount of time until you can mine again?
Do you even know ALPH? Do you know which wallet to download, how seed phrases work, and how to secure it? Do you now AYIN and how to use native DEXes? And please don't tell me you're going to mine straight to a CEX wallet.
Third Barrier: Mining Facility / Space
Let's assume you are in-the-know and have the expertise. But do you have the space to set up those miners? You might be able to buy 10 Ice River AL0 Miners, but do ask these questions:
Do you have a safe place where they won't be disturbed by kids or pets?
Is the place properly ventilated, free from insects and small animals, and protected from water leaks? Yes, you have to design it!
What safety measures are in place to prevent damages?
If the worst happens (fire), do you have the means to stop or mitigate damages?
Does this involve risking your family's safety?
Is the electricity cost at your facility low enough to allow you to mine at a profit?
Is the energy source reliable and stable?
Is your internet connection fast and dependable?
These factors can affect your mining profitability.
There are many ways to earn in ALPH. You can stake LP in AYIN, participate in ICOs in AlphPad, or buy and HODL $TOP and retire at the peak of the bull run. Mining is important but is just one part that makes Alephium great. Mining should be done responsibly and should not put anyone's life at risk.
Moving on. Let's say you have the money, the expertise, and the space; you managed to set up a small mining facility that is ready to use 3500w of power safely. Cool. What's next? Well, you're almost there, but let me share one more important thing before you dive in. This advice comes from the mistakes of others and from my years of experience mining ETH, RVN, ETC, ERG, a bit of KAS, and ALPH.
SOAT's The First Rule of ASIC Mining
Never buy first-generation ASICs. Although it's called a RULE, consider it more of a guide. There is a lot of wisdom behind it, so let me share.
When the first ASIC for a specific algorithm is released, understand that the hashrate will drastically change. It will skyrocket to new levels. This means that whatever BITMAIN or ICERIVER tells you about the daily profit at the time of launch, it will be SIGNIFICANTLY DIFFERENT by the time all units are shipped out. This means your return on investment (ROI) will be significantly different by the time you receive your ASIC and start mining.
First batch ASICs tend to have an insanely high markup. To further back this up, GoldshellMiner was the first to release an ASIC for Alephium, the AL BOX I. Being the first and only ASIC in the market for Alephium, it was initially priced at $4,500 to run at 360GH/s at 180w. Now, it is worth just $1,399. Ice River's ALPH AL0 runs at 400GH/s at 100w. That's 10% more hashrate at 45% less power. The price? It's even 43% cheaper, at $799. Now, think about how much more efficient and cheaper the next gen miners will be.
The virtue of patience. The moment the first generation of ASICs hit the market, everything can go wild. The price action of the coin, the price of the equipment, the shortage in stocks, and don't forget, hashrate will go up and so mining profits will go down, drastically. FOMO is a bad ingredient in decision making. It's okay to miss anything out, especially if it is not even an opportunity for you. Let the opportunity come to you, and don't force it. Force and speed usually break something. For this one, it could break your bank.
Strategize. Finding a faster ROI is key. This involves lowering costs and/or increasing profits through interest rates at lending dapps. Wait for the ALPH price to stabilize if there is a sharp movement. Wait for ASIC prices to stabilize. Once mining profitability has stabilized, the demand for ASICs will stabilize, and prices will too. But what are the normalized levels? You could say the price is normalized when the ROI is between 6 to 12 months. However, I might consider it normalized when ALPH mining profitability is only slightly higher than KAS mining and would consider it cheap when it is lower than KAS mining.
Prepare. If it started raining $1,000 bills right now, do you have a way to catch as many as possible? Would you use a basin, a commercial-grade vacuum, or just grab them by hand? What I'm saying is, if you choose not to participate now, it's best to get ready for the next generation of ASICs. Learn ALPH now. Find a facility, design the electrical wirings and ventilation. Some people will sell their ASICs at a loss because they didn't read this guide before buying.
I hope I was able to give you a head start for your ALPH mining journey. Next up, mining pools, hashrates, and some interviews to mining experts!
Thank you for joining me today. See you around. Cheers! 🥂
***Disclaimer:***The information provided in this article is for informational purposes only. It should not be considered financial advice. You should consult with a financial advisor or other professional to determine what may be best for your individual needs. We do not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any investment decision without first conducting their own research and due diligence. To the maximum extent permitted by law, we disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses. Remember that investing in crypto involves risk, and past performance is no guarantee of future results.
