📖 Mining Glossary
Everything a home miner needs to know — plus how to stay safe.
⛏️ Mining Basics
Hashrate
How many calculations your miner performs per second. Higher hashrate = more chances to earn rewards. Measured in H/s, KH/s, MH/s, GH/s, TH/s, or PH/s depending on the algorithm.
💡 Don't chase highest hashrate — efficiency (hashrate per watt) matters more for home miners.
Block Reward
The cryptocurrency paid to miners who successfully add a new block to the blockchain. For Bitcoin, this halves every 4 years (currently 3.125 BTC per block).
Difficulty
A measure of how hard it is to mine a block. Adjusts automatically based on total network hashrate. Higher difficulty = less frequent rewards for the same hashrate.
Mining Pool
A group of miners who combine their hashrate and share rewards proportionally. Provides steady, smaller payouts instead of rare, large payouts from solo mining.
💡 Home miners should almost always use pools — solo mining is like playing the lottery.
Solo Mining
Mining without a pool. You keep 100% of any block you find, but for Bitcoin you might wait years between rewards. Only practical for coins with low difficulty.
Algorithm
The mathematical puzzle miners solve. Different coins use different algorithms: SHA-256 (Bitcoin), Scrypt (Litecoin), KHeavyHash (Kaspa), Ethash (Ethereum Classic), Blake3 (Kadena).
🔧 Hardware
ASIC
Application-Specific Integrated Circuit. Specialized hardware built solely for mining one algorithm. Extremely efficient but expensive and can't be repurposed.
GPU Mining
Using graphics cards to mine. More flexible than ASICs (can mine multiple algorithms), but less efficient for most coins. Still viable for some altcoins.
Lottery Miner
Low-power USB mining devices (like Bitaxe, NerdMiner, Lucky Miner). Very low chance of finding a block, but fun, educational, and use minimal electricity. Great entry point for beginners.
💡 Think of it as a bitcoin lottery ticket that runs 24/7 for pennies.
Loki Kit
Hardware modification that allows industrial ASIC miners (designed for 240V) to run on standard 120V household outlets. Lets home miners use powerful equipment without electrical upgrades.
PSU (Power Supply Unit)
Converts AC power from your wall to DC power for the miner. Must be rated for your miner's wattage plus 10-20% headroom. Critical for reliability and safety.
Firmware
Software embedded in your miner that controls its operation. Stock firmware comes from the manufacturer; aftermarket firmware (Braiins, VNish, LuxOS) can unlock better performance and features.
💰 Profitability
ROI (Return on Investment)
How long until your mining profits pay back your hardware costs. Calculated as: Equipment Cost ÷ Monthly Profit = Months to ROI.
Break Even
The point where your total mining revenue equals your total costs (equipment + electricity). After break even, you're in pure profit.
Pool Fee
Percentage taken by mining pools for their service. Typically 1-2%. Lower isn't always better — reliable pools with good support are worth paying for.
Dev Fee
Percentage taken by aftermarket firmware developers. Usually 2-3%. Pays for ongoing development, tuning profiles, and support. Worth it for the efficiency gains.
Efficiency (J/TH, W/MH)
Power consumption per unit of hashrate. Lower is better. A 25 J/TH miner uses less electricity than a 35 J/TH miner for the same hashrate — critical for profitability.
💡 For home miners, efficiency often matters more than raw hashrate due to electricity costs.
⚡ Electricity
kWh (Kilowatt-Hour)
How electricity is billed. A 1000W miner running for 1 hour = 1 kWh. At $0.12/kWh, that's $0.12. Running 24/7 = 24 kWh/day = $2.88/day.
120V vs 240V
Standard US outlets are 120V (15-20A). Dryers and ovens use 240V. Most industrial ASICs need 240V but can run on 120V with a Loki Kit or modifications. 240V is more efficient (less heat loss in wiring).
Circuit Capacity
How much power a circuit can safely deliver. A standard 15A/120V circuit provides ~1,440W safely (80% rule). Never exceed this — fire hazard. Use dedicated circuits for miners.
💡 The 80% rule: Only use 80% of a circuit's rated capacity for continuous loads like mining.
Time-of-Use (TOU) Rates
Electricity pricing that varies by time of day. Many utilities offer cheap/free nights or off-peak rates. Schedule mining during cheap hours to maximize profit.
⚠️ Common Scams
Mining attracts scammers. Know these red flags to protect yourself.
Cloud Mining Scams
Services claiming you can "rent" hashrate remotely. Most are Ponzi schemes — they pay early investors with new investors' money until it collapses. If you don't control the hardware, you don't control anything.
🚩 Red flag: Guaranteed returns, referral bonuses, "limited time" contracts.
Fake Mining Pools
Pools that steal your hashrate and never pay out, or take excessive hidden fees. They may show fake dashboards with fake earnings. Stick to established pools with public reputations.
🚩 Red flag: No reviews, anonymous operators, too-good fees, pressure to deposit.
Fake/Defective Hardware
eBay and Alibaba listings showing impossible specs at low prices. Often relabeled old miners, broken units, or completely fake. Only buy from verified sellers with return policies.
🚩 Red flag: Price way below market, shipping from China with no returns, new seller accounts.
Phishing Sites
Fake pool login pages, wallet sites, or exchanges designed to steal your credentials. URL looks almost right (f2p00l.com instead of f2pool.com). Always bookmark the real sites.
🚩 Red flag: Links from DMs or emails, slightly misspelled URLs, urgent "verify your account" messages.
Social Media Giveaways
"Send 0.1 BTC and receive 1 BTC back!" — Always fake. No one gives away free crypto. Often impersonate celebrities or companies. YouTube live streams are especially common for this scam.
🚩 Red flag: Any "send crypto to receive more" offer. It's always a scam. Always.
Malware Firmware
Firmware downloads from unofficial sources that contain backdoors. Can redirect a percentage of your mining to the attacker's wallet or steal your pool credentials. Only download from official sources.
🚩 Red flag: Firmware from random forums, Discord links, or "cracked" versions without dev fees.
Impersonator Support
Scammers posing as Bitmain support, pool admins, or firmware devs in Discord/Telegram. They'll ask for remote access, wallet info, or "verification fees." Real support never DMs you first.
🚩 Red flag: Unsolicited DMs, requests for private keys or remote access, "urgent" problems with your account.
Ready to Calculate Your Profits?
Use The Sola Ray Effect calculator — built for home miners.
⚡ Open Calculator