What Is HDD Mining? – The Technology Simplified9 min read

What Is HDD Mining? – The Technology Simplified9 min read

15/03/2019 2 By Vasyl Tsyktor

HDD mining is the cryptocurrency mining method based on hard disk drives. Unlike typical mining based on graphics processing units, also known as GPU mining, HDD miners use a set of hard disk drives to generate new blocks in the distributed ledger. When it comes to assembly and maintenance, HDD mining farms hardly differ from traditional mining farms. Besides hard disk drives, you also need a computer, display, as well as input devices involving a keyboard and mouse in order to create an HDD mining farm.



The main characteristic of this cryptocurrency mining method is that it requires no powerful GPU or central processor unit (CPU), unlike Bitcoin mining. The main component is HDD while its capacity and performance matter the most. Moreover, you don’t need a separate GPU at all to mine cryptocurrency with your HDD. A motherboard or CPU built-in GPU is enough.

Advantages:

  • You don’t need to buy an expensive motherboard with a large number of PCI slots;
  • You have no need for advanced GPUs;
  • Fast mining software installation and configuration;
  • No need for complex constructions for a set of GPUs;
  • saving costs on electricity since HDDs consume less energy than graphics processing units;
  • Reduced heat while HDD functioning;
  • You have no need for using fans to reduce the equipment temperature
  • HDD mining is an easy process, so newbies will be able to deal with it.

Disadvantages:

  • It’s hard to find second-hand hard disk drives;
  • the service life of hard disk drives is about 10,000 hours;
  • With HDD mining, you can mine fewer coins than with GPU mining within the same time.

How HDD mining works

HDD mining process:

  1. Pre-generating data blocks saved to HDD. The more plots you store, the higher mining speed will be.
  2. Setting a reward beneficiary
  3. Setting a deadline and mining

Let’s consider each process in details.

Step #1: Plotting

Plotting refers to the pre-generating data blocks, also known as plots, on a hard disk drive. While this time- and energy-consuming process is continuous when it comes to GPU mining. However, it has to be done only once while mining cryptocurrency with your HDD.

Step #2: Setting a reward beneficiary

Once chunks of data have been pre-generated, you have to set who will get a reward for creating new data blocks. When you mine on your own, an end reward recipient is you. In case where you mine cryptocurrency within a pool, then you a reward beneficiary is the pool’s address.

 

The benefit of mining on your own is that you get a full reward for creating a transaction in the distributed ledger. However, you need more time and memory space compared to cryptocurrency mining in a pool. In the second case, you can cooperate with other miners in order to speed up the mining process, but every pool member will get a portion of the final reward.

Step #3: Mining

With a reward recipient set, you can launch your mining software when you have plots generated and saved on your hard disk drive. The tool will analyze your data chunks and calculate the amount of time needed to generate the current data block. When the system sets the deadline, your HDD will idle until the next block gets created.

 

Unlike GPU mining, your hard disk drive remains idle most of the time because the number of blocks remains stable and it takes a few seconds to analyze each block. Among all miners, the least time needed to generate a block establishes the duration of the current data block. This is the reason why mining Burst is so energy efficient and easy on the hardware: your HDD is idle and reading through the plot files only for a few seconds for each block. The best deadline submitted among all miners is the one forging and establishing the duration of the block.

Algorithms

G-Drive Hard disk drive

Using hard drives instead of graphics processing units is the next step in cryptocurrency mining. The first blockchain system based on these devices was the Burst platform appeared in 2014. However, it took a few years until this platform became known. Burst relies on the hybrid proof-of-capacity (PoC) algorithm which requires a large amount of disk space. Later, other cryptocurrencies, which miners could mine using hard drives, appeared. Although, they relied on the different proof-of-storage technology.

Proof-of-capacity

The proof-of-capacity algorithm, also known as PoC, is the transaction generating algorithm based on a proof that the user has a legitimate interest in any service. As a means of this proof, miners provide their free disk space the system can use to accomplish its tasks like creating new data blocks.

 

Proof-of-capacity refers to the “megabytes as resources” concept which means that miners have to share their HDD space to receive a mining reward. With this algorithm, users can invest their free computer memory space thus using it in a more effective way. Using the PoC algorithm, the distributed ledger creates data blocks on a disk using the hashing method. The more hashes you have on your hard drive, the higher your chances to get a reward are.

Proof-of-storage

Proof-of-Storage, also known as proof-of-space or PoS, is the cryptocurrency mining algorithm that relies on free disk space like proof-of-capacity. However, the PoS-based blockchain uses this free memory space to form decentralized cloud storage rather than generate data blocks.

 

In other words, cloud-based storage systems rent user HDD space and provide it to other users who have the need for it. However, instead of paying rent, these services allow disk space owners to mine cryptocurrency using service facilities. Unlike PoC-based blockchain, PoS-based distributed ledgers form cryptocurrency mining rewards using user monthly payments for file storage services.

SSD vs HDD

Some miners may consider using solid-state drives (SSDs) to speed up the data block generation process. However, the comparison of SSD vs HDD for mining makes no sense since the performance of the storage device doesn’t matter when it comes to HDD mining. SSD will only speed up the initial plotting process. That’s why SSD isn’t worth it. Moreover, the SSD lifecycle is much shorter than hard disk drive’s one while the cost of each gigabyte will be higher.

Cryptocurrencies

La Cie hard drive

Since HDD mining is a relatively new concept, few cryptocurrencies use either proof-of-capacity or proof-of-storage algorithm. We will cover the most popular ones.

Burst

Burst is the first and main cryptocurrency you can mine using a hard drive. This platform relies on the proof-of-capacity algorithm and requires a set of HDDs with a large capacity. You have no need for connecting any other powerful devices like graphics processing units to mine Burst. Miners can use advanced hard disk drives with the capacity of 10 terabytes and higher to ensure high-performance mining. The more such HDDs you use, the more rewards you will get.

Storj

Storj is a decentralized file storage system that allows you to safely store your files in an encrypted form. The main idea of this platform is to connect users who would like to make a profit on their free HDD space and those who need additional memory space. Storj users can provide the service with a part of their HDD memory space and become node owners. As a result, these users also become cryptocurrency miners and receive a reward in STORJ coins in exchange for their disk space. In other words, Storj miners provide other platform members with their disk space for decentralized file storage for altcoins.

Sia

Sia is a decentralized platform that provides cloud storage and competes with DropBox, Amazon, Apple, and Microsoft centralized cloud storage services. With Sia, users can provide their free HDD space while those who rent this space store their files encrypted in the system. Public blockchain proves the integrity of stored content while smart contracts and proof-of-storage algorithm validate the reliability of transactions.

 

Sia users pay for online services with Siacoin. Any Siacoin owner can rent a place from Sia hosts. Smart contracts initiate transferring a payment to a specific host only in case it will have files safely stored within a specified period of time. If the host loses user files, it won’t receive a payment for providing free disk space.

How to mine cryptocurrency using an HDD


Burst is the most representative cryptocurrency you can mine using a set of hard disk drives so let’s consider how you can mine Burst coins.

Burst mining algorithm:

  1. Download and install the latest JAWA framework version.
  2. Download and install Burst mining software from the official website.
  3. Click on the New? Create Your Account button in order to create your crypto wallet account.
  4. The tool will automatically create a secret phrase you can use to restore your account. Copy this phrase to a safe place.
  5. Confirm you have saved a secret phrase by pasting it in the form.
  6. Before mining, you should first protect your wallet. Go to the Burstcoin Faucet, enter your ID, confirm with captcha, and click on the Claim Burst button.
  7. Click on the No Name Set button
  8. Create your username, enter your secret phrase, and click on the Update Account Info button.
  9. In the bottom of the interface, click on Write Plots and then on Plot this Drive.
  10. Choose the amount of disk space and number of cores you want to use for mining.
  11. Enter your ID and click on Start Plotting.
  12. Once the plotting process is complete, you can close all the cmd windows.
  13. The new Start Mining button will appear next to Write Plots. Click on the former button.
  14. Select a mining pool from the list.
  15. In the appeared window, click on Change to connect your account to the pool.
  16. Click on Ok in order to copy the pool address.
  17. Paste the pool address in the second Recipient line.
  18. Enter your secret phrase in the first line and click on Submit.
  19. If you see the error message, then click on the new Change button and repeat the steps #16, #17, and #18.
  20. You will see the hash signature. Click on the Start Mining (CPU/AVX) button to start mining Burst coins.

How much can you earn by mining Burst?

If you use 10 Toshiba hard drives for $277 per each device with a total capacity of 100 TB, you can get 2,040 coins per month according to the online Burstcoin calculator. With the Burstcoin cost equal to $0.0039 as of the time of writing this post, your monthly income will be $8. Annual income is $92.

Costs:

  • Hardware cost: 10 x $ 277 = $2,770
  • Electricity: $0.5/month x 10 = $5/month or $60/year

Payback period: 86 years and 6 months.

 

 

 

Burst is too cheap to invest in mining this cryptocurrency. The payback period is too long despite you have to spend less on HDD mining than traditional GPU mining. Instead of Burst, you would rather consider some other coins, for example, Bitcoin which currently costs about $4,000. Anyway, you should understand that you need to create a huge mining farm rather than buy a few ASIC devices in order to make a profit on GPU mining.

What Is HDD Mining? – The Technology Simplified9 min read
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