Cryptocurrency mining is also known as crypto-mining. It is a virtual validation process in which different form of cryptocurrencies are verified and get added to blockchain ledger. If you want to make a profit out of your cryptocurrency usage, understanding crypto mining will be a real advantage for you. Other forms of the word you may utter are altcoin mining, Ethereum mining and all sort of it.
Every time a cryptocurrency transaction is done, there will be a cryptocurrency miner behind it and responsible for confirming the authenticity of the said transaction.
This is a perfect example of how Proof-of-work concept actually works, the blockchain does require someone to validate the transactions. As being called, Decentralized, it is important that no one but the miners do the job for verification.
In-depth, it is the inherent responsibility of the miner to update the transaction in the blockchain ledger. The mining process includes complex comparison with other crypto-miners for abstracting complex mathematical algorithms with cryptographic hash functions which remains linked with a block holding the transaction related data.
These miners are nothing but our usual computers or the smartphones. What really interesting about the mining is that the owner of the miner(that is who is running the mining software on their computer) don’t have to know about any data passing through. Actually, he can’t because it is encrypted with a special technique also know to be Cryptography.
Which Alt-Coins is Best for Mining?
Once upon a time, Bitcoin was the most popular option of crypto-mining and it was lucrative too. But it isn’t anymore because difficulty to mine Bitcoin had increased drastically. Mean you need more powerful computing in order to mine effective profit in Bitcoin.
Also, the crypto market is a volatile market and therefore you should always be aware of your investment. Presently, Bitcoins are not a risk-free choice for the miners dealing at beginners’ stage: because of its high unit value, it is more appropriate for large-scale mining only. For beginners with small-scale mining projection with other Cryptocoins.
Presently, Litecoins, Dogecoins, Ethereum and Feathercoins are the script based coins, which can offer the miners best cost benefits. For instance, with Litecoin a miner can earn from 60 cents to 15 dollars per day by using consumer level mining hardware. A Cryptocoin is emerging up, it is Peercoin: mining on these coins will not be too risky in terms of high investment value in it.
However, more people are getting involved in mining, your challenge in crypto mining is getting bigger. And yet letter it was realised that Proof-of-work in turning into a bad practice and inviting unsustainability.
In fact, you are likely to face two probable situations. Either you need to increase your investment portfolio, or you need to switch to your mining to a less popular crypto coin — this is because the other coins have a lower level of difficulty mean you can mine more coins in the shorter period of time rather than high difficulty only give you fewer coins.
There were days when the difficulty of mining Ethereum was fairly low, getting 2-3 ETH per day was just as easy as it is. But now mining even 1 ETH is harder and require more computing.
How much worth is it?
Cryptomarket is globally volatile and unstable. Therefore it can be extremely risky if you invest a big chunk of your asset here. However, with a successful and calculated investment, you can earn small by crypto mining. For example, investment in Litecoins, Dogecoins, and Feathercoins, if there are no major hiccups in the market, will let you earn $1000 in 18-24 months in hardware cost. To be precise, if you are willing to invest $4000- $5000 at a time as up-front hardware cost you may expect to earn $50 approximately per day!
Setting Reasonable Expectations will help you to enjoy mining.
One point you need to understand well that crypto mining will not help you in earning a big, rather it will help you in earning a few digital currencies which you going to sell at the higher price.
Energy cost is a matter is one of the concerns for most of the miners: therefore you need to equip yourself with the right gear for doing the mining.
So you need to arrange just two items:
- The up-front investment in buying at least 4 ASIC processors/ 4 AMD Radeon or Nvidia graphics processing units. Keep it in mind that a laptop, gaming console or a handheld device is not sufficient for crypto-mining. These devices will not perform as effective enough for generating income for you in a steady way.
- You need a mining software and pool where you can start the mining process.
Before starting the mining do adequate research to gather insight about scam currencies. Always remember to set your goal for reasonable or minimum return from Crypto mining: this is one of the best ways to stick to this process.
Pools are the group of miners come together at the same place to mine a specific cryptocurrency. We can also refer it as,” pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to the probability of finding a block”.
But what is the advantage of mining cryptocurrency in a pool rather than all alone? The answer of this question is fairly simple. Let me ask you a question can you dig a hole in a ground easily by just yourself? or rather call your friends and work together and get to the treasure and then reward every friend for their hard work?
The answer is 2nd. When you work in a team the work becomes fairly simple enough. Likewise to Solve the Blockchain problem you’ve given a certain block to mine and solve. In earlier day mining a single block by your self was easy, but due to increases in difficulty, you need more miners to help each other. The is one of the solutions to keep blockchain alive.
Famous Mining Pools
Here is the list of famous mining pools:
How crypto-mining works?
The entire focus of mining should be kept on three points. These are:
- You have to offer accurate bookkeeping services to the crypto-coin network you are mining. Mining is basically 24/7 computer accounting, which is called ‘verifying transactions’.
- You will get a small reward against your invested accounting services as payout: you will get fractions of coins every couple of days in your crypto wallet.
- You need to keep your personal costs down, which includes the use of electricity and hardware.
The checklist: What You Will Need to Success Mine Cryptocurrency
You will need ten things to mine crypto coins, which are listed here.
- A free private virtual coin wallet: it is always secured with password and it stores all your crypto earnings keeps a network-wide record of transactions.
- A free mining software package: you can check with expert miners about their preference.
You need to take a membership in an online mining pool, a community of miners who know well the ways to syndicate their computers for increasing profitability and income constancy.
- You need to seek membership in an online currency exchange: here you will get to exchange the virtual coins you have for fiat currency, and vice versa.
- A reliable high-speed secured internet connection, ideally, 2 megabits/ second or with faster speed is needed for mining.
- A hardware setup location in an air-conditioned space.
- A sturdy desktop or a custom-built computer exclusively designed for mining. You may use your existing computer, but you won’t be able to use the gadget while the miner inactive. A separate dedicated computer is a prerequisite.
- You need an ATI graphics processing unit (GPU) or a specific processing device called a mining ASIC chip. The GPU or ASIC will execute the accounting services as well as will perform the mining work.
- You need to set a house fan to blow cool air for your mining computer. Mining generates considerable heat, and cooling the hardware is essential for successful mining.
- You must have a strong passion for reading and learning, as there will be ongoing technology changes and the introduction of new techniques for optimizing coin mining methods. Studying hard and close association to market are the two things that successful miners always are diligent at, which result in successful mining.
- This is all about Cryptocurrency mining. Before you start, you must learn the process from an expert miner and once you know the basics at least, you can start mining of your own.
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Meanwhile, have a look at my small home mining farm :P.
Few Articles to keep going
- Decentralized Applications (DApps) – A Beginner’s Guide
- Ethereum Casper: Everything You Need to Know About
- Best Advantages and Disadvantages of Using Cryptocurrency