How to Mine Cryptocurrency?

0
46
How to Mine Cryptocurrency?

With their unremitting explosion in the mainstream, the cryptos seem to win the interest and trust of more and more people every single day.

People attract to crypto business with the idea to make good revenue.

If you’re one of those lucky ones who have decided to give this business a try, we’re ready to go extra mile for you by letting you know the itsy-bitsy of this unique world of blockchain.

Today we’ll cover everything about How to Mine Cryptocurrency?

Crypto mining, simply put, is a process done through computer software to create cryptocurrencies – where miners solve the complex mathematical puzzle to validate their transactions.

The very first transaction will determine a block to which the other transactions by the public will get connected in form of a chain.

All of these blocks combine together and end up determining the profits and losses. The first miner who wins the puzzle gets the newly mined coins as a reward.

In addition to that, they also get those transaction fees that had been paid by the public who created them.

Since the blockchain technology used in cryptocurrency spreads its operations throughout a network of computers, it allows cryptocurrencies such as Bitcoin to operate without having a central authority.

Hence, this technology reduces the risks such as hacking and scamming and eliminates many transaction and processing fees.

Types of Cryptocurrency Mining

For creating or mining your cryptocurrency, you have several options to go about! However, the most common and widely used methods include:

  • CPU Mining
  • Cloud Mining
  • GPU Mining
  • ASIC Mining

All the above mining methods have their pros and cons. Let’s explore these methods in-depth.

CPU Mining Method

In the CPU Mining method, you will require processors for mining cryptocurrencies.

This was one of the most popular and widely applied methods for mining cryptos in the past but with the other methods came up, this method is becoming more and more obsolete with each passing day.

And there are many good reasons why this method has become outmoded!

The first reason for the downfall of the CPU mining method is that this mining method is Extremely Slow.

Like you may have to work for months to make the tiniest amount of revenue. So, this is the primary reason why people are forgetting this method.

The other reason is that the CPU mining method is simply not worth it because it makes you spend more money than what you will earn.

You probably have to spend on cooling and electricity ten times the amount you have earned. So, why is this method used hitherto?

Simply because anybody with a desktop is capable of doing that. All one needs to go about CPU mining is just a desktop and a few programs.

Because of the easiness of the CPU method, new miners get to choose this method for crypto mining.

The newbies don’t care about anything and just want to commence in any way possible and as soon as possible.

Moreover, this method is possible to execute through a laptop but we advise you never to use it as your machine will probably overheat and fry within a few hours of mining.

Cloud Mining Method

Simply put, Cloud mining is the on-demand availability of mining cryptocurrencies from a third party on the internet (“the cloud”).

If you’re a newbie and watching out for a potential way to go about mining, this method is for you!

This is now among the most popular ways to mine cryptos without needing to lift a finger.

In this method, you pay a specific amount to a third party (often a big corporation) and “rent out” their “rig” (the mining machine), as well as the mining process itself.

Your rent will last for some agreed-upon period during which all of your earnings made by their rig will be transferred to your crypto wallet.

From your total earning, some amount will be cut in the name of maintenance costs and electricity costs.

The big companies with grand mining facilities offer cloud mining services, but many people are there to do mining for you.

This method has become more and more popular every day since it offers to the people a possibility to try their luck in this unique world of cryptocurrencies who either don’t have enough money to buy a rig for themselves or who simply aren’t fascinated with the idea to own a rig or the ones who have no time to do mining themselves.

The cloud mining method offers two options – one is free and the other is paid.

The newbies mostly want to go for the free option but it is not advised as it has its shortcomings like extra conditions and extremely slow mining speeds. The other paid option will work like this:

  1. Find a Host – First of all, you will find a Cloud mining host through the internet.
  2. Check Out the Mining Plan – Once you have found an appropriate host for yourself, now look out for their crypto mining plans ranging from very economical to the most expensive ones.
  3. Customize Your Plan – Many hosts offer the facility to customize your mining plan the way you want. You must avail this opportunity if you want and the way you want.
  4. Perform Transaction – Once you have your mining plan with you, the next step will be to perform a transaction i.e., you pay your host to register your crypto wallet code, and voila.

Different Cloud mining methods have different costs and will last for different periods.

For example, the standard Cloud mining plans can range anywhere between $500 and $5000 and can last from a couple of years to a lifetime.

GPU Mining Method

GPU mining method, nowadays, is the most common and widely applied crypto mining method.

If you browse “cryptocurrency mining”, the GPU mining reveals among the first things that will show up.

Cloud miners also use GPU rigs to provide services to their clients. The extreme popularity of GPU method is lying in the fact that not only does GPU mining is relatively cheap but also it’s extremely efficient.

Graphic Processing Unit (GPU) uses graphic cards for mining cryptocurrencies. One standard GPU rig is the product of a motherboard, a processor, a rig frame, a few between 2 and 8 graphic cards, and cooling.

For a nicely built and well-performing GPU mining rig, a typical price will be around $3000. Although it seems hefty investment, but it will pay you off much faster than any other mining methods.

So, the people who’re looking for a potential method to mine cryptocurrency should check this one out!

ASIC Mining Method

The Application-Specific Integrated Circuits ie., ASIC are devices that are specially and explicitly designed to execute a single task, which in our case is crypto mining.

When we compare ASICs with their competitors such as CPU and GPU, we find out that ASICs are known to produce huge amounts of cryptocurrency.

So, why we forget to mention this method earlier if it is that good? Well, because ASICs are a subject of controversy.

As you know, when the company “ASIC” announced its latest machine version, it caused big chaos in the cryptocurrency community.

Many people even asked to ban these machines right away. Why? Well, because ASICs are extremely powerful to the extent that they can even rob other crypto miners who are utilizing CPU or GPU rigs of the chances to maintain their earnings and hash speeds.

In addition to that, ASICs are alleged to twist the economy of some specific cryptocurrencies.

You can imagine the kind of uproar if and when a single miner will get the majority of earnings via an ASIC farm!

The Best Method for Cryptocurrency Mining

Now that you have a clear understanding of how and what ways to go about crypto mining, you have to pick a mining method for you.

We can’t decide which mining method is best of all because eventually it solemnly depends on you what method will suit you the most keeping in mind the budget, time, and efforts.

Generally speaking, Cloud and GPU mining are two big favorites among miners these days.

ASIC mining method could get extremely unpredictable, while CPU mining is tedious and slow.

GPU is your way to go if you’re willing to build your rig. If you love adventures and are not afraid of risks, give ASIC mining a shot!

To get going ASAP, CPU mining is your thing and if you don’t want to do with the rigs or any other pieces of machinery – the Cloud mining method will be best for you! Cheers!

The Cryptocurrency Mining Pools

Since the crypto mining rewards are given to those miners who had first discovered a solution to the puzzle and the chances of that event are equal to a small portion of the total network’s mining power.

So the participants who have a small portion of mining power have a rare chance of finding the next block in the chain for them.

Just imagine, you have purchased a mining card for thousands of dollars that would represent the network’s mining power as low as 0.001%.

So, with that much power, you have a small chance to find the next block in the chain or but if you’re lucky enough to find it, you must have invested countless hours to do so.

Hence, you may never retrieve your investment. Here is where the Mining Pools come to play.

These third-party-operated pools offer miners to work together and share the revenue among all the participants. In this way, miners can get a consistent flow of coins.

The Cryptocurrency You Should Mine

Surely, your first thought about which Cryptocurrency you should mine will be the one that has the most potential in terms of ROI.

However, your choice also depends on the method of crypto mining that you have opted for.

Depending on your chosen mining method, you should check out the different prices and then calculate when your ROI would happen. This way you will figure out your go-to cryptocurrency in no time!

However, among the obvious favorites are Bitcoin, Dash, or Ethereum. If you’re choosing Bitcoin as your cryptocurrency, keep in mind, you’re diving into a few pools to get from since this most popular coin has crowds to run after it.

So, for winning even the smallest amounts of Bitcoin, you might have to wait for countless tiring hours. Hence, your best bet would be any less popular coins such as Ethereum.

Final Thoughts

Since there is a range of methods to go about mining, you should opt for the one that is most suitable for you.

One thing that you must do immediately is to create your cryptocurrency wallet. For that, just choose the cryptocurrency you’re willing to mine and watch out for the wallet options that are available for that currency.

We very strongly recommend Trezor, Coinbase, and Ledger Nano S, since they’re extremely reliable. You’ll face no problem finding a wallet for well-known coins such as Bitcoin, Litecoin, and Ethereum.

However, for the lesser-known coins, you have to invest some time in searching for a reputable wallet.

Believe it, getting a reputable and secure wallet is one of the most crucial tasks when you’re starting with crypto mining.

Can you imagine that you have been mining for months and all of your earnings have got stolen since you had picked a fishy wallet that got hacked?

So, we suggest you buy a “cold wallet” as they are not connected to the internet so they can’t get hacked.

This is why the clod wallets are the most trustworthy and safest wallets out in the market. Recall–there is not a single best crypto mining method, it is the one that suits you the most.

You will opt for the one depending on what you’re looking for and what sort of resources you already have. We wish you All The Best if you have made up your mind to give crypto mining a chance!

For more information about cryptocurrency check other blog posts on our website.