Crypto Mining

What you need to know about mining cryptocurrency

May 21, 2019

By Team Basil Zaff

What you need to know about mining cryptocurrency

If you have ever considered the idea mining cryptocurrency, you might be highly interested in knowing just how you can get started and how you can capitalize on the bang that cryptocurrency has created throughout the world. Finding and mining the next great cryptocurrency ultimately involves having an understanding of how you can get in early and start mining it, rather than paying for it at top dollar.

Many of the top people that have profited off of cryptocurrency, were using their computer resources to mine in the early stages. With cryptocurrency like bitcoin, it can eventually get so difficult to actually decode new blocks that mining is next to impossible without investing in serious hardware. Learning how to mine and some of the pros and cons of mining each cryptocurrency is exactly what will cover in this article. Even if the chance to mine major cryptocurrencies link bitcoin has passed for people with average hardware, there are some popular coins that can still be mined.

Intro:

What does cryptocurrency mining mean?

When we think about mining, we often consider the idea of people working away in a coal mine or pulling resources under the ground. Cryptocurrencymining is a very different process. In the very basic format this form of mining involves setting aside machine resources to obtain small amounts of cryptocurrency.
As a machine is directly responsible for mining the coins, most professional miners upgrade their hardware in order to more efficiently mine the coins. If you are trying to get started with mining, a good place to begin is with your own personal computer.

At its base level, you can use a PC to perform a series of tasks required by the network that can help you to obtain small portions of cryptocurrency. Most of these tasks are called a proof of work and these tasks are generally what that network requires in order to stay up and maintain itself without any type of human intervention.
For the most part, these administrative tasks are considered to be lengthy math equations. As the solutions are delivered, new blocks of the ledger for a cryptocurrency will become unlocked and this incentivizes more users to lend their resources to the solutions as well.

If you have enough computing power you can often work on some of these solutions by yourself with your own hardware to get the maximum payout. What many individual users choose to do instead is mine as part of a pool. Entering into a pool for the tougher equations ensures that you will still get solutions and just a small portion of the coins that get unlocked with the block solution rather than the whole payout.

Pooled mining can make sure you get consistent but smaller shares of the mining process and this is often one of the best ways that you can continue mining and receiving better payouts. It can be quite a gamble to go into mining all on your own without the support of proper hardware.

Mining cryptocurrency in the beginning:

If you are interested in getting started with cryptocurrency mining, there are some great resources that you can use to start including cloud mining.

Cloud mining method:

The cloud mining method remains a very popular way for you to mine a cryptocurrency without having to dedicate extreme resources or even set up the system yourself. With cloud mining, you pay for a rental on someone else’s hardware and you’ll receive a portion of the earnings that the hardware achieves from mining.

Cloud mining really involves the process of setting up rental contracts. You’ll pay a large corporation for a certain amount of their processing power on the mining rigs that they build. The rental of this power lasts for a certain amount of time and whatever coins the rig is able to generate using your processing power will be transferred to your crypto wallet minus the fee for electricity and maintenance.

Companies that are offering these types of cloud mining services often have many different forms that they are able to set up to offer these services to people. The cloud mining process remains a very popular choice for those that want to get started because they don’t have to build their own rigs or calibrate them.

There are two monetized ways that you can get involved with cloud mining. There is a paid version where you can find a host that will let you exchange small tasks like surveys and more for a tiny portion of their hardware. There are also paid versions which can help you customize your own mining plan.

The best part is that many of these plans differ to suit your budget for investment. You can have a yearly plan for US$500 up to US$5000 if you would need access to even more hardware. Plans can often last longer than a yearly subscription as well. There are some providers that can deliver a lifetime subscription to their mining hardware for a one time fee.

In most cases, any of these rentals will reach a break even point on your investment within the first year. It ultimately depends on the value of the cryptocurrency that you would like to use that hardware to mine. If you end up choosing a cryptocurrency that remains quite profitable, you can continue to see great results as long as you keep on with your cloud mining contract and potentially upgrade the contract every few years to account for the difficulty of maintaining the network increasing.

CPU mining:

You can use your own resources to mine cryptocurrency as well. CPU mining uses a computer processor in order to produce the proofs to maintain a network and mine cryptocurrency. This was considered to be quite a viable option in the early days of a cryptocurrency. The problem today is that straight CPU mining can be one of the slowest forms of mining. It’s likely that you will have to spend too much money on cooling and electricity and for a result that could ultimately end in a loss based on its cost and speed.

The good news is that anyone can perform CPU mining with a simple desktop computer. It’s not advised to do any form of CPU mining with the laptop is this can often lead to overheating. If you have only minimal materials like an older computer and you would like to get started with cryptocurrency, this could be a fine way to get going. It is ultimately the slowest form of mining however.

GPU mining:

GPU mining remains one of the most popular and vastly known forms of mining for cryptocurrency. When you see many of the home rigs that are created for this purpose, they are mostly created using GPU rigs.

Most of the cloud miners that are in business today also use GPU rigs in a heavily upgraded format. GPU mining remains one of the most efficient and inexpensive ways to mine cryptocurrency. By rigging together a series of graphics cards and using their power to solve the equations that help users mine crypto, it is possible to generate a highly effective method for mining cryptocurrency. Most of the simple GPU mining rigs can cost around $3000 US. These are devices that are commonly made up of between two and eight graphics cards, a motherboard, processor, frame and various cooling elements. You can often find custom-built rigs that can be set up in a flash and preassembled on many online marketplaces like ebay. It’s just very important that you vet the seller first to make sure that you’re getting a deal on the fastest hardware that will be effective.

ASIC mining:

ASIC or Application specific integrated circuits are devices that are designed specifically for cryptocurrency mining. These devices are some of the most efficient methods for generating cryptocurrency from mining but they can be quite expensive. ASIC generated a series of controversy within the network because the machines can so vastly outpaced GPU and CPU miners. Miners that have invested in ASIC farms are often able to generate greater results and can ramp up the difficulty in any type of cryptocurrency network. What this basically leads to is any ASIC miner taking the vast majority of shares away from any other type of miner which can lead to chaos in a network.

With the controversy surrounding ASIC mining, it’s important to proceed with caution. Although these miners can be some of the fastest on the market, they have also been considered for ban across a few networks.

Best methods for mining a crypto:

Now that you no bit more about the process of mining and some of the options, it’s important to consider which could be the best way for you.

Deciding on the method that you should be using really comes down to answering how much you would like to invest. If you are looking for a fairly small investment in mining it is a good idea to consider CPU mining to get your feet wet or simply pay for a cloud service.

For the best hands-off approach the cloud service remains one of the least labor-intensive and expensive options available for mining.

If you’re interested in getting started with owning a rig GPU mining reigned supreme amongst hobbyists and cloud mining providers today. A few top miners are using ASIC mining, but this type of technology can be expensive and unpredictable especially with the number of cryptocurrency networks banning the technology with the use of their blockchain.

If you are willing to take the risk ASIC mining remains the most efficient and the best solution for mining a massive amount of cryptocurrency with your own hardware.

Which cryptocurrency should you mine to start?

The choice for your investment will also likely determine the type of cryptocurrency that you will be mining. Ideally, it’s a good idea to choose a fairly stable cryptocurrency. Bitcoin at one time was readily mineable but today it can be quite difficult especially with the popularity in the network. Using cloud mining and getting an invite to the right pool can be a way that you can mine bitcoin with a healthy upfront investment. Choosing ASIC mining with bitcoin or building a serious GPU rig is really the only way you can mine it at home.

Some cryptocurrency you could start with where you can see greater profits might include Dash or Ethereum. Both of these are fairly stable as well as up and coming cryptocurrencies. Putting your mining resources towards cryptocurrency that is slightly less popular but starting to stabilize will help you generate faster results for your return on investment and with a lower budget.

Conclusion:
The process of mining cryptocurrency can grow confusing especially with the massive number of methods and cryptocurrency choices you can make in allotting your mining resources. This article is designed as an intro to the main methods that you can use for your first mining experience.

If you are interested in getting a bit of cryptocurrency to start your journey and investment, you can try out some bitcoin faucets and other methods with your cryptocurrency wallet. These are some methods we will get into later and a great way to bolster your cryptocurrency wallet as you are waiting for your mining efforts to pay off.

When you get started with your cryptocurrency wallet, make sure that you are choosing a cryptocurrency that is compatible with that wallet and one that you might want to mine someday. Major platforms like Litecoin, Bitcoin, Ethereum and more are great choices for investment. If you are going to be mining some lesser known coins, using a wallet where you can keep your savings can be very important. Make sure that you study the number of coins that you can store in the wallet that you choose, that the wallet you are using has the right security measures and that you could be ready to mine and send coins to that wallet in the future.

Buying into a hardware wallet could be one of the best solutions for you if you are planning on getting serious with mining cryptocurrency. When you are dealing with a major investment this is one of the safest ways that you can protect your cryptocurrency.

I hope that you will give cryptocurrency mining a chance in at least one of the forms we’ve mentioned in this article. There are a number of great resources that are available to help you down the path to mining for the first time and I wish you the best of luck in getting started with one of these methods!