You may have heard about the term ‘mining’ before, and many people still aren’t sure if it’s worth it in 2021. In today’s article, we will explain what mining is, how it works, and why it is quite obvious that mining won’t go away soon.
What is mining?
First things first. Let’s talk about mining. Mining is the digital process by which new coins are entered into circulation. By performing and checking transactions on the blockchain, miners assist with the creation of a safe and secure blockchain. The more miners, the more decentralized the blockchain will be. Mining is performed by using raw computing power. The faster the computer, the better it can mine. The computer will be used to solve complicated mathematical problems. In return for assisting in the network, you will be rewarded in cryptocurrency coins.
Who mines cryptocurrency?
Before you randomly dive into this, you might want to ask yourself if you are ready to start mining. Mining requires you to dedicate some computational power to the network for an extended period of time. If you do not have much computational power, mining pools can be an option for you (a joint group of miners who combine computational power). In general, most of you will be best off by joining mining pools. The more serious miners (people with extremely high computer power) will be able to mine on their own. Since the first computer that can crack the mathematical problem will be rewarded, luck is also an important factor. However, the faster the computer, the more mathematical problems it can solve per second. Solving many mathematical problems per second will increase your chances of winning the mining lottery. Of course, you should also not forget that energy costs are a big factor while mining cryptocurrency. Before you start mining, you should check the return on investment. Depending on your electricity rate, it might not be worth it.
Since most individuals lack the required hardware to make mining worthwhile, joining a mining pool would be the best choice. A mining pool allows users to combine (pool) their hashing power and split the earnings. After a while, all members of the mining pool will be rewarded equivalent to their contribution. If you would like to try a mining pool, you can check out Slushpool and F2pool .
Where to start?
For those who are adamant and want to try crypto mining without mining pools, there are different possibilities. Meaning that, before knowing where to begin, you need to decided what kind of miner you would like to be. Although nearly any computer can run the software, there is a big difference in how good the computer will be in solving the equations. Below we will explain the most common ways to mine crypto.
1. GPU mining
The Graphics Processing Unit (GPU) of a computer is the component in a computer that delivers the horsepower needed to mine. Those GPU’s are normally created for high quality video gaming or video editing. However, they also happen to be very effective at solving mathematical problems. With this way of mining, your GPU will be pushed to the limits, performing at 100% of its power at all times in order to mine cryptocurrency.
2. CPU mining
Some coins can be mined with your Central Processing Unit (CPU). Back in the days, this method was way more common than it is today. CPU mining can only be done with specific coins like ZCash (ZEC) .
3. Mining rigs
Mining rigs (also called ASIC computers) are made to mine cryptocurrency. Anything other than mining is impossible with these machines. Mining rigs are often very expansive. However, they are very efficient when it comes to mining. These machines do cost a lot of electricity though. Also, not all networks accept ASIC computers. Meaning you should pay attention on what coin you would like to mine before buying a mining rig.
4. Cloud mining
With cloud mining you don’t need powerful hardware in order to join the mining pool. Basically, somebody else has already bought this for you, and you are the person renting a piece of that power. Since this form of mining is done via cloud, it reduces issues such as maintenance of equipment or direct energy costs. Even though this all sounds great, you can expect this way of mining to be less profitable then other mining options.
Cons of mining
Of course, Of course, free money doesn’t exist. You always have to assume that your computer will be unusable while it is mining. Also, you need to let the computer run for a long period of time, without breaks. Meaning your computer will be claimed for a while. As we already mentioned above, you should also consider the electricity cost in your area before you start mining. Keep in mind that when your mining rig or PC is always running at full capacity, it also brings extra bills that you have to pay.
If you want to let your idle computer make some extra money for you, or you are looking for extra ways to earn money while you sleep, than mining is a great opportunity for you. Mining can be done in many different ways. For most users, GPU mining on their home rigs and mining pools will be the most efficient and easiest way to start crypto mining. Depending on the platform you decide to use and the coin you want to mine, guides will be available.