Cryptocurrency Mining – What Is, How It Works, Mining Rig, Profitability, Hardware and Software
5 (100%) 6 vote[s]
Beginner’s Guide to Cryptocurrency Mining: Almost a decade has passed since Cryptocurrency mining saw the light of the day, but as far as penetration of the practice is concerned, it is way below expectations. Restricting its reach to just the crème de la crème, it has barely penetrated to the lower rungs. More so, owing to the inflationary gap created by the high end hardware dealers by marking technology surrounding mining at sky high prices. In fact, their capitalist interests received a boost on realizing that besides gaming, AMD graphic cards and other super efficient processors serve even the Crypto mining crave!
Cryptocurrency Mining Explained – Unearthing Profit from the Crypto Quarry
What is Cryptocurrency Mining:Mining is a computationally intensive process that computers comprising a cryptocurrency network complete to verify the transaction record, called the blockchain, and receive digital coins in return (see “What Bitcoin Is, and Why It Matters”).
Cryptocurrency mining, or cryptomining, is a process in which transactions for various forms of cryptocurrency are verified and added to the blockchain digital ledger. Also known as cryptocoin mining, altcoin mining, or Bitcoin mining (for the most popular form of cryptocurrency, Bitcoin), cryptocurrency mining has increased both as a topic and activity as cryptocurrency usage itself has grown exponentially in the last few years.
How does Cryptocurrency Mining Work – Cryptocurrency Mining Explained
It is important to first understand Nitty Gritties before You Kick Start the Game about The layers and intricacies of what is cryptocurrency mining and how to start mining cryptocurrency. To start with, mining is the process using which transactions are put through verification before adding to the ledger to be distributed termed as blockchain. They are responsible for minting new coins as well. The procedure includes compilation of transactions into blocks by solving critical jigsaws. The fastest participant who can crack the brainteaser is entitled to place the next block and claim the incentive. The returns comprise the collective value of transaction fees in association with the block compilation and the new coin released.
Now, understanding how cryptocurrency mining works is quite a rocket science! Figuring out that cryptocurrency mining algorithm- a hexadecimal 64 digit number(hash), that is nearly equal or less than the target hash is not a ball game at all and requires the sheer art of prophesying coupled with a high computing power in order to scale the target fastest. This demands a high hashrate, measured in terms of mega, giga and tera hashes. So, we see the claim of being able to solve complex numerical problems is just a hoax!
Another definition from Webopedia,
Each time a cryptocurrency transaction is made, a cryptocurrency miner is responsible for ensuring the authenticity of information and updating the blockchain with the transaction.
The mining process itself involves competing with other cryptominers to solve complicated mathematical problems with cryptographic hash functions that are associated with a block containing the transaction data.
The first cryptocurrency miner to crack the code is rewarded by being able to authorize the transaction, and in return for the service provided, cryptominers earn small amounts of cryptocurrency of their own.
In order to be competitive with other crypto miners, though, a cryptocurrency miner needs a computer with specialized hardware.
By mining, you can earn cryptocurrency without having to put down money for it. That said, you certainly don’t have to be a miner to own crypto.
You can also buy crypto using fiat currency (USD, EUR, JPY, etc); you can trade it on an exchange like Binance, Bittrex, Bitfinex, Bitstamp using other crypto (example: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or by publishing blog posts on platforms that pay its users in crypto.
An example of the latter is Steemit, which is kind of like Medium except that users can reward bloggers by paying them in a proprietary cryptocurrency called Steem. Steem can then be traded elsewhere for Bitcoin.
For the beginner, Litecoins, Dogecoins, Bytecoins, Cardano, Ethereum Classic and Feather coins are recommended Scrypt-based cryptocurrencies with the best cost-benefit, with Litecoins giving a miner between 50 cents to $10 per day, when using consumer level hardware, which has an upfront cost of around $1,000.
Mining for cryptocurrencies deliver more attractive returns with more sizeable upfront investment in hardware, with a $3,000 to $5,000 investment in hardware delivering $50 per day or more in income.
The upside for beginners mining Litecoins could come from a bounce in cryptocurrency value, though this shouldn’t be the basis for mining and miners shouldn’t place their hopes on such an outcome. The better option being to invest in cryptocurrencies and hold in the more traditional way rather than get involved in mining.
So, to get started, there is a list of requirements to get into mining for Litecoins, Dogecoins, Steem and / or Feather coins:
Create a coin wallet, which is password protected and holds the earnings from mining, while also keeping a network wide ledge of transactions.
A mining software package made up of cgminer and stratum.
Membership at an online mining pool, where the pooling of hardware resources will increase profitability and stability of returns.
Membership to an online currency exchange, where coins can be exchanged for cash and vice-versa.
A full time internet connection with at least 2 MB per second.
A location to setup the hardware, which will need to be somewhere cool.
A desktop or mining rig, with a separate dedicated computer recommended, as mining and gaming cannot run at the same time.
An ATI graphics processing card (GPU) or an ASIC mining chip, the cost of which can be up to $3,000 each for new or $90 for used.
A house fan to keep the mining computer cool, which is essential for mining success.
If the above is infeasible, then cloud mining is an alternative.
Best Cryptocurrency Mining Hardware and Software – Enrich Your Technical Competence – Mining Rig, Mining Pools
Any individual with the right technical set up can participate in mining, on the condition that there is a scope of technical upgradation for an enhanced performance and effective mining- in case the number of participants increases. Cryptocurrency mining hardware includes a powerful processor, a high end GPU and if required- an array of GPUs functioning in tandem as well as chips especially architecture for mining.
Earlier it was a cake walk to carry out Cryptocurrency mining with CPU. But, at present, with the increase in the difficulty level, the mavericks started off Cryptocurrency mining with GPU, in which, series of computers were aligned in order to mine digital currency, making it tougher for the commoners to contend.
The entire set up costs you dearly owing to the high responsiveness it boasts, besides the extent of wattage spent on running the system 24X7. It is often expressed in dismay, a considerable share of incentives earned through mining cryptocurrency is invested in the process. Besides the hardware, Cryptocurrency mining software are integrated to ease up managing crypto-mining. If you are a pro, you might as well use free OS such as linux and use a proficient text only program like CGminer. But, you too have an access to a far simpler alternative that works on Windows 10- a GUI like MultiMiner. So, in case you are all set with your mining rig, go ahead, take a plunge into the mining pool and freely share resources at your disposal in order to receive a percentage of your mining profits
Cryptocurrency Mining Pools
What is a Miner Pool: In the context of cryptocurrency mining, a mining pool is the 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. A “share” is awarded to members of the mining pool who present a valid partial proof-of-work. Mining in pools began when the difficulty for mining increased to the point where it could take centuries for slower miners to generate a block. [Wikipedia]
Slush Pool is the oldest currently active mining pool.
AntPool is the largest currently active mining pool.
In case you are wondering what cryptocurrency mining rig and mining pool is- a rig is an integrated system set up designed and operated to specifically mine cryptocurrency, whereas, a mining pool refers to the club of resources created by miners who share their processing abilities over a network splitting returns as per the contribution towards probability to find a block.
Top 5 Bitcoin/Cryptocurrency Mining Pools
The list is presented in descending order of the bitcoin blocks found by the particular mining pool in the last six months, as per statistics available on portals like Blocktrail and Blockchain.info.
5. Slush Pool
Build Your Own Crypto Mining Rig
If cloud mining is not your thing and you would rather own an operate your own rig We have some good resources, have been saving up for our own build. Here is a quick list of all the avenues we have found to build or buy your own mining rig:
Howtomine – This blog has a good amount of articles about building your own rigs and the walkthroughs are pretty detailed with pictures. (https://howtomine.co/)
CryptoMine News – While this is mostly a cryptocurrency mining news website, they have a good section on building your own rig with articles from a lot of popular websites all in one place. (https://www.cryptominenews.com/)
Youtube – Of course, there are a ton of good videos on youtube about building your own rig. I don’t have any in particular, but this is always a great resource. (http://www.youtube.com/)
Amazon – If you are looking for parts for your cryptocurrency mining rigs, you can easily found that at particular selection of Amazon. (https://www.amazon.com/)
PICKING THE PARTS FOR AN ETHEREUM MINING RIG
GRAPHIC CARDS (GPUS) FOR MINING
When it comes to picking GPUs, you want the select the best bang for the buck. You’re looking for something with high hashrate, low cost, and low power usage.
You can start with as little as 1 GPU or as much as 8 GPUs within one rig.
For mining, the best balance for each GPU is to have a high hashrate (the speed which it can mine) with a low power consumption.
Below are the best GPUs for mining Ethereum. Listed from best to worst considering hash rate and power consumption.
Radeon RX Vega 64 – 33 MH/s using 200 watts <- The Best GPU for Mining
Radeon RX Vega 56 – 31 MH/s using 190 watts
GeForce GTX 1080 TI – 32 MH/s using 200 watts
Radeon Rx 580 – 25 MH/s using 175 watts
Radeon Rx 480 – 24 MH/s using 170 watts
Geforce GTX 1070 – 27 MH/s using 200 watts
Radeon Rx 570 – 22 MH/s using 125 watts
Radeon Rx 470 – 21 MH/s using 120 watts
Geforce GTX 1060 – 20 MH/s using 110 watts
Radeon R9 290x – 28 MH/s using 280 watts
Tips for profitable mining of Cryptocurrencies
Increase the number of graphics cards and include high powerful graphics.
Try to cut the Electrical consumption as much as possible.
Join only the top mining pool.
For better gains mine only when the difficulty level is average or low.
The greater the hash rate the more the profits you’ll be able the make.
How much can a miner earn from mining Bitcoin?
Bitcoin are mined in units called “blocks.” As of the time of writing, the reward for completing a block is 12.5 Bitcoin. At average price OR, today’s price of about $10,000 per Bitcoin, this means you’d earn (12.5 x 10,000)=$125,000.
When Bitcoin was first mined in 2009, mining one block would earn you 50 BTC. In 2012, this was halved to 25 BTC. in 2016, this was halved to the current level of 12.5 BTC. In 2020 or so, the reward size will be halved again to 6.25 BTC.
A number of sites, including Blockchain.info, will give you that information in real time about “How many blocks have been mined so far?”
Cryptocurrency Mining 2018 – Cryptocurrency Cloud Mining – Paradigm Shift in the Changing Time
Now that we are well versed with the sophisticated process of Cryptocurrency mining, it is time to zero down upon the newest techniques of crytocurrency mining 2018. To us, mining Cryptocurrency is a matter of speculation which is bound to experience an upheaval owing to the erratic moves that are similar to the spikes of the capital market. Mining trends have undergone major transition in the last couple of years directly impacting the cryptocurrency miners. Previous techniques of mining have been rendered obsolete, ushering a dawn in the crypto market.
Among the new bees, cloud mining happens to be a jargon that has become the talk of the town. A comparatively costlier, but effective mining strategy, this requires cutting edge equipment often let out to final consumer on lease by companies with powerful datacenters. As soon as you become a signatory to the contract, mining companies like Bit Miner, Hashflare, OxBtc, etc., offer access to mine cryptocurrency. Cloud mining is not only reliable, but also a convenient form of kickstarting mining. Among the drawbacks, sudden hacks and security breach are the plausible, miners rights are restricted from having a say in the commission offered for mining, lastly, under the circumstance of losses uncalled for, data centers might be compelled to pay back loss in order to recover.
Best Cryptocurrency to Mine – Most Profitable Cryptocurrency to Mine 2018
Best Cryptocurrency to Mine 2018: The current mining standards have created substantial market for graphic cards that facilitate a mining farms. The most popular models being the products of Nvidia corporation. This has lead to the massive rise in the shares (about 88% in 2017) of the company owing to its seamless deliverable used in – Most profitable Cryptocurrency to mine like Bitcoin mining, Ethereum mining, Ripple mining, Litecoin mining, Electroneum mining, Ethereum Classic mining, Electroneum Mining, Dogecoin mining, Siacoin mining, Bytecoin mining, Monero mining, Zcash mining and the process related to other equally integral players. About 6.7% of Nvidia’s revenue received from dedicated graphic card sales in the second quarter of 2017 was specifically used for cryptocurrency mining. Companies like Asus as well as AMD have devoted their investments on designing cards architectured especially for crypto mining.
Best Cryptocurrency to Mine in 2018, 2019 & 2020
Mining Cryptocurrency is becoming so popular day by day. Almost everybody knows about Bitcoin and it’s value in the market. Obviously, they also want to mine that to make some good amount of buck and what about difficulty level, when everyone will be behind Bitcoin Mining! Very high to think. That’s the main reason, there are more Altcoins and Cryptocurrencies available for you to mine with GPU and CPU. Your role is to select some of the Best from them, which price can easily increase time to time corresponding to Bitcoin value & price charts. Choosing the best cryptocurrency to mine in 2018 depends on certain factors like your time horizons (short-term and long-term) and many other factors. Making the right choice is important to mine cryptocurrency beneficially in 2018, 2019, 2020 & further more years.
Here’re some Bitcoin alternatives Cryptocurrencies to mine in 2018, 2019 & 2020. They are easy to mine at the current scenario of market and promises high profitability till the year 2020.
2. Ethereum Classic (ETC)
3. Cardano (ADA)
4. Electroneum (ETN)
5. Dogecoin (DOGE)
6. Zcash (ZEC)
7. Monero (XMR)
8. Ripple (XRP)
10. LISK (LSK)
12. Ethereum (ETH)
14. Litecoin (LTC)
15. SiaCoin (SC)
Easiest Cryptocurrency to Mine in 2018, 2019 & 2020
Below we are providing you the Cryptocurrencies you can still mine with your CPU/GPU in 2018. In 2018, there still exists some cryptocurrencies that you can mine with your CPU, or with a simple graphic card (GPU). The list includes coins that belong to the CryptoNote family and some other newer altcoins.
1. Bytecoin (BCN)
2. Monero XMR)
3. Ethereum (ETH)
4. Electroneum (ETN)
5. ZenCash (ZEN)
6. Dashcoin (DSH)
7. FantomCoin (FCN)
8. DigitalNote (XDN)
9. Ethereum Classic (ETC)
10. GridCoin (GRC)
11. CureCoin (CURE)
Key points before involving into Mining Cryptocurrency
All Crypto currencies are right now in not at niche level, There is no such guarantee you can predict for a particular currencies but there are few factors you may wanted to keep in mind while investing in any currency. These factors might be following:
Purpose of the Coin;
Minds and hands behind that coin;
Available & circulating supply (Our suggestion is not to go with currencies whos supply is in 12 digit except
those currencies with strong backing);
Always go through white papers;
By keeping these things in mind and going with a keen google search you might get notable profit with your investment.
Cryptocurrency Mining Calculator – Best Calculator to check Mining Profitability
There are many Cryptocurrency mining calculators available in the market. But, we’re providing you the Best ones from them. Must check out list of Cryptocurrency Mining Calculators and Profit Calculator to analyze your Profits.
Is Mining Cryptocurrency Worth It – Is Mining Cryptocurrency Legal ? – The Lurking Grey Ground of Regulation
Is Mining Cryptocurrency Profitable ?
Yes! It is profitable is you do it the right way. You’ll need to build a mining rig with high powerful resources to make some amazing profits. if you want to know how much Ethereum mining can be profitable, then read the following context.
In order to mine Ethereum in an efficient manner you’ll need to keep certain things perfect. such as,
Mine only when the difficulty level is low or average.
Join the top mining pool.
Make sure you use high powered graphics.
Make sure the electrical consumption is less.
Make sure the hash rate is high.
Is Mining Cryptocurrency worth it ?
For checking the worth, you need to focus on some important things. The things that you have to have in mind before beginning mining are:
1. Cryptocurrency of choice:
Are you mining Bitcoin or Ether? Bitcoin mining with GPU is never profitable now because of the expenses of power consumption compared to the lower hashrate of GPUs against ASICs.
2. GPU of choice:
AMD Radeon RX 470/480 or Radeon RX 570/580
These GPU’s are the craze and you will need a whole rig of them to support your mining(5–7 are a good start).
3. Power Consumption:
What is the price per wattage in your country?
4. Pool Fees:
How many percentage of the earnings does your pool take?
These are all factors that you have to have in mind before starting to think about your mining profits and worth.
If you’re looking to mine Ethereum, always use the calculators provided above to determine the values.
Is Mining Cryptocurrency Legal ?
Legality of bitcoin/cryptocurrencies varies by country (territory) to country. Whereas the majority of countries do not make the usage of bitcoin itself illegal, its status as money (or a commodity) varies, with differing regulatory implications. Likewise, various government agencies, departments, and courts have classified bitcoins differently. While this article provides the legal status of bitcoin, regulations and bans that apply to this cryptocurrency likely extend to similar systems as well.
Details by Union, Country or Territory
1. European Union = Legal
2. G7 = Legal
3. Algeria = Illegal
4. Morocco = Legal
5. Nigeria = Legal
6. South Africa = Legal
7. Namibia = Legal
8. Zimbabwe = Legal
9. Canda = Legal / Banking Ban
10. United States = Legal
11. Mexico = Legal
12. Nicaragua = Legal
13. Costa Rica = Legal
14. Jamaica = Legal
15. Trinidad and Tobago = Legal
16. Argentina = Legal
17. Bolivia = Illegal
18. Brazil = Legal
19. Chile = Legal
20. Colombia = Legal
21. Ecuador = Illegal
22. Kyrgyzstan = Legal
23. Cyprus = Legal
24. United Arab Emirates = Legal
25. Israel = Legal
26. Saudi Arabia = Legal
27. Jordan = Legal
28. Lebanon = Legal
29. Turkey = Legal
30. Iran = Legal
31. Bangladesh = Illegal
32. India = Legal / Banking Ban
33. Nepal = Illegal
34. Pakistan = Legal
35. China (PRC) = Legal
36. Hong Kong = Legal
37. Japan = Legal
38. South Korea = Legal
39. Taiwan = Legal
40. Cambodia = Legal
41. Indonesia = Legal (trade/hold) / Illegal (payment tool)
42. Malaysia = Legal
43. Philippines = Legal
44. Singapore = Legal
45. Thailand = Legal / Banking Ban
46. Vietnam = Legal (trade/hold) / Illegal (payment tool)
47. Austria = Legal
48. Croatia = Legal
49. Czech Republic = Legal
50. Germany = Legal
51. Poland = Legal
52. Romania = Legal
53. Slovakia = Legal
54. Slovenia = Legal
55. Switzerland = Legal
56. Ukraine = Legal
57. Denmark = Legal
58. Estonia = Legal
59. Finland = Legal
60. Iceland = Legal
61. Lithuania = Legal
62. Norway = Legal
63. Russia = Legal
64. Sweden = Legal
65. Bosnia and Herzegovina = Legal
66. Bulgaria = Legal
67. Greece = Legal
68. Italy = Legal
69. Malta = Legal
70. Macedonia = Illegal
71. Portugal = Legal
72. Spain = Legal
73. Belgium = Legal
74. France = Legal
75. Ireland = Legal
76. Luxembourg = Legal
77. Netherlands = Legal
78. United Kingdom = Legal
79. Australia = Legal
80. New Zealand = Legal
As far as the global scenario is considered, cryptocurrency lacks well defined regulations endorsing which can lead to implications. In fact the question whether mining Cryptocurrency is legal leads us to diverse responses owing to the fact that a fewer countries have almost banned it, while others do not seem to give a clean chit, nor crucify it. Some authorities have entitled it to be a value of exchange, but have not acknowledged it to be legal currency. Often this grey zone becomes the sole reason for the intermittent doldrums in the Crypto market- often leading it to the verge of being called an eye wash or a scam in the absence of a regulatory stance.