Cryptocurrencies are gaining a lot of credence with more and more people accepting them. Ultimately, people are developing interest in the new and strange world of blockchain. Many people are developing interest in digital currencies because they are believing that they can make money from them. If you are one among them, then you should also know about cryptocurrency mining.
There are many ways to mine cryptocurrency. Let’s understand in detail about cryptocurrency mining, the ways of mining, and which cryptocurrencies can be mined.
What is Crypto Mining?
Cryptocurrency mining is a process of solving complex mathematical problems to obtain a little bit of cryptocurrency. Let’s say you have a machine that mines cryptocurrencies. There are various types of machines that will help you mine cryptocurrencies. Suppose you’re using your personal computer and trying to mine cryptocurrencies.
Your PC will perform specific tasks to obtain even the slightest amount of cryptocurrencies. These tasks are called “Proof of Work” which aim to create a fair playing field for all the miners. These tasks are nothing but complex mathematical equations.
Miners are the basis of a cryptocurrency network. It is because they spend their time and computing power to solve these equations. When more and more crypto miners begin joining the process, the mathematical problems will automatically become more complex. It means more time and computational power is required to solve them and the rewards get smaller. Crypto Miners receive rewards for mining cryptocurrencies. The rewards are in the form of cryptocurrencies.
While you have a brief idea of what is cryptocurrency mining, its time to to understand how to mine cryptocurrency.
How to mine cryptocurrency?
You can mine cryptocurrencies through various ways, which involves Cloud Mining, CPU Mining, GPU Mining and ASIC Mining. Let’s have a detailed look at each of them.
Cloud Mining is one of the popular ways to mine cryptocurrencies. In Cloud mining, you have to pay a specific amount of money and rent out their machine called “rig”. Te rent will be applicable for an agreed-upon time. In meantime all the earnings that rig makes except the electricity and maintenance cost are transferred to your wallet.
The people who offer cloud mining services will have huge mining facilities with multiple farms at their disposal. They are the ones who perfectly know how to mine cryptocurrencies. Cloud mining is so popular because it allows the people with less money or rigs to participate in crypto world.
Cloud mining offers the miners with free as well as paid options. Naturally, many people would choose the “free” options. But these options have a few drawbacks like very slow mining speeds, extra conditions, etc.
In paid cloud mining you will find cloud mining host online. It has four or five plans ranging from the cheapest to the most expensive one. Some of these hosts offers you the ability to create and customize your cloud mining plan.
Once you decide among the free and paid version, you perform the transaction, register your cryptocurrency wallet code and you proceed with the first steps to mine cryptocurrencies. Different plans costs different amount of money. The plans can range from $500 up to $5000. These plans can last from two years to a lifetime.
CPU mining uses processors to mine cryptocurrencies. Earlier this was the viable option for miners, but now very few people choose this method of mining. It is because CPU mining is too slow. It takes months for processing and not a small amount of revenue is generated.
CPU Mining is not a worthy process, because you generate very small revenue and spend ten times more amount on the electricity and cooling used in the process. Then, why do people use CPU mining?
It is because CPU mining requires only a desktop computer to begin the process. Laptops can also be used, but it is strongly not recommended to use because the laptop may fry and overheat in a couple of hours. As it is an easy process to start, miners are attracted to the CPU mining process.
GPU is the most popular method of mining cryptocurrencies. Cloud miners use GPU rigs for their services. GPU mining is an efficient and relatively cheap process. The construction of GPU rigs is quite costly, but when it comes to its hash speed and general workforce, the GPU mining rig works great.
This mining process uses graphic cards to mine cryptocurrencies. A standard rig comprises a processor, a motherboard, cooling, rig frame and a few (2 – 8) graphics cards. The price of a GPU mining rig will be around the range of $3000. Although it’s a high investment, it will generate revenue much faster than the CPU mining process.
Application-Specific Integrated Circuits (ASICs) are the devices designed to perform crypto mining. ASIC is the prominent method of mining cryptocurrencies, as it generates huge amounts of cryptocurrencies when compared to GPU and CPU mining. As ASICs are powerful, they’re capable of robbing other miners who use GPU or CPU rigs.
The Best Mining Method
The best method for you depends on various factors like, how much you’re willing to spend, do you want to own a rig or do you want to do it with a rig.
Generally, GPU and cloud mining processes are the two methods which most of the miners use. The CPU on the other hand is slow and tedious. While ASIC mining is quite unpredictable.
If you wish to build your rig, then GPU mining will be better for you. If you don’t want to spend even a small amount of money, then CPU mining can be your choice. If you can take risks, then ASICs will work great. Finally, if you don’t want anything, neither the rigs nor the type of machinery, then cloud mining is the best choice.
Crypto Miners are those who independently verify transactions on a coin’s network. When they successfully verify these transactions more coins are generated. Miners keep the network running and increase the coin’s global supply. Miners choose this mining process as a hobby or for profit.