How To Mine Cryptocurrency:
If you are new to Crypto Mining, I would assume you’re fairly new to the crypto world in general and came across of it once the prices skyrocketed in the recent months. How to mine cryptocurrency for beginner. Before getting in to topic, let me shortly run-down what cryptocurrency is?
Cryptocurrency is a digital asset just like your dollars except that it runs fully digital it does not have a bank or any central entity that controls it hence why it’s called decentralized and that is one of the main pros of cryptocurrency there are many cryptocurrencies that are newly released but generally as a miner we only focus on the profitable ones. I will leave a link below for an article that explains it really well. Now let’s talk about cryptocurrency mining
“Crypto mining is a process in which a machine performs certain tasks to obtain a little bit of cryptocurrency. Cryptocurrency Mining is the process of validating transactions and minting new coins from block.”
Ways of Mining:
There are two different ways to mine one is proof of work and the other is proof of stake.
Proof of Work:
Proof of Work is what all the different mining hardware falls under such as gpu rigs a6 fpgas etc the mining hardware solves randomly generated complex puzzles using electricity and computational power and then you’ll get compensated once you find the right solution.
Proof of stake:
Proof of stake is in a way being a shareholder owning a certain number of certain cryptocurrency to then be able to launch a node and that will be validating transactions and minting new coins out of the blocks usually these nodes need a minimum number of coins to create one in some scenarios your coins are locked out and you can’t move them around but there’s also soft staking which is more flexible fpc needs to be on 24 7 to keep your node online but it can be any laptop or PC as long as it’s up 24 7 with a stable internet connection.
There are many different algorithms that cryptocurrencies fall under algorithms are basically different arenas of puzzles so some mining hardware can excel better at certain coins with certain algorithms more than other coins the measurement for your mining power is your hash rate the hash is considered the solution attempt to the puzzle so if your hash rate is 30 mega hash then you’re doing 30 million solution attempts a second.
Different Types of Mining Rigs:
l mentioned before there are different types of mining rigs. So, let’s go through these different types of rigs and explain them briefly.
A6 are known as application specific integrated circuits and they are mostly used to mine certain coins with a high output of computational power as well as a high electric consumption now by mining a specific coin. If you buy for example an s19 it provides a computational power of 110 terahash and consumes 3 250 watts but it can only mine coins that use the shot 256 algorithm such as bitcoin with such immense hash rate your profits will still seem low due to the network difficulty which we will explain later.
In GPU mining use graphic cards to be able to get more computational power so the more and better GPUS that you have the more mining power you have and this option is the most residential friendly.
FPGAS are basically what’s in between the a6 and the GPU miners so they’re made for a handful of algorithms they can’t mine every coin but some of them can and they’re very similar to GPUS but they are more efficient and more profitable to some extent. FPGA miners are very similar to GPU miners so these two options are residential friendly in a way.
There are some other different types of mining. Such as USB mining CPU mining as well as storage mining where you can mine with your hard drive. Since there is a lot of information to cover on them so hopefully in the near future. I’ll have share an article on every type of mining rig so that you can get more information regarding to these topics.
Now that we wrapped up the different type of mining rigs we can go ahead and move on to the different type of mining services. So, as for mining services mean that is cloud mining hosting as well as GPU rental or buying pre-built rigs.
Mining cryptocurrency can be a little bit tough for you if you have to pay the electricity bill it can get really hefty so what you’ll need to look for is somebody credible or somebody that you trust that can host for you. And what that means is that you’ll basically have your rigs run at someone’s else’s place.
Cloud mining to the most part it’s usually unreliable there are many scenarios that people get handed the bad end of a stick in cloud mining. Since your money is going to a third-party Services. that should be giving you hash power in return but you never know when these services will close on you or leave there’s a lot of ones that are Scammy. I wouldn’t use a service for cloud mining it’s better to just build your own rig and then there’s also hosting. You can also buy pre-built rigs. But hosting can be useful if your electricity is very expensive.
What Impacts your Mining Profits:
So, now let’s get to the important parts what impacts your mining profits what makes you make more money what makes you lose money and all that stuff the first thing about your mining profits is knowing what crypto coin you should mine now depending on what you’re using whether it’s ACICS, FGPS or GPUS. You’ll have a different coin of your own to pick and mine. We are going to focus on GPU mining.
To know what cryptocurrency you should be mining with your GPUS that depends on what GPUS you have so there is this thing called the Dag file. Dag file is basically a data set that’s stored on the rams of the GPUS and these data sets size increases over time, that means some GPUS for example the four gigabyte cards can’t mine Ethereum anymore because the Dag size is larger than four gigabytes. That’s the importance of the Dag file that’s why it’s recommended to buy GPUS with six gigabyte v ram or more to mine Ethereum.
I’m just going to give you my opinion on them this is not a financial advice but it’s just my opinion on these platforms and maybe you can benefit from it.