Today you cannot download a special programme on your laptop and mine Bitcoins via your device right away. The complexity of calculations necessary to find the algorithm (hash) has increased not only for the world’s first cryptocurrency but also for many other virtual coins. Mining of the leading cryptocurrencies has really become an industry for a short period of time. Today The Coin Shark will share some information on how to join this industry.
- What is “cryptocurrency mining”?
- Types of cryptocurrency mining
- Cloud mining
- What do you need to start mining
Cryptocurrency mining means finding the determined algorithm that is necessary to create new blocks in a cryptocurrency blockchain while making calculations. Successful mining results in creation of a new block in the blockchain – that’s how digital coins are issued. Miners get a reward for generating new blocks. Mining is the only way of coins’ emission for many cryptocurrencies (for example, Bitcoin, Ethereum, Litecoin, Dash etc.). However, some digital currencies do not have an option of cryptocurrency emission by users (for example, Ripple, Tether, etc.).
Provided the cryptocurrency type, there are different types of equipment used for its mining. Coins with low calculations complexity can be mined using the processing power of a device (computer or laptop). Historically, this type of mining was the first and was called CPU-mining.
Graphic cards are also used for mining. GPU-mining evolved later and its goal was to increase the power of computing operations as the complexity of mining increased. The necessary equipment includes graphic cards connected to the computer, coolers, input/output means and is called “mining farm”. It is no longer possible to mine Bitcoin with graphic cards, however, many altcoins (including, for instance Ethereum or Bitcoin Cash) can still be mined this way.
ASIC-mining – is a special technology initially created to advance Bitcoin mining. However, these specialized processors also allow mining of other coins (for example, Ethereum, Zcash, Namecoin, Bitcoin Cash, Litecoin, Dogecoin and many others). ASIC – is not a cryptocurrency industry invention. This technology was created at the beginning of the 1980s. Back then a british company Sinclair Research installed ASIC on personal computers to speed graphics performance.
ASIC – is a specialised microcircuit that does only one type of work and that is why it makes it better and quicker than microcircuits aimed at solving several problems simultaneously. ASIC-miners decepher algorithms for a new block creation dozens of times quicker than graphics cards and computer processors.
Users often join mining pools – groups of miners who unite their computing power for finding hash as soon as possible.
Mining equipment is expensive. Besides two graphics cards won’t be enough if you want a guarantee of getting a good reward. Moreover, equipment demands big amounts of electricity (so, electricity expenses increase a lot). Software must be installed and adjusted and devices’ work must be controlled. Besides, cryptocurrency mining equipment is rather noisy, so it won’t probably be a good idea to place them at home, which means you will also have to find a place to put your equipment. Cloud mining aims to help users avoid all those problems and still let them more or less benefit from cryptocurrency mining.
Cloud mining is basically a rent of cryptocurrency mining equipment and computing facilities owned by companies that operate huge data centers. In a nutshell, it is actually about making investments in the operation of big cryptocurrency mining “factories”. Cloud mining services are often provided by mining equipment manufacturers. Cryptocurrency mining pools also often provides opportunities for cloud mining. One of the most popular cloud mining services are, for example Hashflare, IQ mining, Genesis mining, etc.
If you decided to buy cryptocurrency mining equipment then you can purchase both graphic cards and ASIC-miners online. Then you need to download the necessary programs on your device, set the equipment and finally start mining. You can also join mining pools (Antpool, Slush pool, BTC.Com, viaBTC, f2pool, etc.), to increase the probability of getting a reward. Initially, pools provided Bitcoin mining, but then many other altcoins became available
If you decided not to purchase the equipment and deal with configuration and maintenance, you can choose a service for cloud mining, sign up, determine the amount of capacity that you want to rent, and start cloud mining.