Mining, miner, mine: you've probably heard these words many times. With the emergence of cryptocurrencies, they have become well-established in the information field.
Mining, in simple terms, is the process of acquiring cryptocurrencies. It involves creating new coins by verifying transactions on the blockchain network and adding coins to the ledger.
In essence, cryptocurrency mining has two main goals:
- Generating crypto (an obvious and understandable goal), the ultimate earning - the main goal of the miner;
- Verifying the legitimacy of transactions (you can review the transaction history on the blockchain).
Bitcoin is most often mined. We will explain the mining process using it as an example.
To start, a miner needs powerful equipment. A simple laptop won't cut it. In this case, you can spend a lot of time. You need something more powerful.
In addition to hardware, a miner needs to download special software before starting and purchase equipment, which depends on the currency to be mined.
Another crucial point that every miner considers is electricity. The tariff should be the most favorable, as the equipment runs 24/7. By the way, the significant power consumption is considered a major downside of mining, not only in terms of costs but also from an environmental perspective.
So, a Bitcoin miner, with the help of equipment, software, and high electricity costs, solves crypto-hash problems (automatically). Bitcoin transactions undergo verification on the network and are added to the ledger. Miners are rewarded with bitcoins for these actions.
A bit more about the process itself. A block is linked to a hash. To calculate one block in the chain, you need to find the hash of the previous block. This is a challenging task even for a computer (hence, powerful equipment is crucial here). Moreover, the more blocks have been calculated previously, the harder it becomes to calculate subsequent blocks (although the crypto price tends to rise in such cases, even though the quantity decreases).
Some find it easier to mine with pools. Essentially, it's mining as part of a team with other people. In this case, the computing power of all users (of a specific pool) is combined, and each miner receives their task. This is a reliable way to earn from mining. However, there is a fee involved.
When mining with graphics cards, all you need to do is download the software, add your wallet to it, and start it. Of course, you'll need to invest in equipment - a reliable power supply, graphics cards, a motherboard, and risers. 4 GB of RAM is sufficient.
But if buying hardware is not for you, you can try 'cloud' mining. In this case, you rent computing power from data centers. The advantages in this case are evident: no noise from equipment and fewer initial costs. However, you will have to pay a fee and be more nervous, as you won't be able to control the mining process. Moreover, there is a chance of falling victim to scammers.
We recommend approaching the mining process thoughtfully. Evaluate which option suits you best, weigh all the pros and cons, and finally, start earning.