You don’t need much for crypto mining. Just a computer, the Internet and special software can be enough.
Mining is a process in which transactions are checked for compliance with certain network rules. The miners are encouraged by financial incentives to carry out the necessary checks. This is done through the fees charged by users for transactions and a special reward in the form of newly generated coins.
Which coins should be mined?
very lucrative | You should mine a coin where mining is particularly lucrative. For example, a mining profitability calculator can help you make the right choice. All you have to do is enter a few details and the calculator will show you what is most profitable. It will then show you the profit you can expect in a certain period of time.
potential | Another way to find the best coin for crypto mining is to analyse the long-term potential of the project. It may not be the most profitable coin today, but mining may pay off in the future. A coin like Ethereum would be an example of a project with potential.
new & unknown | It is also exciting to deal with coins that are new to the market. They are still quite unknown and allow easy mining, since there aren’t many miners interested in the project.
Crypto Mining Types
In most cases, crypto mining today requires advanced hardware to generate a good income. There are several ways to do mining. Here is a small list.
- ASIC Mining
ASIC is the abbreviation for Application-Specific Integrated Circuit. It is a microchip designed to execute the hashing algorithm as quickly as possible. It has the ability to perform calculations much faster than the best CPU. Coins like Bitcoin and Litecoin, for example, are based on ASIC mining.
- GPU Mining
GPU stands for Graphics Processing Unit. It is also called a graphics card. It is not as powerful as ASIC, but it can be used more flexibly. The GPU can work much faster than the CPU. To mine Bitcoin, you must have at least one graphics card on your computer.
- CPU Mining
When Bitcoin was introduced, CPU mining was the only way to win the coin. You had to use the Central Processing Unit (CPU) and the Bitcoin Core Wallet on your computer. This way you could produce about 100 Bitcoins per day. Nowadays it is no longer possible to mine Bitcoin with the help of the CPU. Today ASICs are used for this. But the CPU can be used for some other coins, for example for Zcash, Nexus or Reicoin.
How to start Crypto Mining?
It is not as difficult as many believe. The way it works is the same for most coins. There are three ways you can mine. Here is a little introduction:
- Pool Mining
The easiest and fastest way to get started. All participants within a mining pool work together to solve the mathematical puzzles and share the rewards within the pool. You have to pay a small amount to use the pool. This amount will be automatically paid and deducted from your revenue. It is usually between 1% and 3%. You should look for a pool with about 1% fee.
MinerGate – Mining Pools for different coins, free software
- Crypto Mining alone
To mine alone looks like a good idea at first glance. You don’t have to share rewards. You just turn on your computer and earn money. But that doesn’t work in reality. You compete with other people and only get the reward if you manage to solve the mathematical puzzle first. Mining alone is only profitable if you have many resources at your disposal.
- Cloud Mining Services
When you use a cloud service, you pay someone else to mine. You have to rent the necessary computing power. In return, you receive all the rewards that are achieved through mining. This means you don’t have to buy expensive equipment and don’t have to rely on cheap electricity. The Cloud Mining Service takes care of this.
- Browser Mining
There are various Internet browsers with built-in mining function. Mostly the Chrome Browser is used as basis. So you can use the internet as usual and participate in the mining of a crypto currency. The revenues are of course much lower than with other types of mining. But you use a browser anyway. Therefore it makes sense to use such a possibility.
CryptoTab – Chrome browser with mining function, according to its own data it has 9 million users
How much does the mining cost?
The costs vary according to your region and the coin you choose. In general, you should consider the following factors:
- Electricity costs
How much do you pay per kilowatt of electricity? You need to find out your electricity price. This is the only way to calculate your profitability. You will usually find the electricity price of your electricity supplier on your monthly electricity bill.
- Power consumption
Each miner consumes a different amount of energy. You need to determine the exact power consumption of your miner. Power consumption is also needed to calculate profitability. Power consumption is measured in watts. The corresponding value can be quickly researched by searching the Internet.
- Pool fees
If you work with a mining pool, then the pool will charge a certain percentage of your earnings as a fee. For most mining pools, this percentage is around 2%.
- Hardware costs
The cheaper you can buy the necessary hardware, the faster you will reach the break-even point. Also note the limited lifespan of the devices. Due to the heavy load in continuous operation, hardware has to be replaced from time to time.
- Crypto Mining requires a large amount of electricity due to the computing intensity and for cooling the devices. It is particularly profitable where electricity can be obtained very cheaply. Many miners are therefore active in regions such as Venezuela or Eastern Europe.
- Also the costs for the necessary hardware are a financial burden. The investment in good crypto currency miners can amount up to 5000 US dollars. Thus it can last several months, until the break-even point is reached.
- However, beginners can still earn a fortune by mining if they concentrate on Altcoins. Altcoins are all other coins, besides the Bitcoin.
- Since nobody knows how high the price will be in the future, it is difficult to predict whether the chosen coin will be profitable.
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