The theme of crypto currency and mining is relevant nowadays as never before. The rate of digital currency is growing every day and it is equivalent to this growing number of people who want to make money on it. The topic of crypto-currency is complicated in itself, but we will try to put everything to you in the simplest possible terms.
A little bit about the technology of blocking
To better understand the essence of mining, you must first understand the concept of “blockade.” Blocking is the basis of the crypto currency, which consists of a chain of blocks placed in a strict sequence. Blocks, in turn, are data on transactions, transactions and contracts within the system, presented in a cryptographic form.
That is, all information about any transactions is written to the block. The blocks are lined up in a chain and linked together. To record a new block, you need to consistently read information about the old blocks. All the data in the blockroom are accumulated and form a constantly updated database.
What is mining?
Mining is the process of mining the crypto currency. The term comes from English mining, which means the process of mining. The bottom line is that the miner (the person who is engaged in mining) with the help of special equipment, you need to perform a number of mathematical tasks and calculations to find a suitable hash and close the transaction block. A hash is a set of symbols that indicates some action performed by the user of the network and contains information about all previous actions (hashes). This means that it is almost impossible to replace information about previous transactions with blocking technology, because then you will have to change the entire history of actions from the very beginning.
Mining supports network operation, it guarantees its protection against duplicate transactions. Miners who “find” a suitable hash to close the block receive a reward in the form of a digital currency. Their activities ensure the functioning and integrity of the entire system. This is the main task of mining.
Main types of mining
Depending on the form and equipment used, it is possible to divide the mining into such types:
- Mining on video cards (GPU) is the most common and affordable option for a long time. It is relevant for most cryptonyms, including ether, dash and others. This method is effective only with powerful video cards, for example from Radeon or GeForce, and when using at least six video cards – such a mining farm is optimal in terms of revenues and expenses for the average miner. In addition to the number, the quality of the home GPU-farm is affected by the quality of video cards, which, in the context of mining, is determined by three key parameters: the speed of mining, the type and volume of memory.
- Mining on computer processors (CPU) is a very inefficient way to extract crypto currency. A conventional processor provides a very small resource for mining. This does not mean that you can not mend the processor, you can. But it’s pointless to build a full-fledged CPU farm. To process the enormous amount of information that is needed for successful mining today, investments in powerful processors in the amount of tens of thousands of dollars will be required – while mining on weak video cards of $ 400-500 will ensure the performance is not much lower. This method is relevant only for those who have access to a large number of computers and free electricity.
- Mining on the asics (ASIC). ASIC is an integrated circuit, specialized for solving a specific problem. These chips are made with a special architecture, sharpened for mining. Such devices have a high payback rate and are easy to maintain, therefore this method of mining is considered quite effective. But farms based on ASIC require large capital investments, because ASICs alone can not be called cheap. Another disadvantage is that it is much more difficult to service them, because the accompanying details on the market are not very common.
- Cloud mining is a method of extracting crypto currency on leased servers in a web format. When a user lives in a country with a high cost of electricity or technical knowledge is not enough to assemble the equipment himself and customize the software, he can pay companies money for renting equipment and remotely crypto currency. In this case, the miner does not need to buy expensive equipment and software himself, he extracts the crypto currency in the “cloud”. This is very convenient, but the possibility of fraud and hacking can not be ruled out. Therefore, before investing money, you need to study user feedback about the cloud company and all available information about it on the Internet and social networks.
- Mining on phones and laptops is probably the most inefficient way of mining. Even the most powerful models show minimal efficiency. For Android-Mining, a special program was released by the Minergate pool. You will not earn anything on android. With laptops, the situation is similar. This is perhaps a good way to get acquainted with mining through wi-fi.
- Hidden mining is a way of extracting a crypto currency using a program that automatically leads the mining process unnoticed by the user. That is, this third-party software, which is installed on the computer, uses its resources and lists all the earned funds to the developer’s wallet. The hidden miner is “glued” to regular files and is crooked by antivirus software. The best assemblies of such viruses are almost impossible to remove from the computer’s memory or to be detected by anti-virus software.
Before proceeding to the mining, it is necessary to make calculations and understand whether you will be able to extract profit from this occupation. To begin with, you need to consider your start-up capital. A budget of several thousand dollars is the minimum bar with which to begin. Although the cost of equipment can vary. But the price for new ASIC-miners does not fall below the $ 1,000 mark. Having decided on the budget, you can proceed with the selection of the crypto currency you want to mine and the method of mining.
At this stage, the most effective options for mining are two: through mining farms and ASIC. Farms can be configured in such a way that they automatically switch to mining the most profitable crypto currency. ASIC is just grounded for the extraction of one coin – Bitcoin, or Litecoin. But at the same time, mining mines terribly hum, they need to be cooled and equipped with powerful power units. And ASIC can work in any conditions and absolutely not bringing any such inconvenience.
When you decide on the method of mining, the next step is choosing the bitcoin-purse. Since bitcoins are crypto currency, you will need to store your money somewhere. Having started a wallet, it is very important to make sure there is a purse address.
For beginner miners, it is recommended to join the pools for mining.
Poole is a group of bitcoin-miners that have combined their computing resources to produce more bitcoins. In the pool you will need to perform small and less difficult algorithms, and thanks to collective efforts you will have more chances to execute a large algorithm and earn bitcoins that will be distributed among the pool members in proportion to their contribution to the common cause. As a result, you will be able to earn more bitcoins, and your investments will start to make a profit.
Is it worth starting to mine?
Calculate the efficiency and profitability of the production of crypto currency in the long term is almost impossible, because this process is influenced by fluctuating indicators:
- Crypto currency exchange rate;
- Complexity of mining;
- Tariffs for electricity;
- Cost of equipment;
- Equipment performance;
- Technical changes in crypto-currencies.
For today there is no definite opinion on whether it is worth starting to mine or already late to do it.
Both positions have supporters, both positions are supported by successful miners and financial analysts. Supporters of the opinion that it is too late to start the mine is based on the fact that under current conditions it is easy not to recoup investments or lose a source of income, and this concerns the most reliable currencies. Also, for a novice single-player to compete with industrial farms and ASIC-farms is difficult, and in the pools too much can not get. And to arrange your mining-farm, you need to spend very seriously.
Nevertheless, there are a lot of those who think that it is not too late to start mine. The rate of the Crypto currency is growing, which can bring tangible profits to the miner in the future. Among the new currencies there are interesting, promising samples. And this is only the beginning. Technological currencies will continue to appear, increase in price and overtake their predecessors, and therefore, if they are tracked and started to be mined in time before they are taken by the majority, you can make good money.