January 16, 2019 Knowledge Center

What Is Crypto Mining?

 

Bitcoin is the first thing that comes to mind at the mention of crypto mining. Those who are familiar with cryptocurrencies know that it is not just limited to a specific currency. So, what is crypto mining about?

In a nutshell, crypto mining is a process of verifying and adding new transactions to the blockchain network. This process uses high-powered computers and a special program that helps solve complicated mathematical puzzles. Mining cryptocurrencies sounds like a complicated process, and for a beginner, it could be difficult.

There are many types of cryptocurrencies and they all have different algorithms. However, the more miners there are present in a blockchain platform, the more difficult it is to get new coins because of the competition. Each cryptocurrency network is designed this way so that all the coins will not be mined immediately.

The number of each cryptocurrency is limited. For example, 21 million bitcoins were designed to be created in total. So, once everyone has mined all 21 million bitcoins in circulation, there would be nothing left. The same thing applies to other cryptocurrencies.

Mining for Bitcoins

The mining process is quite simple. However, doing it for profit is difficult. As previously mentioned, powerful computers are needed, not just the ordinary ones used at home. Besides that, electricity costs will be higher.  

If mining bitcoins is a hobby for the miner and they have the money for the required equipment, they can earn a few dollars each day. Aside from bitcoin, there are other cryptocurrencies that are more accessible and easier to mine. Some of these include Litecoins and Dogecoins.

To use this as a second source of income, the miner needs the following tools to prepare:

Crypto Wallet

It acts similarly to a physical wallet and keeps all the earnings made. It also records and keeps all transactions in a ledger. Even more, it is passworded so it is safe and secure.

Mining Software

Mining software allows miners to plug their hardware or mining rig into the internet to share their resources and receive a profit. Numerous pieces of software are available online for both MAC, Windows, and Linux-based computers.

Well-Ventilated Area

The miner will need a room big enough to place all the hardware. Make sure that the room has a strong air conditioner to prevent the hardware equipment from overheating. Mining is 24/7 so expect electricity costs to rise.

Graphics Processing Unit (GPU)

It is also called a specialized processing device. It’s a mining ASIC (Application-Specific Integrated Circuit) chip that provides mining power and accounting services.

Online Cryptocurrency Exchange Membership

A miner needs this to exchange their digital currency with a traditional one, and vice versa.

 

 

Share
There's more for you to read