What is cryptocurrency mining?
The essence of mining (from the word mining-mining) is the creation of cryptomonets by a special algorithm. A unique set of data (or block) is generated on the computer, which confirms the authenticity of payment transactions. A block consists of the header hash of the previous block, the transaction hash, and a random number. The chain containing all transactions is called the blockchain.
For each detected block is a reward. Different currencies it is different. For example, the oldest and most expensive cryptocurrency — bitcoin (Bitcoin, BTC) — it decreases twice every four years. Since 2016, the reward is 12.5 BTC (about 32 thousand dollars), in 2020 it will be the next decrease.
The reward for the Ethereum block (Ethereum, ETH) is 5 ETH (approximately $ 1,540).
The success of mining depends on the computing power of the computer that the miner has. The more, the higher the probability of getting a reward.
What you need for mining
- Collect equipment
Graphics card (GPU) — modern, not budget. And better not one, and several.
Computer (farm)with efficient cooling system, motherboard with the maximum possible number of slots for graphics cards. Processor can be any, steadily working. Recommended RAM-from 4 GB.
The most commonly used operating system is Microsoft Windows 10 Pro 64-bit. There are also OS, specially designed for the production of certain currencies. For example, ethOS for Ethereum.
Internet with good ping.
- Determine the cryptocurrency
The choice depends on your graphics card. The most popular cryptocurrencies among miners are Ethereum, Zcash, Monero. Bitcoin and Litecoin using video cards are no longer mined: for this there are specialized devices, such as ASIC (Application-specific Integrated Circuit).
Examples of video cards used for mining:
Nvidia GeForce GTX 1050 Ti/1050 and 1060, 1070, 1080 Ti/1080;
AMD Radeon RX 470/480 and 570/580.
Here you can see the main characteristics of video cards, learn their hashing speed (an important indicator for mining) and how quickly they pay off.
The average cost of a set for mining with five or six video cards (taking into account their sharp rise in price due to increased demand) today is about 200 thousand rubles. To this amount you need to add the cost of electricity (it will be consumed continuously), including air conditioning, as well as Internet.
- Choose a pool (server) for mining
There are quite a few pools. The main characteristics that affect the choice: ping, power, protection, ease of setup of the miner, the presence of a server in Russia, the ability to monitor, the size of the pool Commission (usually it is 1%) and the Commission from the transfer of crypto-coins to your wallet.
Recommended in the forums of miners pools: dwarfpool.com, www2.coinmine.pl, nanopool.org, 2miners.com.
- Choose an exchange or wallet, where the mined cryptocurrency will accumulate
There is only one advice: use only proven services, for which you need to study the reviews.
What is cloud mining
This is an investment in the purchase or lease of equipment necessary for the production of cryptocurrency. Physically, it will not be in your home. Configuration, connection and maintenance takes on a specially created service.
Revenue from cloud mining is proportional to the purchased or leased equipment.
At home, install not one, but several farms, most likely, will not work, since the equipment for mining is strongly heated. Any number of farms can be used remotely. Or do very small investments (minimum contracts for some services cost a little more than a dollar).
This method is recommended for those who are not technically savvy: it will be difficult to assemble and configure the equipment yourself. Or those who do not want to spend time on it and be tied to the house or premises where the farm is located.
Higher power compared to the home device.
The ability to mine bitcoins, as well as to produce several cryptocurrencies.
The risk of running into scammers.
The Commission, which is taken from the reward for production (it usually includes all costs, including possible damage to equipment, etc.).
The risk of hacker attacks on the server, as a result of which you can be left with nothing.
Strong resemblance to a pyramid scheme. Logically, services with their capacities are more profitable to produce cryptocurrency themselves, and not to give it to the side, even with a Commission. Referral programs speak in favor of this statement: many cloud mining services promise a reward for attracting new customers.
Is it worth mining
The attitude to cryptocurrencies is ambiguous, although their liquidity (ease of circulation in “live” money — rubles, dollars and so on) is now very high.
It is very difficult to know how much the cost of creating your own farm will pay off.
It depends on the rate of cryptocurrencies, the growing complexity of their production, the number of miners, which is constantly changing.
In General, the calculations made to date show that the equipment worth about a thousand dollars can pay off in six months or a year. If you invest in the creation of farms 3000-5 000 dollars, the profit may be 50 dollars or more per day. But this data can change dramatically (especially given the increase in the number of scammers).
To calculate the profitability of mining, you can use an online calculator.
Some experts believe that mining can be seen as an opportunity to generate a small additional income, but not as a way to get rich quickly and surely. Think of it as collecting gold dust, not gold nuggets.
Thus, to risk or not, everyone decides for himself.