Cryptocurrency is the hottest new form of a financial asset. It is based and operates on the blockchain technology which works as a decentralized digital database. Any transaction is recorded in the blockchain (price, asset, and ownership) and then verified and settled across all nodes in the network.
In simple terms, blockchain is a time-stamped series of immutable blocks of data that is encrypted and not owned by any single entity. Each of these blocks is bound to each other using cryptographic principles.
Now, when you know why cryptocurrencies are so special, you are probably thinking about maybe becoming a crypto miner. You are not wrong if you are. Cryptocurrency mining for beginners may seem like a big challenge. It is not actually, but you will have to do your homework first. Beginners checklist for mining any cryptocurrency looks something like this: a computer, the internet, and a special piece of software.
Of course, you can probably learn all you need just by listening to the audiobook “Cryptocurrency: Mining, Investing, and Trading in Blockchain for Beginners.” But if you don’t have time or money, here it goes.
Choose a coin
First things come first. To start mining cryptocurrency, you need to choose a coin that suits you best. You can use a mining profitability calculator to check how profitable your operation will be for each cryptocurrency you are considering. You enter the necessary details, and the calculator shows the most beneficial solution. This way, you will be able to see the future profit per day, month, or year.
Another important aspect of deciding what coin to pursue is the project’s potential. You should consider whether the profitable coin today will remain as such in a year or two. Sure, coins like Ethereum or Bitcoin will probably never lose any steam, but it is hardly true for many others.
Bitcoin is the king. It is number one, and its market capitalization is enormous. But it doesn’t mean that it is the best choice in terms of profit. There are so many miners mining Bitcoin already that you probably don’t stand a chance unless you can spend millions on hardware.
Ethereum is another story, and it differs in terms of mining from Bitcoin. But what is more important, it has a huge potential. There are rumors that the next Uber or Airbnb can very well be created using decentralized apps on the Ethereum platform. If anything like this happens and proves to be successful, the value of Ethereum will go sky-high.
Monero is one of the most successful “private coins.” Plenty of users buy and sell things with Monero on the dark web. Sometimes even entire nations like North Korea, for example. But there are many examples of legal applications of privacy-focused coins as well. One of the best things about Monero, though, is that you can still mine using CPUs or GPUs. It is also very easy to set up a Monero mining operation, which makes Monero an excellent choice for absolute beginners. And the same goes for Zcash.
Of course, there are many more coins to choose from.
Hardware and software
Early miners had it easy. They could mine using just their PCs and make good profits from that. But today, mining major cryptocurrencies requires expensive advanced hardware to generate at least a reasonable income. You have to invest money to make money. Either that or you won’t have much success in mining.
Before selecting appropriate tools, you should decide which particular coins you are going to mine. As a rule, different software is used to mine with different hardware (CPU, PU, or ASIC). Also, various software can show different results when mining with the same hardware.
CGMiner is one of the most popular mining programs for GPU/FPGA/ASIC. It is available for Windows, Linux and OS X. It doesn’t have a GUI, but it is easy to control even from a console since it contains detailed instructions, and equipment is connected automatically. What is more important is that this program allows you to use your machine at full capacity.
Another interesting miner is Claymore – the first software that introduced the dual mining function. It supports mining on AMD and NVIDIA simultaneously. With Claymore, you can mine many coins like Ether, ZCash, Bitcoin, Monero, and Litecoin.
To mine or not to mine
Before you can answer this question, there are several things you should take into account. Mining requires a lot of electricity. So you would be better off if you decide to mine in low-cost regions such as Eastern Europe. You should also be ready to invest as much as $5K, depending on cryptocurrency miners you choose. And even then, you are probably many months away from the point where you will be able to break even. So should you start mining? You certainly should, but only the right decisions will help you make any money. And if you know how to play your cards right, you can make a fortune mining.