Mining cryptocurrencies has become quite a popular endeavor these days. Ever since Bitcoin entered the market back in 2009, people’s interest in digital currency has been increasing. Today, Bitcoin is one of the most valuable cryptos, and a lot of people are mining it.
Of course, there are thousands of other cryptos that could also be mined, but people usually opt for Bitcoin, as it has the best profit margin. So what does mining cryptos actually mean?
Simply put, you connect your hardware to the blockchain to solve complex mathematical algorithms and in exchange, you get rewarded with cryptos. Sounds easy enough, but the process is a bit more complex than it meets the eye. That said, for those of you who are just starting out as miners, here’s a beginner’s guide to crypto mining.
Research minable cryptos
As mentioned before, there are thousands of cryptos in the market that can be mined. People usually decide which ones to opt for based on their market share and value.
That makes Bitcoin the obvious choice. It’s important to note that the number of Bitcoin in existence is finite. Out of 21 million Bitcoins that were created, 18.4 million have already been mined. That leaves only 2.6 million Bitcoins left to be mined.
But don’t let that discourage you because the value of the remaining Bitcoins is high enough to make mining quite profitable. However, this little fact does make mining a bit more complicated than it was. After you’ve researched all the cryptos that show promise of profitability after mining, it’s time to work on your hardware.
Get yourself a proper mining hardware
Back in the day, you’d have to build a custom PC specifically designed for mining cryptos. Nowadays, there’s pre-made hardware created for this purpose only that you can invest in. There are various models and manufacturers of such hardware, and you want to take some time to research them all.
Therefore, if you decide to mine Bitcoins, it would be a good idea to opt for the best Bitcoin mining hardware. That way, you can ensure that your mining endeavor is turning profit. When deciding on hardware, you should check the hash rate. This indicates the blockchain’s network processing power, as well as the number of times the network itself can attempt to solve the mathematical problem per second.
Also, make sure you get an ASIC (Application Specific Integrated Circuit) hardware as these rigs have high mining performance. Last but not least, you must check the power efficiency of your hardware. Mining draws a lot of power, and you don’t want your electricity bill to exceed your mining profits.
Join a mining pool
A mining pool is a group of people that share resources, hardware, and efforts to help the blockchain solve a problem. Afterward, they also split the reward. Joining one of these pools is essential because, on your own, you have little chance of mining anything at all.
The main reason is that your hardware alone can’t help the blockchain much but a lot of people joining together is another story. However, joining a mining pool means you have to pay a fee to be able to join, in the first place. This may reduce your incomes by a small amount but it provides you with consistent incomes in return.
Another reason for joining the pool is that it’s the only shot you have to compete against large mining farms that try to exploit the system and take the reward for themselves. That said, research available mining pools and join one that suits you the best. After that, it’s only a matter of time before you see the fruit of your labor.
Obtain a wallet
Mined cryptos have to be stored somewhere as they are, indeed, digital assets. If you’re mining Bitcoins, you’ll need a Bitcoin wallet. The same goes for any other crypto you decide to mine. Only a few wallets can store multiple cryptos at the same time.
Bitcoins, for example, are still stored in the blockchain, so you get a unique address that consists of matching public and private keys. This means that you get an address for every Bitcoin in your wallet, and you can manage them from there.
Now, even though the blockchain is virtually impossible to hack, your wallet, on the other hand, is where your cryptos are most vulnerable from cyber attacks. That’s why it’s of vital importance to secure your wallet the best way possible. It’s recommended that you use MFA (Multi-Factor Authentication) method to additionally secure your crypto wallet. If you lose a private key, you lose your cryptos forever.
Mining cryptos can be very profitable if you know what you’re doing. In the beginning, it may not seem like the effort is worth it, but you’ll have to endure a bit before you start seeing viable results. Therefore, research your option, obtain a wallet and hardware and try it out for yourself.