Cryptocurrency is probably one of the most talked-about subjects in the world right now. This is because nobody really thought that such a type of digital currency would cease to exist in today’s world. Even though people think that they know everything about cryptocurrency but there are some aspects in which they do not have that much knowledge. One such factor that people have a hard time in comprehending is cryptocurrency mining. This is probably a term that most everyone is confused by as there is a lot involved in it. So here is cryptocurrency mining guide to help get rid of the questions you may be having about it and increasing your knowledge about cryptocurrencies.
As you may know that each time you conduct any type of transaction there is a third person or party who verifies that the transaction is legit. For example, if you were to send money from your bank account into any other persons account then the bank will verify this transaction to see that everything is correct and also that the transaction is successful. If the whole transaction is not justified then the result would be a failure. A similar case occurs when you sell or buy a cryptocurrency.
First of all, it should be noted that there is no business which is set up that will monitor the transaction relating to cryptocurrencies. So to see that your transaction is completed there are miners available in the world that will do this job. For example, if an individual is selling a Bitcoin to another person, then the whole transaction will be verified or justified by a miner. The miners act as banks in the whole transaction process.
Anyone can become a miner but they should have the right skill set for it and also the technology that they are used for the process should be up-to-date.
This can be a confusing task as there are a lot of aspects which are involved in this. So it will be discussed on the basis of a beginners guide to cryptocurrency. In this, it will be seen on how to set up cryptocurrency mining. More of a step by step process will be explained so that no one will get lost.
The first thing that should be done in cryptocurrency mining 2019, is to decide on the right Graphics Processing Unit. This is important because a lot of speed and the high processor is required. Before cryptocurrency became so popular you could mine coins with a simple gaming computer and the only important factor would be electricity. But since cryptocurrency has gained such popularity due to which more and more transaction is being conducted, the technology updates to match the speed of the transaction. Before it use to take a lot of time to conduct one single transaction but due to the introduction of GPUs, the whole process only takes about seconds.
The next step would be to see that a proper ASIC (application-specific integrated circuit) is chosen. This is done because each cryptocurrency out there has its own coin reference. There are many ASICs available in the market and you would have to choose your own one according to the coin that needs to be mined. One of such a company that manufactures such ASIC is known as Bitmain whose popularity is known by many miners.
Also, another thing that should be remembered is that before choosing any one of these to buy, decide on the coin that you wish to mine. Some of the altcoins in the market do not require such a high quality of the product to be purchased while others do. Also, remember that there are many other miners out there who will give you competition. The other fact is that this whole process will take a lot of electricity, so the electricity bill is expected to come out really high.
One of the main differences that are present is flexibility. The GPU is the one in which an individual can mine different types of cryptocurrencies. But in ASIC it is different as an individual can only mine a single cryptocurrency. So it should be carefully decided on which coin should be mined when using the ASIC as the only one can be picked. To do this a proper cryptocurrency market analysis should be done and news relating to the coin should be seen. Because of the coin is not going to make it in the future then buying such a technology would be a waste of time and money.
Another difference is that if a GPU is sold then it will have a high resale value than that of ASIC. This is because one can use the GPU for all the other currencies and buyers would be easier to find. But when an ASIC is sold then a person buying the same coin the ASIC was designed for needs to be found. This can become a hard task to accomplish.
The electricity that is taken up by the ASIC is usually very high, they are very large in size and also make a lot of noise that is unbearable. On the other hand, GPUs are small and can be used in an individual’s room easily. The only main benefit of ASIC is that if you are mining a cryptocurrency that has high value and awareness, like Bitcoin, then it will be more profitable as the focus will be only put on it.
There are many benefits which are involved with mining for cryptocurrencies such as:
As it can be understood that it will take a lot of time and effort for one person to mine a coin hence a mining pool is created. In this pool, there are many miners who work in collaboration so that resources can be shared and also the profits can also be shared. This is done so that more coins can be mined hence leading to higher cryptocurrency mining profits. China is considered to be one of the countries where pool mining occurs the most. It should be kept in mind that pool can also focus on a single cryptocurrency so if there choosing which coin that is to be mined will be the first step before choosing any pool.
There are some factors which an individual may want to consider in order to make sure that profits are received. One of the factors that should be looked out for while considering joining a pool is that see how much they are paying. One of the methods that are used by pool miners is pay per share in which they will give you some of the coins and keep the rest for themselves. Another factor that should be looked out for is that trust should be in a pool. If there is no trust between the pool members then the whole operation can go down.
There have been situations in which some people randomly join a pool without proper research and then reap the losses. This is because the coin that is to be mined may not be that successful in the future thus making a loss for the individuals.
So as it can be seen that it is worth mining cryptocurrency but before doing so there are some points that should be taken into consideration. Even though cryptocurrency is still not that much known in many countries but in some countries, it has started to be used as a medium of exchange. This is probably one of the biggest achievements that a new digital currency can have in the market. Mining is a profitable business that an individual can go into but they should be careful. They should understand how the whole mining process happens and what are the factors that should be seen. The article is written will help in understanding how to work as a miner. It can be concluded that cryptocurrency is not only limited to buy, selling or even making new coins but there are other factors which are involved, such as mining, which can benefit an individual a lot. This article is a kind of cryptocurrency mining guide which will help other people gain a better understanding of the whole mining process.