Cryptocurrency mining has gained importance and popularity with the rising price of digital currencies like Bitcoin, Ripple, Litecoin and Bitcoin Cash. It is estimated that by the end of 2018 the energy used to mine just bitcoin will reach 0.5% of the world’s energy.
What is all the buzz about? Is crypto mining really profitable? What is the cryptocurrency mining?
Cryptocurrency is generated with the help of encryption techniques. An invention of the blockchain, a digital distributed public ledger, enabled a fraud-proof verification of fund transfers.
Bitcoins and altcoins act as a virtual medium of exchange for encrypted financial transactions, transfer of assets as well as making secure payments without having to go through a bank.
How much can I earn mining currency?
The price of Bitcoin has varied widely over the years. At the same time, the power of computers has improved considerably. For those you own a gaming PC, it is easier to earn money mining currency. On a Windows PC using NiceHash software and assuming a 0.10 USD/kWh in electricity costs, the monthly profits for select Nvidia GeForce cards and AMD Radeon are given below.
|Monthly Profits for Select Nvidia GrForce Cards||Monthly Profits for Select AMD Radeon Cards|
|Nvidia GTX 1080 Ti: $174.82||Radeon RX Vega 64: $123.08|
|Nvidia GTX 1080: $144.74||Radeon RX Vega 56: $112.36|
|Nvidia GTX 1070: $133.23||Radeon RX 580 8GB: $81.37|
|Nvidia GTX 1060 6GB: $89.03||Radeon RX 580 4GB: $68.72|
|Nvidia GTX 1060 3GB: $67.78||Radeon RX 570: $75.17|
|Nvidia GTX 1050 Ti: $45.98||Radeon RX 480 8GB: $90.49|
|Nvidia GTX 980 Ti: $117.46||Radeon RX 470: $79.92|
|Nvidia GTX 980: $84.08||Radeon RX 460: $30.96|
|Nvidia GTX 970: $80.31||Radeon R9 390: $82.50|
|Nvidia GTX 960: $45.09||Radeon RX 380X: $53.18|
|Nvidia GTX 750 Ti: $20.74||Radeon R9 290X: $70.18|
|Radeon HD 7950: $53.41|
|Radeon HD 7870: $27.33|
First of all, you do not have to put down money in order to start creating cryptocurrency. Gone are the days when you had to invest in expensive hardware and software to start your own mining rig.
What are the most popular cryptocurrencies to mine?
At the time this article is being written, Zencash or simply ZEN is proving to be one of the best currencies to mine with GPUs. The current supply of the currency in circulation is 4.2 million while the maximum supply is 21,000,000. If you wish to mine Zen, you will need a wallet such as a web, paper, mobile, and Linux wallets. Next, you will need to find an appropriate pool. Not all mining pools are equally profitable, so you must do some research to find the most lucrative and suitable pool for yourself.
Ethereum (ETH) is one of the most popular altcoins to mine today. After Bitcoin, Ethereum constitutes the largest currency in terms of market value. You can mine Ethereum using the AMD graphics card and Nvidia both. You can also try joining the EthereumPool, EtherMine or NanoPool for mining Ethereum.
There are still some cryptocurrencies that one can mine with CPU. CPU cryptocurrency mining is still being used for some altcoins, older coins and even newer ones launched during the last couple of years. CPU cryptocurrency mining is feasible with Bytecoin, Monero, Electroneum and even Ethereum.
While we talk about the most popular currencies to mine, the discussion would be incomplete if we do not mention the most well-known buy-and-sell cryptocurrency exchanges. The best exchanges to buy and sell altcoins include:
- KuCoin: One of the most popular exchanges which also happen to offer the mobile app. Their app is continuously updated which makes it one of the best in the industry.
- YoBit: YoBit is widely considered as a low cap coin heaven. It is a worldwide currency exchange that lets you buy and sell a wide range of digital currencies including all the major coins.
- Huobi: You will find many new cryptos at the Singapore-based Huobi exchange, which is the leading trading platform for cryptos in the world.
Most of the software for crypto mining available is dedicated to Bitcoin mining, other customizable, cross-platform software are also available, for example, CG Miner, Bitminter, BFG Miner and MultiMiner. They all have their own pros and cons, and an aspirant miner should pick the one most suitable to her unique needs.
Where is it illegal to mine cryptocurrency?
The legality of crypto mining varies from, country to country. While some countries are explicit about the legality of crypto mining and trading, others have outright banned or restricted its trading. The countries where you will find crypto mining absolutely illegal include Russia, Algeria, and Bolivia, while others such as China, Saudi Arabia, Mexico and Egypt restrict its trading.
How do I start mining cryptocurrency?
To start mining, you can either choose the cloud mining technique or personal mining.
Cloud mining involves renting mining hardware and having someone else do the mining for you. You will need to pick your mining company (you can check out CryptoCompare for a list of mining companies along with user reviews and ratings), choose a minimum package that you can afford to pay and then pick a mining pool. However, a word of caution here. Some cloud mining companies will sell you a contract on a pre-sale basis, which is something you should not go into. Pre-sale contract means the company is asking you to pay upfront for a contract that might not even start for weeks until the new hardware becomes available.
Personal mining, on the other hand, involves higher costs than cloud mining. Most coins including Bitcoin require specialized hardware and software and they are not cheap to either buy or run. Hence, personal mining is only recommended when you have calculated and considered all costs involved, including the electricity costs. For personal mining, you will need to select and buy your hardware first and foremost. You can either buy new equipment or second-hand, but mining hardware can burn out quite quickly so opting for older or used hardware might not prove to be a good bargain in the long run. The second step is to choose a mining pool. The best bet is to join a reputable and low-fee mining pool to give you a head start. Next, you should download the right software and link your hardware with a secured wallet.
While crypto mining hardware handles the actual mining process, crypto mining software is no less important. If you are a solo miner, you need software that can connect you to the blockchain. If you do pool mining, you need software to connect you to your mining pool. On the other hand, you do not need any software for cloud mining.
What are the risks of investing money in cryptocurrency?
Before you embark on your brand new career of crypto mining, it is always better to know the risks before you invest in cryptos. First of all, cryptos are neither backed by a central bank nor any government. You will not have the same protection as you have with a bank account.
The main risk is cryptocurrency price volatility. Crypto’s value can change abruptly, so the venture that is profitable today, can bring some losses tomorrow. On the other hand, although the price of cryptocurrencies moves up and down together, there are ones that perform better than others. Just like bitcoin now. You can always focus your mining powers on the coin that has the brightest future.