How does mining cryptocurrencies work?
How does mining cryptocurrencies work?

By jordanjnr | Crypto Digest | 5 Dec 2019


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We've all heard the term mining at least 100 times this year.

Mining this, miners did that.

What the heck is mining cryptocurrencies and why should you even care?

Well,mining is a process in which your computer's CPU,GPU or both solve a series of complex mathematical problems.

But you're not the only one solving these problems,as it's a race between many miners on the blockchain who try to solve these problems as fast as possible.

Many factors influence the speed at which they solve these problems, but we'll revisit that later in this article.

When a winner is crowned in the solving in the problem, that winner is awarded with a certain amount of the cryptocurrency he mined.

It's as simple as that.

But of course there are complex parts.

Just way too complex for one article. Or two.

What you really need to know is that mining is the major way cryptocurrencies are introduced into the market.

In fact, it's the only way cryptocurrencies are introduced into the market(save for special coins like centralised ones and stable coins).

So,what do you need to become a cryptocurrency miner?

You'll need to create your own mini mining farm(or join an already created one)[For context,a mining farm consists of a bunch of GPUs all trying to solve the math problems at the same time,yielding more power and giving the owner a higher probability of earning the cryptocurrency first. ]if you want to go crazy,or just plug in an old PC that's connected to the internet and just let it keep mining.

Of course if you use the last method,you'd probably get 4 dollars a year.

Why?

Because the integrated GPUs on that old computer wouldn't be enough,or nearly enough to beat the expensive GPUs all trying to solve the same problem in the smallest amount of time.

 

Now,mining as an occupation could be really expensive if you don't know what you're doing.

For starters,a classic ASIC machine(used for mining bitcoin exclusively) costs anywhere from a thousand dollars above. And you'd need at least 5 of these to make any significant gains.

And don't forget that these things guzzle electricity a lot. So keep that in mind.

So how do you counteract these problems if you really want to be a miner?

Well,you could join a cloud mining platform.

A cloud mining platform is one in which you pay money to use the mining equipment of another miner,and at the end of a certain time period,you get a share of the profits that came from mining.

It sounds very cool,but many of these services turned out to be scams,and disappeared with investors' money. 

If you've made up your mind that cloud mining is your way,be sure to do your own research for the best cloud mining platforms.

I(linked one above. I have been researching that particular one and it seems to be quite legit,but I could be wrong. But they have a free plan,so there's really nothing to lose if it doesn't work out.)

Of course,cloud mining can only be really profitable if you put a substantial amount into it. It might pay off even more to buy your own mining gear.

Now you know what mining is,how it works and how you could become one yourself.

That's it for this post!

Thanks for reading,and have a nice day.

If you find this post educative, entertaining or relevant,kindly leave a tip below to support my work. Thanks.


jordanjnr
jordanjnr

Hello! I am a Blockchain enthusiast,bitcoin investor,CEO of BigTycoon group and I love crypto! Hit me up @TycoontechBlog on twitter!


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