Well it has again been a little while since I've written a mining article, this being number 15 and considered a update/replacement for my original VTC mining article posted back in Feb 2020 (has it only been a year!!). You may wonder who this article is aimed at, as you may often have heard that Crypto-Mining can be unprofitable for hobby miners. Well that is fair, and without substantial equipment you may not make a lot, but this is an excellent way to learn about the fundamentals that underpin cryptocurrencies (more specifically Proof-of-Work projects) and help to make our decentralized trust free system of digital payments possible. This is for anyone who is interested in learning about mining, having a go and perhaps making a few VTC in the process. If someone then asks you later how to mine, you can tell them the basics and how they can also get started with learning. The better educated folks are about cryptocurrencies, the easier it is to drive adoption.
If you're interested at having a go at mining some other coins then check out the rest of my blog site: https://mynima.github.io/CPU_GPU_Mining/.
Before I begin please remember I take no responsibility for any issues you run into if you try this at home (be smart download mining software at your own risk). This is for informational and fun purposes only; I don't claim to be an expert. If you're reading this and you are more experienced and spot any issues, by all means point it out in the comments and I'll try make the necessary updates.
Step 0: What is Mining?
As mentioned in the introduction mining is a term often used to describe the actions surrounding network management for Proof-of-Work (PoW) consensus cryptocurrencies. But what does that mean? Well, in its simplest form, it works like this:
- A blockchain is really just a distributed ledger (think big old notebook) of all the transactions (and therefore account balances) of the activity on the network
- When we send cryptocurrency from one address to another on chain we effectively add a transaction to the back of the queue and wait for it to get transcribed into the ledger
- The job of the miners is to do the transcribing. Indeed, they take a group of recently submitted transactions and group them together to be added to the end of the blockchain (as a new block).
- The block is distributed throughout the network and following confirmation that the transactions are valid (i.e. person A has the funds they are trying to send to person B) consensus is reached and this is the new state of the ledger is updated by adding this to the end of the chain
OK so the basics look straight forward right, the job of the miner is to group all the transaction and update the blockchain for us, brilliant. But then you may ask yourself, "What is in it for the Miners?". It is true, it would be great to have a system that ran on trust and good faith (we tried that though and it doesn't work too well). So how do we incentivize miners to maintain the blockchain for us?
- Firstly, miners are given a block reward (i.e. a bunch of native tokens for successfully completing new blocks)
- Secondly, when we submit transaction on a chain there is a fee (though it should be nothing like ETH has!!) these fees encourage miners to pick which transactions to go into blocks first and get added to the block reward.
Great, so now we have a blockchain and it is being maintained by miners whom are being paid block rewards and transaction fees to keep everything running ship shape. But now the next question, "How does the network pick which miner gets to add the blocks and get paid and what is to stop us mining all the blocks in one go?". Well that is where the concept of 'Proof-of-Work' comes into the process.
- The blocks are created at a set rate that is determined by the amount of mining resources on the network and the rate is maintained by increasing or decreasing the difficult level that miners need to achieve to be in with a chance of being picked to complete the blocks
- Without going into too much detail miners set computing resources at the task of guessing repeatedly in order to hopefully stumble on a sequence of numbers/letters (hash) that meets the networks required difficult level
- It is assumed that for a miner to have successfully beat other miners in the guessing game they must have put in a reasonable amount of work (i.e. have shown proof of work) or perhaps they were just really lucky
- In order to curb the luck element miners increase their compute resources and try tip the odds in their favour (like rolling a fist full of dice hoping for a 6, rather than just rolling 1 over and over).
Right so we have a ledger, maintained miners and decentralized consensus, that pays those that maintain it for putting in the hard work. It really is as simple as that. So how can we jump in and have a go?
Step 1: The Wallet
Whenever you plan on mining cryptocurrencies the best place to start is with a wallet. For Vertcoin (VTC), this can be found at the link below. Note that Vertcoin is built on the original Bitcoin core code and therefore you will see some similarities between this wallet and the official BTC wallet, if you've downloaded it in the past.
Once you have downloaded the wallet and it is installed it will begin the process of downloading and completing the blockchain and you'll likely see a screen like below. Either go get a cup of tea or move on to the next step but it can take a little while, based on your connection, to finish this step.
Step 2: The Mining Software
Next up, and one of the main reasons I urge anyone interested in having a go at mining to consider VTC, is the mining software. As of block 1,500,000 the Vertcoin network successfully forked from the previous LyraREv2 mining algorithm to it's own purpose built ASIC resistant VertHASH algorithm. With that the developers over on the project revisited and updated one of the easiest mining software tools on the market the 'OneClickMiner'
For this guide we're going to make use of this excellent software and go fetch it from the official GitHub site here:
Once you have found the latest version and download it to a secure area and extract it.
If you do not see the above .EXE file when extracting it is possible that your virus software intercepted this. It is standard practice for a lot of mining software so you need to make sure you add an exception for that folder. Once you are ready you can double click the executable file and it will start the process set up, you will see something like this below (it took about 10-15mins for me, good excuse for a quick break).
Once it is done you will be prompted (if it is the first time setting up) to create a password. Make sure you store this in a secure password location so as to avoid getting locked out of the miner at a later date. Then it will jump straight to mining but let's look at the pool setting first.
Step 3: The Pools
Because OCM really is a one click solution it doesn't need much more setting up. However, there are options for us built in. These can be found in the setting tab which look like this.
Note here the 'Mining Pool' section is a dropdown with 4 options currently:
- Hashalot.net - 2.0% fee
- Suprnova - 1.0% fee
- P2Pool - 1.0% fee
- Zergpool - 0.5% fee
All you need to do is select your preferred choice and then click 'Save & Restart' to swap it over.
Step 4: Mining
If you're happy with the pool set up as it is then that is it you are done. Easy as pie!
Congratulations you're mining VTC!!
But hang on , how do you get paid? In order to organize your payouts for the OCM you will need to get your chosen address sorted, this is easy enough to do. Let's go back to the wallet that was downloaded for step 1 and follow these steps:
- 1.) Click on 'Receive' on the top function bar of the main wallet screen.
- 2.) Click on 'Create new receiving address' to generate a new address for the wallet and close the pop-up that appears
- 3a.) Click on the Window menu bar then navigate to 'Receiving addresses'
- 3b.) You will see the new address here and can re-label it so that when you receive transactions to that address it shows up with the name in the main wallet screen (I often set it to something like 'Mining Address') then right-click the address portion and click copy to add to your clipboard.
With the address in hand we need to go to the 'Send Coins' tab of the mining. Paste the address in to the 'Receiver Address' box and then type in your password and hit send. The fund should arrive in your wallet in no time at all.
There is no need for you to keep the main wallet open while mining, though I recommend opening it every now and then to keep it up to date with the blockchain. Also regularly keep an eye out for updated versions.
This is one of the easiest mining setups out there and the pressure on your PC shouldn't be over the top for this algorithm (since it is more space dependent rather than compute resources dependent).
If you want to see how profitable you are then check out http://WhatToMine.com here is what mine currently looks like by comparison with ETC hash and KawPoW for my 4GB RX580 card, not too shabby for this ol' gal.
Hope you enjoyed the guide, good luck y'all!