An Overview of Cryptocoin Mining
Is it a good time to ready the gear and walk to the mine?
So you’ve probably heard of it, some of your friends or colleagues may be doing it, or in any case, you are aware that some people here and there are doing it. Now it seems that most everyone is getting in on it, have been for a while and finally it is just natural that you may ask yourself: Should I get in on it?
If you had begun mining for Bitcoin back in 2009 or ‘10, when it was newly released, you would have been swimming in money by now, but then again – it’s easy to say that now. Along the timeline, cryptocurrencies experienced plenty of highs and lows, especially so in the case of Bitcoin. But if you are eager to know the gist of it – ever since then plenty of cryptocurrencies have emerged and if you take the time to study properly there’s a good chance you can get in on mining scryptcoins like Litecoin, Dogecoin Feathercoin. If you’re willing to invest a better deal into gear – Ehtereum is still keeping its spot at second to the top. Here we’ll attempt to look at the process, its applications, pros and cons.
What is mining and how does it happen?
Each and every day people are sending cryptocoins to each other over the web. As the base of the system is decentralized, it means that there’s no central authority to watch over these transactions so as to confirm them. In the case of the Bitcoin network, everyone has the list of transactions at all times and the network collects all the transactions for a given time frame into a list. This list is called a block. The role of the miner is to confirm these transactions and put them down into a general ledger. This general ledger is pretty much a long list of blocks, otherwise known as the blockchain. When a new block of transactions is created, it is added to the chain and miners put it through processing. The information in the block is taken and put through a mathematical formula, turning it into a compressed version – seemingly random sequence of numerals and letters. This is known as the hash and it has some interesting properties which it brings in the entire system. Each hash is unique, but for the generation of one hash information from the prior one is used. This way even if someone were to alter the information in the Bitcoin book – that would change the hash and every peer of the network will know.
That’s somewhat the general process of what miners do in the Bitcoin network. They seal blocks and compete with each other in doing so. But now Bitcoin has become impossible to mine. Unless you have your own building, equipped with its own power supply, and filled to the rims with processing hardware. Currencies such as Litecoins, Dogecoins and Feathercoins, and Ethereum, of course, are way more accessible to any inspired individual. At the current market, should one pursue to mine Litecoins, this can easily make for an income of between 50 cents to 10 USD daily, without spending rather insane amounts on hardware.
What to expect?
Most important of all would be having reasonable expectations. If you’re aiming at earning substantial amounts of money as a second income, you’d be better off buying cryptocoins with cash, rather than mining them, and save them, hoping that their value will spike at some point or another.
As suggested in the previous paragraph – one key role in this venture falls on the shoulders of your gear. The more processing power, the better perspective of earning some money. Having 4GPU video card power would probably put you somewhere between $8 and $10 per day, depending on the cryptocurrency of choice. But that’s not the only cogwheel in this mechanism. You should consider electricity costs too. To be a smart miner you’d need to keep electricity costs under $0.11 per kilowatt/hour, otherwise it would be a very long time before you even cover the money spent for the gear.
A word of warning
Some not-even-that-recent turns of events have gone to show that various junkware, modern malware software and even some website’s scripts today are written in an attempt to use user PC’s to mine cryptocurrencies, without the users knowing about it.
These scripts and software tap into your hardware resource and put it to work mining. You don’t get any profit out of this, which should be clear. The worst part being that, if you are like me and many others and your primary gateway to the web is a laptop, user level machines are simply not powerful enough to generate a profitable mining process. Even if you had decided to give mining a try on your own, using your laptop, it wouldn’t take you much time to realize that you’d be actually losing money. (Besides there are websites, which can calculate everything related to profitability, starting from your hardware resource and reaching up to your electricity costs.) So in the end you might end up with only one huge electricity bill.
Other than the aforementioned, these types of abuse tends to happen when you’ve set aside your PC. That’s also a fairly certain way to notice if you are being duped by such a software or script. Instead of the quiet, cool hum of, say, your laptops’ fans – its fans would be in full-blast, trying to cool down the fever.
In the end it all comes down to odds
So it does. Now you have some very general idea of what mining is and where it is at today. As mentioned in the beginning – should you be willing to invest a proper amount of time – to study each layer of the necessities – and a proper amount of money – on gear, cooling systems and electricity bills – and end up liking these odds you might be looking at a good opportunity. Judge wisely and read thoroughly, that’s the best advice we can give you!