Cryptocurrency mining is the process of using a computer, phone, tablet, smart tv (Yes, a smart tv) and really any device with a processor to crunch complicated algorithms to produce digital currency.
In 2009 during the birth of Bitcoin ($BTC) and the cryptosphere people would use their home PC and its processor to crunch these equations. At the time doing so was not very lucrative but it was very efficient. Crypto was not yet known outside some forums and the public had no idea that a new form of currency was being created.
Mining Bitcoin ($BTC) and other SHA-256 algorithm coins is now an impossible task with one’s processor. As the years went on technology did what it does and it improved leaps and bounds. Today people can mine using specialized machines called ASICs (Application-Specific Integrated Circuit).
So what do you need to do BEFORE you even turn on your machine?
1. Do some research
Why are you mining? Is it a hobby? Do you want a second source of income? Do you plan on making it your only source of income? If you are trying to get rich quick then mining probably isn’t for you. Having bills to pay on the 1st of the month and relying on your earnings to do so will have debt collectors at your door in no time. Mining is a long-term game. Anyone can get lucky, mine a no name random coin with a small market cap and all of a sudden it goes crazy. It’s true. How likely that is to happen, well it’s not a long shot but it is pretty rare. Miners tend to focus on major coins like Bitcoin ($BTC), LiteCoin ($LTC), Ethereum ($ETH) and a few others because they have an established network, liquidity, community, market cap, and can be found on every major exchange. Miners will then have a pet project coin they honestly believe in and finally they’ll have the random coins they mine to mine just to shill. You should stick to major coins to start and as you read more and learn about these coins, their projects, and communities gravitate to something you feel has a future.
There are over 1500 different cryptocurrencies. You need to find the ones that will retain value. You know they will when the coin itself serves a purpose. It improves, fixes, or creates a new technology to stay relevant.
And remember, regardless of the fiat price, 1 Bitcoin = 1 Bitcoin. That is the one true constant. So will you mine for a fiat value or to accumulate satoshis.
2. Create a wallet(s) for your coins and open an exchange account(s)
Once you’ve decided what coins you’d like to go after go get yourself a wallet and open a few different exchange accounts. Wallets can live on your computer, device, exchange, usb stick or on paper. I would not recommend you keep large amounts of your assets in an exchange or on your mobile devices as they can be hacked, broken, or stolen. Paper wallets are a nice backup to print and store while usb wallets tend to be the safest as they are offline. Once you have your wallets join a few different exchanges. This is so that you have options. Different exchanges have different coins, prices, and policies. Some won’t trade certain pairs and others won’t let you buy or sell in certain regions. When it comes to pulling money in fiat you also need to make sure the exchange complies with your countries laws. Some exchanges will not link to banks but instead mail you prepaid debit cards. When choosing your exchange you want to find one that is trustworthy and whose fees won’t kill you. Most exchanges have tiny trading fees but they get you on fiat deposits and withdrawals.
3. Your target is set. Its time to pick your equipment.
You have your coins in mind and your wallets ready to rock. Now its time to decide the approach based on your coin’s algorithm. We will go into detail later but here is where you decide what machine will mine your coin the fastest, cheapest and most efficient way possible.
4. Location. Location. Location.
You’ve picked your coin(s). You’ve picked your gear but where are you going to put it? A simple mining PC can go anywhere without noise or electrical problems but what about custom built rigs and ASICs? If you decided to cloud mine then no big deal. All you need is an Internet capable device and a connection but what about everything else? GPU mining rigs can get hot and loud. ASICs can get hotter and louder. 80db+ loud. Imagine a vacuum cleaner being held to your face. That’s the sound of an ASIC crunching numbers. Then think about the weather, electrical prices, and the surrounding area. Do you live in a dry dessert area that will burn your gear, cost you a ton in electricity, and then be so loud your neighbors issue complaints? Those all sound like terrible things.
Still want to mine cryptocurrency?
By Albert Aguilera @Angry_Albert