Despite the fact that cryptocurrency appeared eight years ago, it gained the most popularity in the post-Soviet space at the beginning of this year. An unprecedented excitement flared up around her, and many Internet users literally rushed to study what blockchain, pool, bitcoin are. And they also began to find out where to start cryptocurrency mining. To date, quite a few films about this phenomenon have already been made, which are translated into Russian and are in the public domain. They can hardly be called a guide to mining (mining) bitcoin or any other virtual currency. That is why we will tell you today about what cryptocurrency mining is in simple words.
What is cryptocurrency?
Speaking more intelligibly, then cryptocurrency is a digital banknote that has cryptographic protection. A new unit appears in the process of solving complex mathematical algorithms and consists of one hundred million parts, each of which carries a unique cryptographic code (signature). I immediately want to note the fact that it is impossible to fake a digital currency, since information about each unique cryptographic signature is copied and stored on all computers involved in the mining (mining) of cryptocurrency.
Cryptocurrency has only a digital form. It is impossible to touch, put in a purse or a safe in a bank. The main advantage of such money is that it is decentralized and not under the control of any state or institution.
The number of coins created is strictly limited, it cannot be changed. Everyone can know for sure when the last bitcoin, for example, will be mined. Controlled emission gradually complicates and slows down the mining process, and also eliminates such problematic phenomena as inflation.
The value of digital money is directly dependent on demand. The more investors show interest in a particular cryptocurrency, having invested a substantial amount in its development, the more expensive it will cost. State banknotes are backed by gold reserves, and cryptocurrency is backed by investments.
What is cryptocurrency mining in simple words?
We have already mentioned that cryptocurrency appears as a result of solving complex mathematical algorithms. It is not possible for an ordinary person to cope effectively with such tasks, which is why for this purpose they began to use the computing power of a computer, and the process itself was called mining.
During mining of cryptocurrency on a PC that is connected to the Internet and is involved in the cryptocurrency system, information comes in the form of blocks (blockchains). Such blocks contain a huge number of algorithms that need to be processed and get the only correct solution. Each decision is a digital signature for a specific information cell located in the block. And also it is the very cryptographic protection against hacking.
The blocks themselves appear as a result of transactions using a certain type of cryptocurrency. For example, if someone paid for a purchase in an online store using Bitcoin, and your equipment is configured to mine Bitcoin cryptocurrency, then it will immediately determine this transaction and will contribute to its completion by solving all the same algorithms. And you will receive a reward in the form of several hundred Satoshi (1 Bitcoin = 100,000,000 Satoshi).
The first steps in mining
We hope that we managed to explain in simple words what cryptocurrency mining is. If you decide to start mining, for example, Ethereum or Bitcoin, it will be enough to have an idea of how the system works. Let's move on to the technical part and find out where to start cryptocurrency mining.
The most effective way to extract digital currency is mining using a video card. Just a few years ago, it was possible to earn several thousand bitcoins per day by using a weak video adapter and a simple processor for this purpose. However, the mining process of any popular cryptocurrency is constantly complicated. And in order to profit today from this kind of activity, you need to think about assembling the "farm".
"Farm"
The most profitable cryptocurrency for mining is Bitcoin, Ethereum and Littlecoin. The main capacities of miners around the world are directed to their extraction. Day by day, getting these coins becomes more difficult. In order to speed up the process, miners began to collect "farms" that have much in common with a regular computer, but significantly exceed it in performance.
To build a farm, you must acquire the following components:
- motherboard with the ability to connect multiple graphics cards;
- small hard drive;
- high frequency processor;
- one strip of RAM (4-8 GB);
- 4-8 video cards with video memory from 2 GB;
- powerful power supply (from 750 W);
- risers (extension adapters from the video card to the motherboard);
- additional cooling;
- start button;
- frame.
Video cards for the "farm"
The most optimal graphics cards for cryptocurrency mining in 2017 are considered to be Radeon RX 470. Having impressive characteristics, they cost significantly less than their closest competitors from Nvidia. However, giving preference to Radeon, you will have to think through a system of additional cooling, as these video adapters are heated much more than the same Nvidia. The average cost of a semi-professional “farm” working with four video cards is $ 2,300-2,700, which is pretty expensive for the average Russian citizen. However, with proper configuration and continuous operation, such a "farm" will pay for itself in 6-9 months and will start to bring you income.
Cryptocurrency mining step-by-step instructions
After the equipment has been bought, fixed in the frame and connected, you need to install all the necessary software. A step-by-step instruction on cryptocurrency mining is as follows:
- installation of an operating system;
- registering a wallet and receiving an address;
- client installation and configuration;
- pool selection.
OS and cryptocurrency wallets
Install the operating system in our "farm". Then we set up access to the Internet and set up a special wallet for digital currency. You can create a wallet for specific coins, for example, bitcoin. But we recommend using a universal one in which you can store absolutely any cryptocurrency.
Among those who are engaged in cryptocurrency mining, the following multicurrency wallet services have extremely positive reviews:
- MultiCoinWallet.
- HolyTransaction.
- NoobWallet.
- Cryptonator
- C-cex.com.
Cryptocurrency mining client software
Having chosen one of the services on which after registration you will be assigned a unique account address, you need to download the client program for the extraction of digital currency. To figure out which program is better for cryptocurrency mining, we will be helped by a rating based on the popularity of a particular client, which looks like this:
- 50miner . This program will not take up much space on your hard drive. With a rather small “weight”, it has all the necessary functionality, and a simple and pleasant interface will make setting up the client easy even for a beginner.
- BFGMiner . The most popular program in the post-Soviet space, as it has a Russian interface language. Setting up the client does not take much time, since everything is extremely clear. A distinctive feature of many other programs is the ability to control the cooling system. You can set the optimal rotation parameters for coolers.
- CGMiner . This client is perfect for those who perfectly know how cryptocurrency mining works, and also has an idea of the MS Dos OS. Using this utility, you can create your own pools, configure them, and also increase the performance of video cards installed in the "farm" by overclocking them. In order to use the program, you must have high-performance graphics cards.
- DiabloMiner . This program is popular among experienced miners who know MS Dos. To use the client, it is necessary to equip the "farm" with a high-speed processor and powerful graphics cards. In the process of mining, you can use the processing power of the processor and video adapters. Works with operating systems such as Mac, Linux, Windows.
- Bitminer . In terms of functionality, it is very similar to 50Miner. In order to start earning your first Satoshi, you do not need to install the program on a computer, just run the exe file from the downloaded folder. A serious minus of this client and 50Miner is the consumption of a large amount of RAM.
Pool selection
In our article, we have already talked about what cryptocurrency mining is . In simple words, it is making digital currency by using the computing power of your equipment. And they also said that this process is constantly becoming more complicated. In order to make mining more efficient, people are united in groups (pools).
After installing one of the programs for cryptocurrency mining , you will have the opportunity to join the work of one of the pools, which at the moment there are already about two thousand.
Choosing the right pool can be confusing for a beginner. After all, there are both simple groups that extract only one type of digital currency, and multiples, in which it is possible to earn several cryptocurrencies at once, for example, Bitcoin and Ethereum.
Before you connect to a particular pool, it is better to spend some time studying it. Give preference to those resources that have been working steadily for more than one year and have the largest number of positive reviews. Also pay attention to how the accumulated coins are paid out. In total there are about thirteen of them, but the following are more popular:
- PPLNS - all miners in the pool receive a profit, the size of which directly depends on the last number of invested shares.
- PPS - the resource determines the share of each pool member and pays for it according to the contract.
- PROP - the amount of payments is proportional to your share of power in a particular pool.
Best pools in 2017
From the moment cryptocurrency attracted the attention of millions of people, pools began to appear like mushrooms after rain. However, most services, unable to withstand competition, cease to exist. Many of them never returned the money they earned to people who used the computing power of their PCs in their pools. In order not to lose your own money, we recommend that you use only proven and most reliable sites. The rating of pools today looks like this:
- F2Pool.
- AntPool.
- MTC China.
- BW Pool.
- Bitfury.
Cryptocurrency cranes
Not everyone has the opportunity to allocate about $ 3,000 from the family budget for the assembly of the "farm". But this is not a reason to think that you will never become a miner. Today, there is a way whereby cryptocurrency mining without investments becomes real. This is exactly the opportunity provided by sites, which are called cryptocurrency cranes among miners.
The principle of operation of such resources is quite simple. You go to the site and perform one of the actions for which you receive a reward. For example, you may be asked to enter captcha, play a game, collect puzzles or watch some kind of video sequence, after which a certain number of coins will be credited to your account. It may seem to you that the owner of the resource is a rich and very generous person, but this is not so. The webmaster receives income from advertising that was posted on the site. The more visitors there are per day on its resource, the more the advertiser will pay for a place for a banner.
It will not work to earn much on such “cranes,” however, the collected funds can be reinvested in the purchase of capacities on resources offering cloud mining services. Such a scheme can be useful to people who do not know where to start cryptocurrency mining.
Top cryptocurrency cranes
In order not to waste time, we suggest you familiarize yourself with the list of the most reliable and generous “cranes”:
- Cryptoblox.
- Getmyfaucet.
- Cryptospout.
Today there are many such resources, but most of them are insolvent.