The development of human civilization is impossible to imagine without money. Without this universal measure of the value of goods and services. As money at each stage of human development, various objects were used, such as weapons, stones, food and goods, and, finally, coins and banknotes. But the process cannot be stopped, and in the 21st century, electronic money became the main one. Now in the wallet, mainly plastic cards, and on the Internet there are many payment systems, for example, PayPal or WebMoney, created exclusively for electronic money circulation. But they can also give way to leadership of the new "money" - cryptocurrencies .
What is cryptocurrency?
Cryptocurrencies were originally intended to pay for goods and services, and this is no different from traditional money. The main difference, in addition to the complete anonymity of the calculations , is the method of receiving (issuing) new monetary units and the structure of their storage and payment network .
Cryptocurrencies do not have a single bank or emission center, and all currency units are stored on crypto-wallets of network users. In this they fundamentally differ from other payment systems. Crypto-wallets are combined into a single network “bank”, and payments are made directly between users without any intermediaries with maximum confidentiality. In addition to the new way of storing funds, cryptocurrencies also offer a new way of issuing monetary units using mining .
Cryptocurrency mining
So, we decided to start mining. What is it and how to make money on it? Mining is nothing more than the process of creating new crypto coins using a special algorithm. All cryptocurrencies are based on the algorithm of the well-known Bitcoin, and new cryptocurrencies are issued to someone who finds a new
block - a unique data set to confirm the validity of payment transactions. The speed of finding and the number of cryptocurrency rewards are different in each currency, in the Bitcoin system the current reward is 25 Bitcoin for one new block. Mining software is downloaded from official cryptocurrency sites.
How to start mining
Theoretically, the process of enumerating possible options for blocks can occur on any computer equipment, but in reality, the speed of mining directly depends on the power of the equipment. All cryptocurrencies have a special parameter called complexity , which is constantly increasing and making it difficult to find a new block. To measure the speed of generating cryptocurrencies, special conditional units of measurement, called hash , have been introduced. The power of mining equipment is usually measured in megahashes (MHash) and gigahashes (GHash) . Since the complexity of mining the most expensive cryptocurrencies has long been unattainable on a single computer, mining farms and mining pools are used to search for new blocks .
Mining farms
Mining algorithms are quite specific and require a lot of parallel computing from computer hardware. Mining on a computer processor is not very effective due to the shortcomings of their architecture, but it turned out that the algorithms work quite successfully on ATI's graphics cards (currently an AMD division). The first generation of mining farms was a rack with a large number of simultaneously working ATI-graphics cards. At the beginning of the development of cryptocurrencies, these farms worked quite efficiently, and their capacity was increased by simply adding video cards. But the increased complexity of mining has made them economically unprofitable.
Modern mining farms are designed on the basis of programmable logic arrays (FPGAs) or specialized ASIC processors . They are more reliable, consume significantly less energy than farms that use video cards for mining. A table comparing the performance of various generations of farms shows that the productivity of new farms is 20-30 times greater, and mining on video cards of such currencies as Bitcoin does not make sense. The only drawback of mining systems based on logical matrices and ASICs is the high cost, inaccessible to a simple user.
Mining pools
After a sharp increase in the complexity of the most popular cryptocurrencies, many rushed to conclude that such an attractive process as mining was inaccessible for most users. That this is now only for large investors with powerful data centers, they thought. But the situation has changed for the better after the advent of joint cryptocurrency generation pools. Technically, a pool is a computer network in which the mining process is distributed among all participants in the network, and, accordingly, the time it takes to find new blocks is reduced.
All blocks are recorded in a single distributed cryptosystem database after mining is confirmed. What is this database? This is information about payment transactions, in any cryptocurrency system it is stored and updated on all user crypto-wallets, which guarantees the stability of the system, and the loss of one computer from the general payment network does not affect its performance. The reward is also distributed among all participants in the pool.
Mining for beginners is possible only in a common pool, this is the only way for a simple user to participate in the mining process and make a profit from creating cryptocurrencies. Pools offer a variety of profit distribution models, including taking into account the power of client equipment. Therefore, it is recommended to really evaluate the possible mining speed on your computer. A slow computer with an outdated video card will rather reduce the overall performance of the pool, and the profit will be small.
Cloud mining pools
An increasingly popular way to jointly generate cryptocurrencies. To get started, the user does not need to have their own equipment. It is enough to pay a certain computing power to the data center in mega- or gigahesh / sec and then nothing needs to be done. The data center independently allocates the ordered power level and installs the necessary equipment. Paid capacities will consistently make a profit as part of the entire cryptocurrency mined by data-centorm. You can mine any cryptocurrency, but most large "cloud" miners work with Bitcoin or Litecoin.
How much can you earn?
Now that we have reviewed the technical basics, let's move on to how to correctly calculate earnings on mining. The possibility of profitable independent mining at the moment does not make commercial sense. Even with sufficient funds to buy a productive farm or a modern ASIC miner, it is better to include them in the common pool. Or invest in a cloud pool and get rid of problems with maintenance and upgrades. If you choose a reliable pool, then it is quite possible to earn $ 300-500 per month on Bitcoin or Litecoin mining.
The right choice of pool is the most important thing in such a complex activity as mining. The reviews about the pools are quite contradictory and, basically, are general in nature without the necessary specifics. This is a rather closed type of activity, and profit margins are usually not advertised. But with due persistence, everything can be found.
Now on the market there are enough new cryptocurrencies with low current complexity and equipment requirements, distributing hundreds of coins to owners of obsolete equipment. But it must be remembered that all these currencies do not have real value on the cryptocurrency market, and such activity in the hope of possible profit in the future is very similar to speculative mining. That this has nothing to do with normal activities, I think, is clear to all market participants.
Also pay attention to the size of possible commissions, it will not be very good if they absorb most of the profit.
Keep an eye on the cryptocurrency market
Constantly look for more profitable options for mining and cryptocurrency cashing, take into account the possible legislative consequences of working with cryptocurrency, check the reputation of cryptocurrency exchanges and exchange points. Follow the news: the cryptocurrency market is developing dynamically, and it is very important not to miss the promising currency. Mining requires constant attention and time. Set up a remote access program for the miner using a tablet or smartphone, for example, Teamviewer, for control from anywhere in the world.
Profitable mining for everyone!