CryptoManie

CRYPTOCURRENCY MINING 

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Cryptocurrency mining is the newest growing trend. Everyone familiar with the concept of cryptocurrency mining wants to make as much money as possible. And for those who haven't yet dabbled in the art of cryptocurrency mining, we've published the ultimate beginners guide for YOU! 

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First of all, mining is a computationally intensive job that requires a lot of processing power and time. 

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Cryptocurrency mining, although relatively new, has come a long way since the first bitcoin in 2009. Bitcoin mining was the first cryptocurrency mining people experienced, and today there are lots of cryptocurrencies that can be mined and traded. 

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When it comes to cryptocurrency mining, you should know that there are 2 types of currencies mined and pre-mined. Most currencies are minable by their very nature because they are based on a blockchain. 

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However, some coins that have been mined by insiders are also available for sale in various cryptocurrencies. It is these currencies that insiders profit from. Basically, proof of work (PoW) coins are those that can be mined while proof of stake (PoS) coins are those that are pre-mined.

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Mine cryptocurrencies like a pro directly on your PC or MAC. It's free. 

 

 

BITCOIN MINING

The queen of cryptocurrencies had to be the first choice without a doubt. After all, bitcoin mining is the oldest (and still the most widespread) form of cryptocurrency mining.

 

Bitcoin mining is intentionally designed to be difficult, so the number of blocks completed each day by miners remains stable. 

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HARDWARE

Bitcoin mining is an extremely competitive niche that diving into without the right kind of hardware support will get you nowhere. Standard CPUs do not have enough power to run hash functions at the speed they are required. 

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SOFTWARE

As the currency is distributed in blocks, once you have your hardware, the next step is to join a Bitcoin mining pool, otherwise you will not be able to claim any rewards or earn any currency. You will need to install a mining client on your computer so that you can control and monitor your mining installation. 

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Depending on the mining equipment you own, you will need to find the right software. For bitcoin mining, the best software for Mac users is MacMiner. For others, CGMiner, BFGMiner, BitMiner or BTCMiner are the software we recommend.

 

Once all of these are installed, it is absolutely essential to download a bitcoin wallet to store and keep an eye on your digital currency. 

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EARNINGS

According to the Wikipedia article on Bitcoin, when a block is solved, the person who made it can award themselves a certain number of bitcoins, which is accepted by all members of the network. Currently, this bounty is 25 bitcoins.

 

But this value will be halved every 210,000 blocks.

 

Additionally, the miner is credited with fees paid by users who make transactions. The fee is an incentive for the miner to include the transaction in their block. Going forward, as the number of new bitcoin miners allowed to create each block decreases, fees will represent a much larger percentage of bitcoin mining revenue. 

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LITECOIN MINING

Next on our list of cryptocurrency mining is Litecoin. The open-source P2P digital currency has grown exponentially and outperforms its many competitors. And if you don't want to invest in expensive ASIC processors for bitcoin mining, then Litecoin is one of the best altcoins (alternative currencies) to mine on your PC. 

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HARDWARE

Like Ethereum, Litecoin is CPU-based with a dedicated graphics card. Between a CPU and a GPU, the latter is obviously the favorite due to its faster cryptographic calculations. 

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SOFTWARE

A handy piece of software called cpuminer is the easiest way to start mining, but it does require using the command lines on your computer. Joining a mining pool and using multipool software often makes it easier. 

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REWARDS

Litecoin block mining halves the reward for every 840,000 blocks. Since Litecoin has reached all-time highs on its own, the profits from mining Litecoins are immense. The current reward is 25 Litecoins per block, the number of blocks remaining until half of the total reward is 11,133,525. Start mining now! 

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DASH MINING

The billion-dollar cryptocurrency club recently welcomed a new member: Dash. This anonymous cryptocurrency recently surpassed the market capitalization of $1 billion, with the value of a token today being over $200. Working on the same PoW and Blockchain platform as Bitcoin, Dash is a cryptocurrency whose power will soon be growing. 

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HARDWARE

The official Dash website does not recommend CPU/GPU mining because they say it is not as profitable as ASIC mining. But you can still indulge in CPU/GPU Dash mining after going through the sample walkthroughs on the website, which will help you achieve the fastest possible hash rate on your CPU, provided you keep a permanent eye on the development reached by the most judiciously equipped miners. 

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SOFTWARE

To help you with GPU mining, SGMiner is one of the best cryptocurrency mining programs. Other software like DashMiner and MinerGate also allow you to get started with Dash mining, after installing your wallets. Like the three currencies featured before Dash, it is best to work in mining pools to get the maximum rewards. 

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REWARDS

Based on the X11 algorithm, each Dash block is tricky to mine and offers 1.8 Dash as a block reward at a hash rate of 385 Mh/s. 

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MONERO MINING

The last token in our cryptocurrency mining guide is Monero.

It is a cryptocurrency based on the Cryptonote algorithm, which relies on ring signatures to provide some degree of privacy when making a transaction.

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HARDWARE

Monero mining is usually done by CPU/GPU as there is currently no ASIC for Monero. AMD graphics cards are optimal for mining Monero, but you can also mine with an Nvidia GPU. 

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SOFTWARE

According to CryptoCompare, the best software for mining Monero is Wolf's Cryptonote Open Source CPU Miner, as it provided the best results. If you are using AMD GPU, you should download AMD GPU equivalent – Wolf's Cryptonote Open Source AMD GPU Miner. Then the rest of the process is the same as any other cryptocurrency process – type the command lines, install the wallets, join a pool of miners and start mining! 

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REWARDS

In April 2017, Monero was the 6th most traded cryptocurrency, with a market capitalization of over $600,000,000,000. Monero is a “smooth” issue cryptocurrency. This means that the reward per block gradually decreases until it reaches 0.3 XMR per minute. Thereafter, the tail issue kicks in and the block reward will remain at 0.3 XMR per minute indefinitely. 

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COMPLETE MINING GUIDE WHY ARE CRYPTOCURRENCIES MINING?

 

Governments and corporations control national currencies. National currencies are therefore part of a centralized economic system. Whereas cryptocurrencies are decentralized currencies. No legal person controls cryptocurrencies.

 

It is the users who decide the fate of a cryptocurrency. Some of the most popular cryptocurrencies are Bitcoin, Ethereum, Ripple, Bitcoin cash, etc.

 

Since there are no centralized bodies such as banks in cryptocurrencies, there is no need for private registers. Instead, there is a public ledger, which is unique to each currency. This public ledger is called the blockchain. 

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In a centralized economic system, it is the duty of a bank to update the register of its customers. But in the cryptocurrency system, there are no banks or third-party payment operators. So we need someone or something that can verify transactions and add them to the blockchain. This is the work of miners.

 

A miner is a computer or cryptonet node that verifies transactions. Miners use special software to stay connected to the network and participate in the mining process. And in exchange for their contribution, the system rewards them with a fixed amount of currency.

 

 

HOW DOES CRYPTOCURRENCY MINING WORK? 

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Let's see an example with bitcoin, arguably the queen of cryptocurrencies. Suppose I send you 1 BTC. Now the system has to check the transaction to know if it really took place or if I am lying. That's what miners are for. One of the miners examines the records and verifies the transaction.

 

After that, it adds it to the blockchain or public ledger. In return, the protocol rewards the miner. In this way, miners create new currency in this system from scratch. Miners are therefore very important for a cryptocurrency network.

 

But it's not that easy. Remember that the blockchain is a public ledger. So, if the mining process was that simple, anyone could have set up a mining device and started manipulating the system.

They might have verified transactions that did not take place and create fake records. To make the cryptocurrency mining process as safe as possible, the system is made of steps. 

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CREATING A HASH FROM A BLOCK

 

First, there are no unique transactions. Instead, the system groups together a set of transactions that occurred in a given time period and creates a block. For Bitcoin, the block size is limited to 1 Megabyte. For new cryptocurrencies on the other hand, it can reach up to 8 MB. After aggregating the transactions, the network announces it to the participating miner nodes.

 

Then the miners compete against each other to create a hash from the transaction block. For bitcoin, miners use SHA-256 to create hashes, while in Ethereum we use Ethash. 

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The hashes are created using not only the transaction data included in the blocks but also from the hash of the block that precedes it. In this way, the blocks can be linked together, thus forming the blockchain (chain of blocks). This also increases security, as miners cannot create blocks from scratch. They must create blocks that can be linked to the previous block.

 

Hashes are very safe in nature. You can easily create a hash from the information you have using a set of mathematical formulas. 

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But once you've created a hash, you won't be able to retrieve the information embedded in it if you don't know the initial information. Once the hash has been created and added to the blockchain, the system rewards the miner. For Bitcoin, the reward amount is 12.5 BTC per block.

 

This reward is halved every 4 years or after 210,000 blocks have been created. This is intended to limit the circulation of bitcoins. Because in the end, there will only be 21 million bitcoins.

 

Computers are very fast in their calculations, so they can create hashes in no time. Therefore, to limit the number of blocks that can be created each day, the cryptocurrency network uses a number of rules. 

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The cryptocurrency network does not accept any hashes. A block hash must meet certain criteria to be considered a valid block. It doesn't matter if the miner created a hash with correct data. It still has to match the rules set by the system.

 

The cryptocurrency protocol requires miners to create blocks that have a particular profile. Usually, a block hash should have a number of leading zeros. And the system does not publicly disclose the format and it changes format after each successfully processed block.

 

If a miner's hash does not match the required format, they must create another hash from the block data. But the miner cannot manipulate the raw transaction data, nor manipulate the data of the previous block. 

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Thus, a new random number is introduced it is called NONCE or a number that can only be used once. A miner repeats this hash generation process with NONCE until he or another miner successfully creates a hash that the protocol approves.

 

The miners therefore compete against each other for the reward. This type of cryptographic issues is called proof-of-work. Every mineable cryptocurrency has some sort of difficulty adjustment algorithm that makes the whole mining process harder over time by requiring miners to calculate more complicated hashes.

 

WHAT IS A MINING POOL?

 

If you are a miner, you can mine as an individual or you can work with other miners to resolve proof of work issues.

 

A mining pool acts like an individual miner, but in reality it is made up of hundreds of individual miners. These miners share the processing power of their mining rigs and tackle the same problem.

 

In this way, the success rate increases strongly and the pool is rewarded by the system. Miners receive their share of the reward based on the amount of energy they contributed. 

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MINING PLATFORMS? 

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Mining rigs are specialized systems that are built for the sole purpose of mining cryptocurrencies. In the early 2010s, you could easily mine bitcoin with your home PC using the processing power of your CPU.

 

But CPUs are general-purpose processing units they can do a lot of things, but they're not specialized. This is why people started mining with GPUs and found that GPUs mine much faster than CPUs. This increased the mining difficulty so much that CPU mining became unnecessary.

 

When the GPU mining space was full, people started looking for other solutions. This is when FPGAs for bitcoin mining were introduced. But these FPGAs were not ideal for cryptocurrency mining and they were very inefficient. 

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This is how ASIC mining rigs came into existence. An application-specific integrated circuit is a specialized system designed to perform only one particular task. In this case, it is cryptocurrency mining.

 

Currently, there are so many Bitcoin ASIC mining rigs that GPU rigs have become irrelevant. But for cryptocurrencies like Ethereum, Zcash etc. where ASIC mining rigs cannot be used, GPU rigs are still best.

 

To sum up, CPU platforms are no longer relevant. GPU mining rigs are cheaper but less powerful than ASIC rigs. But ASIC platforms are expensive, to say the least. Plus, you can get respectable resale value for GPU rigs, but used, inefficient ASICs are just a burden. 

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If you're building a mining rig, you also need to make sure you maintain it.

 

So, if you have the money and want to become a serious miner, then use ASIC rigs. Currently, the best cryptocurrencies to mine with ASIC rigs are bitcoin, Namecoin, Litecoin, and Dogecoin etc.

 

And in my opinion, the best cryptocurrency to mine with a GPU right now is Monero. You can also mine Ethereum, Zcash, Hush coin, Bitcoinz, and Bitcoin Gold with GPU rigs. 

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CRYPTOCURRENCY MINING IN THE CLOUD

 

You may have seen cloud mining advertisements before. These cloud mining service providers praise their incredibly efficient mining rigs by spreading the profits.

 

In return, you will have to pay a certain amount for all this energy needed for work. You don't have to worry about the cost of equipment, electricity bills and cooling solutions. But they kind of charge maintenance fee for mining hardware maintenance. 

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Unfortunately, most of these cloud mining services are simple scams. They will take your money, invest it however they want and show you fake statistics. When the time comes, they will send you cryptocurrencies that they have purchased and not mined.

 

Nevertheless, there are legitimate miners in the cloud. Cloud Mining services like Genesis Mining, Hashflare..etc. are very reputable and popular companies among cryptocurrency enthusiasts.

 

But due to their popularity, the slots of their mining rigs fill up too quickly and sometimes have a waiting list of several months. 

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THE BEST MINING SOFTWARE

 

If you are using a GPU system, you have to configure the whole system yourself. This includes the installation of hardware components as well as the installation and configuration of necessary software.

 

There are many mining software available depending on the cryptocurrency you want to mine and the graphics card you are using.

 

Then there is everything in mining software like MinerGate or Nicehash. With MinerGate it is even possible to mine with your current PC. But with Nicehash, you won't be mining for yourself. On the other hand, you rent your platform to someone else and you will get the money from the rental rather than the profits from the mining activities. Kind of like a smaller cloud. 

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SOME GENERAL FAQ 

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MINE OR BUY CRYPTOCURRENCY WHAT TO CHOOSE? 

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If you are still wondering about this question, I will suggest you read the article one more time. Mining and buying are two different things.

 

By mining, you secure a cryptocurrency network and generate currency, and in return, you get rewards. But if you buy cryptocurrency, you are only investing in that cryptocurrency.

 

If you're up for the challenge, then start mining! 

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IS CRYPTOCURRENCY MINING WORTH IT?

 

I get asked this question from time to time. And my answer will always be yes, unless every cryptocurrency completely abandons proof-of-work (PoW).

 

That said, the issue of value depends on a lot of things, especially the cryptocurrency you want to mine. Currently, it is very expensive to get into bitcoin mining. 

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If you want to install your own equipment, you have to buy ASICs. But if you want to invest in cloud mining, that's expensive too.

 

And to make profits, you also need a lot of hashing power. But if you mine currencies like Ethereum, Zcash, Monero…etc, then it can be very profitable. Moreover, by mining, you not only profit, but also help a cryptocurrency grow. 

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IS CRYPTOCURRENCY MINING LEGAL?

 

I tend not to answer this question because there is a lot of ambiguity about it. But I believe it is legal in most countries and regions.

 

However, it is always a good idea to check the laws in the country concerned or speak to a lawyer. If you're still unsure and don't want to get in trouble, use a cloud mining service like Genesis Mining or Hashflare. 

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WHAT IS THE BEST CRYPTOCURRENCY TO MINE IN 2018?

 

At the end of 2017, we saw the introduction of a large number of cryptocurrencies focused on mining, in particular by GPU.

2018 could therefore very well be the year of cryptocurrency mining.

 

In my opinion, the best cryptocurrencies of the moment are Ethereum, Zcash, and Monero. You can also try playing with newcomers like Bitcoin Gold and Bitcoinz. 

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OUR OPINION ON CRYPTOCURRENCY MINING

 

Cryptocurrency mining is very resource intensive and wastes a lot of energy. The impact of mining on the environment is very alarming.

 

For example, currently bitcoin mining consumes around 901 KWh of electricity per month. Let me let you know that this amount is enough to power 2.26 million American homes at any one time. Quite shocking, isn't it?

 

This is why more and more cryptocurrencies are slowly moving to proof-of-stake (PoS) based transaction verification algorithms. 

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The PoS protocol does not require nodes, called validators or forgers, i.e., completing unnecessary cryptographic puzzles. Instead, they become validators to have a stake in the cryptocurrency network much like voting rights. To learn more about proof-of-work and proof-of-stake, click here.

 

Ethereum made concessions for considering switching from PoW to PoS. They have already made changes to their network to support their proposed Casper POS protocol. Some other popular PoS-based cryptocurrencies include Ripple, Dash, NEO, etc. 

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But there are a few cryptocurrencies that are against PoS-based cryptocurrencies. And these currencies want to carry on the legacy of mining.

 

For example, cryptocurrencies like Bitcoinz and Super Bitcoin want to continue to rely on PoW.

It is still very early to draw conclusions about the future of cryptocurrency mining, but I believe that better protocols will be introduced and that in the future mining will not be in the same form as we know it today. 

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