How to Mine Cryptocurrencies – An Easy to Understand Guide
Published: March 1, 2022
Table of Contents
The big question on most people’s minds interested in cryptocurrencies is how to mine them. It seems simple enough. After all, you’ve probably heard of Bitcoin before, and it’s pretty easy to grasp the concept of what mining does.
But if you break down this idea further, it can get quite confusing. This article aims to answer this question– “How to mine cryptocurrencies,” and more.
Let’s start with the basics.
What Are Cryptocurrencies?
Cryptocurrencies are digital or virtual currencies that use cryptography for security. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature.
It is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.
While Bitcoin was the first cryptocurrency to capture the public imagination and represent an entirely new asset class, it is certainly not the only one.
A great many other cryptocurrencies have launched, and these are frequently called altcoins, as a blend of bitcoin alternatives. Bitcoin and its derivatives use decentralized control instead of centralized electronic money/centralized banking systems.
Importantly, none of these altcoin cryptocurrencies are directly involved in mining.
What is Crypto Mining?
At its most basic level, Cryptocurrency mining is simply the act of validating cryptocurrency transactions.
It may sound bizarre at first glance, but remember that every crypto coin transaction goes through the blockchain. Once a transaction is initiated, it must be approved by the entire network before it can be completed.
How to Mine Cryptos –– Step-by-Step
The following is our step-by-step guide to mining some of the more popular cryptocurrencies.
1. Get The Necessary Mining Hardware
There are many options for configuring your computer’s hardware to mine crypto, but not all software configurations work with every setup. As such, you’ll need to have the correct one.
There are several different pieces of mining software out there, but some are better than others, depending on what you are trying to accomplish.
Some options include:
BFGMiner
One of the more popular options available to miners today is BFGMiner. This mining software is compatible with most hardware setups and works on Windows, Mac, and Linux.
CG Miner
Another popular option for miners is CG Miner, an easy-to-use Bitcoin GUI mining software that supports both AMD and NVIDIA cards.
EasyMiner
Users looking for a simple way to perform CPU mining (very outdated) may want to use EasyMiner – a GUI-based software package that acts as a wrapper for CGMiner.
Ufasoft Miner
It is another option for CPU mining, also very outdated and possibly insecure.
EWBF’s CUDA Zcash miner
It is the only mining software to get hash rates of nearly 800 solutions per second on a single GPU.
3. Make Sure Your Power Supply Can Handle Mining
If you plan on mining crypto, it’s always a good idea to make sure your power supply can handle the load – and some of the more hardcore miners use several power supplies linked together in unison.
A strong power supply for your coin machine is important because it directly determines your mining speed. Choose the coin machine whose consumption does not exceed your mining rig’s consumption. Make sure to take electricity costs into account when determining profitability.
4. Enter Your Public Address
As the name suggests, this is where you enter your desired crypto public address to link with your wallet and mining activities. It will be different for every type of crypto coin, so make sure not to mix them up!
5. Select A Mining Pool
A mining pool is a group of miners who combine their computing power and split the rewards – kind of like a lottery syndicate.
A Note On Pools:
Some pools charge fees, while others are free – it all depends on your priorities and which one you want to join. We recommend checking out some crypto forums for advice on the best pools to use, as well as conducting your own research before you settle on a particular one.
6. Register An Account On The Pool
As you would probably expect, this is where you enter the account details for the pool – including your user name and password. Once that’s done, it will be time to start mining!
7. Get That Coin
The best crypto to mine is Bitcoin because it has the highest value. Right now, there are still 2,052,550.0 Bitcoins left to mine. But if you already have a powerful computer, it is more profitable to mine other cryptos at a low price and sell them when their price is high.
To get your hands on the currency you have mined, you must transfer it from your wallet address to a crypto exchange site. Once there, you can sell or trade-in for other cryptocurrencies!
8. Profit From Your Mining
In the early days of mining, pretty much anyone who got involved could profit. Today, things have become more complicated, with mining difficulty rising exponentially. So, make sure you to follow the steps above to ensure profit.
The Different Types of Miners and How to Choose the Right One for You
There are three types of crypto miners out there, each requiring certain hardware and software to make them run.
1. The Solo Miner
The simplest of miners are the solo miners who work alone, not requiring any other individual or organization to participate in mining activities. It is because all blocks are processed individually by these individuals or companies.
2. The Pool Miner
Pool mining requires the combined hashing power of all individuals within a pool to solve crypto blocks. It will result in more regular but smaller payouts across the board for these individuals or companies.
3. The Cloud Miner
These miners utilize cloud-based mining platforms where they don’t have to invest in hardware; rather, they buy mining power from data centers. It is probably the most complicated option of all three, but it will allow you to get into crypto mining with literally no upfront costs!
Coin cloud mining services are offered on the internet today, but it’s hard to determine which one is legitimate. Without a doubt, some cloud-mining providers will turn out to be scams – so exercise caution when making any decisions.
The Different Ways To Mine Cryptocurrency
Mining can be performed in several ways and by using different types of mining machines.
1. CPU (Central Processing Unit) Mining
A CPU miner is basically a program that performs repetitive calculations until hashes are produced – these hashes are used to determine if the block has been found and rewarded. The mining power of your computer is measured in MH/S (Mega hash per second) and GH/S (Giga hash per second).
2. GPU (Graphics Processing Unit) Mining
GPU mining involves using a graphics card of your computer to mine crypto, which is more powerful than CPUs for repetitive calculations since GPUs are designed with a parallel architecture that can perform multiple tasks independently of each other.
Your GPU hashing power is measured by MH/S (Mega hash per second) and GH/S (Giga hash per second).
3. FPGA (Field-Programmable Gate Array) Mining
FPGA mining is an efficient type of mining equipment for crypto hashing, enabled by integrated circuit chips designed to perform repetitive calculations for the fast solving of blocks.
These devices are more expensive than CPUs and GPUs, but the cost of power expenditure is low. The hashing speed of an FPGA is measured in MH/s (Mega hash per second).
4. ASIC (Application-Specific Integrated Circuit) Mining
ASIC mining is the best bitcoin miner that involves using hardware built specifically for crypto-coin mining. This technology has replaced FPGA mining in recent times, with ASIC miners providing more power with power consumption.
Benefits of Mining Cryptocurrencies
The main purpose of mining cryptocurrency is to allow crypto networks to reach a decentralized state by preventing the double-spending problem. It also helps solve blocks, providing an incentive for individuals or organizations to mine.
There are other benefits associated with mining cryptocurrencies:
- The miner will receive block rewards which will incentivize mining. This reward will be halved every time a certain computing power or network difficulty is achieved, with the smallest unit of account (satoshi) named after Bitcoin’s creator Satoshi Nakamoto.
- Mining creates the equivalent of a proportional lottery in which everyone has equal chances to get their reward. It helps to distribute the currency more evenly.
- Individuals or companies can generate additional income by mining the best coins to mine, increasing their capital outlay and business operations.
- Traditional markets are based on supply and demand, but digital currencies have a limited supply with no market demands to meet. Mining cryptocurrencies is how new coins are added into circulation, so it’s important to keep mining activities going.
Tips for Staying Safe while Mining Cryptocurrency
Crypto mining is not without its risks, so to ensure safe and successful mining, it’s recommended that you take all the necessary precautions. Here are some tips for staying safe while crypto-mining.
- Always use secure website connections when browsing for your mining platforms or cloud-based services – lookout for “https://” in the browser URL, as it’s different from http.
- Ensure your antivirus is up-to-date to prevent crypto mining malware or viruses from infecting your computer when you mine cryptocurrency.
- Keep an eye on the vendors you buy hardware from – they may be selling outdated hardware that can be easily compromised when performing repetitive hashing operations. With over 2,000 cyberattacks happening daily, this is something you want to pay attention to closely.
- Be aware of any online stores that claim to be the “official” store for a particular cryptocurrency, selling the most profitable crypto to mine. If they don’t have an address or phone number listed, then this is likely a scam site trying to sell you outdated hardware that will not produce profitable results.
- Never download a wallet from a pop-up ad – always download your wallet directly from the official website or Github repository.
- Don’t use a hardware wallet you’ve bought from a third-party seller – always buy your hardware wallets directly from the manufacturer for maximum security and peace of mind.
- Update all your software before mining crypto to ensure your computer is as secure as possible, with the latest antivirus and malware protection.
- Use two-factor authentication to log in to your website accounts – this is a great way of preventing unauthorized access to your mining earnings!
- Keep all mining equipment out of the reach of children, as hardware must be handled responsibly by adults only.
Wrapping Up
Cryptocurrency mining can be a rewarding and profitable process, but you need to do it safely and responsibly, as hardware has to be handled with care.
If you want to learn how to mine crypto, then follow these steps and you should be up and running in no time.
Happy mining!
FAQ
Is Bitcoin mining profitable?
Yes, bitcoin mining is highly profitable and can be a great way to make money. However, we advise that you only invest in the best hardware to help keep your computer safe and secure while mining crypto.
What does through mean in cryptocurrency mining?
Through is a term used in cryptocurrency mining to mean that your equipment has successfully mined crypto. If your hardware’s hash rate is high enough, you will have received an amount equal to or greater than what you paid for the purchase of your mining rig through payouts from the mining pool.
How much do miners make?
It is entirely dependent on how much you spend on your hardware. With the best ASIC mining rigs, you can expect to make upwards of $200 per month, with cheaper hardware costing less than this figure.
What is a crypto mining rig?
A crypto mining rig is a computer specifically designed for performing the repetitive hashing operations required in cryptocurrency mining.
ABOUT AUTHOR
Anne is a certified digital marketing strategist, a behavioral coach, and a technology guru. She has spent most of her life managing people from all walks of life until she decided to turn her passion for tech into a reality. As she is now a master of all things technology in the SEO world, managing Websitebuilder.org is her dream come true. She is also a proud mom to a future psychologist, and she loves to cook, cook, and cook some more!
