Cryptocurrency Mining: The Ultimate Beginners Guide
Cryptocurrency Mining is the newest rising trend in the tech savvy Gen-X. From Bitcoin to Ethereum, everyone who is aware of the concept of cryptocurrency mining, wants to earn as many rewards and profits as they can. And for those who haven’t yet indulged themselves in the art of cryptocurrency mining, we at ItsBlockchain have brought out the ultimate beginners guide to help YOU unlock the secrets of cryptocurrency mining.
(First things first, mining is a computationally intensive work that requires a lot of processing power and time. Cryptocurrency Mining is the act of participating in a given peer distributed cryptocurrency network in consensus)
Know Your Roots
We like to believe that to know where you are heading, you should know where you have come from. And cryptocurrency mining, though relatively new, has come a far way from the first Bitcoin Legder in 2009. Bitcoin Mining was the first cryptocurrency mining that people saw, and today there are over 800 cryptocurrencies that can be mined and traded.
If you don’t know your fundamentals, you can exponentiate your growth. When it comes to cryptocurrency mining, there are 2 types of coins – Minable and Pre-Mined. Most currencies are mineable by their very nature of being blockchain based. However some coins that have been mined by the insiders are also available for sale in various cryptocurrencies. These are the coins off which the insiders make profit. Basically, proof of work coins are ones that can be mined while proof of stake are ones that are pre mined.
Faith in the Future
15 years ago, if you were doing anything related to the internet, you were going to make millions. Today, with the right guidance, the same case could be with cryptocurrencies. From Bill Gates saying “The future of money in this world is Cryptocurrency” to Chris Dixon saying “There have been 3 eras of currency – commodity based, politics based and now math based”, we at ItsBlockchain believe that cryptocurrencies are going to change how the world works, and cryptocurrency mining is what we’re here to simplify for you.
Now, let’s get you rich.
Sweaty palms and nervous jitters? It’s time for you to leave both of those behind. ItsBlockchain brings to you a detailed guide on how to mine the TOP 5 cryptocoins in the market, and how to go about their mining and the rewards involved. Ready?
The reigning king of cryptocurrencies had to be the first choice undoubtedly. After all, Bitcoin mining is the oldest (and still the most popular) form of cryptocurrency mining. Bitcoin Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady.
Bitcoin Mining is an extremely competitive niche to dive into, and without the right kind of hardware support, you will not be anywhere. Standard CPUs don’t have enough power to execute the hash functions at the speed at which they are required. The best in town is the AntMinerS9 with 14,000,000 MHashs/s, but in a slightly cheaper price range the AntMinerU3 with 63,000 MH/s or the BFL SC with 10,000 MH/s are also good alternatives.
Because coins are awarded in blocks, once you have your hardware, the next step is to join a Bitcoin Mining pool else you won’t be able to claim any rewards or earn coins. You will need a mining client to run on your computer to that you will be able to control and monitor your mining rig. Depending on what mining rig you have, you will need to find the right software. For Bitcoin Mining, the best software for Mac users is the MacMiner. For others, the CGMiner¸ BFGMiner, BitMiner or BTCMiner are the softwares we recommend. Once you have all these setup it is absolutely essential to download a bitcoin wallet to store and track your digital currency.
According to Bitcoin wiki, when a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 25 bitcoins; this value will halve every 210,000 blocks.
Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of the bitcoin mining income.
- Ethereum Mining
In a kingdom of cryptocurrencies, current trends predict Ethereum as the successor to Bitcoins throne. Ethereum Mining is the process of mining Ether. Simply put, mining Ether equals securing the network which in turn ensures verified computation.
You can use any personal computer to mine Ethereum, provided the system has a Graphic Card (GPU) with at least 2 GB of RAM. GPUs are your best bet as they are 200 times faster than CPUs when it comes to Ethereum mining. Also, you need to be prepared for the fact the Ethereum Mining consumes a lot of electricity. This point is however surpassed over the profits one makes if the cryptocurrency mining has been efficient.
For mining ether, you need to first download Geth, which acts as a communication hub, uplinking you to the Ethereum portal while coordinating your setup with the hardware. Then you need a mining software, which will aid your GPU in running the hash algorithm required on the platform. Ethminer is a good choice for this kind of heavy lifting. Multi wallets are very purposeful if you are into mining of different cryptocurrencies at the same time.
A successful ethereum miner receives a static block reward that is equal to 5 Ether along with all the gas in fees that it generates from the transactions in the block that it verifies. As time goes on and the amount of Ether created grows it is expected that gas rewards will take the lion share of mining rewards.The miner will also receive an award of 1/32 per Uncle block included. Uncles are stale blocks with parents that are a maximum of six blocks back from the present block.
- Litecoin Mining
Next up on our cryptocurrency mining list, is Litecoin. The open source P2P digital currency has been growing exponentially and outperforming 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 to mine on your PC.
Like Ethereum, Litecoin is can be mined on CPU’s with a dedicated graphic card. Between a CPU and a GPU, a GPU is obviously preferred because of its faster cryptographic calculations.
A handy piece of software called cpuminer is the easiest way to start mining, but does require the ability to use the command line on your computer. Joining a mining pool and using multipool softwares often eases the task.
Litecoin’s block mining reward halves every 840,000 blocks. Given the Litecoin has been reaching all time highs for itself, the profits in Litecoin Mining are immense. The current coin reward is 25 coins per block.The number of blocks left till the reward halves is 11,133,525. Get mining now!
- Dash Mining
The billion dollar cryptocurrency club recently got a new member: Dash. The anonymous cryptocurrency recently made it past the $1 billion market cap, with one token’s worth today being above $200. Working on the same PoW and Blockchain platform as Bitcoin, Dash is a strong upcoming cryptocurrency.
The official website of Dash does not recommend CPU/GPU Mining as they say it is not as cost effective as ASIC processor mining. But you can indulge in CPU/GPU mining for Dash after going through the procedural examples on the website, that will help you achieve the fastest possible hash rate on your CPU, as long as you keep an eye open for new developments amongst more sensibly equipped miners.
For GPU mining, SGMiner is one of the best cryptocurrency mining programs that will support you. Other softwares like DashMiner and MinerGate also allows you to start with dashmining, after you install your wallets. Like the three before Dash, it is best to work in mining pools to earn maximum rewards.
Based upon the X11 algorithm, each block in Dash is tricky to mine and offers 1.8 Dash as the block reward at a hash rate of 385 Mh/s.
- Monero Mining
The last token on our cryptocurrency mining guide is Monero. It is a Cryptonote algorithm based cryptocurrency, it relies on Ring Signatures in order to provide a certain degree of privacy when making a transaction. With a current circulating supply of 14.7 Million coins and a total volume exchanged of $9,476,309.8, Monero’s current value is about $45.
Monero mining is usually done CPU/GPU as there are currently no ASICs for Monero. AMD Graphic cards are optimal for Monero Mining, but you can also mine it with a Nvidia GPU.
According to CryptoCompare, the best software for mining monero is Wolf’s Cryptonote Open Source CPU Miner, as it has provided the best results. If you are using the AMD GPU then you should download the AMD GPU counterpart of the same – Wolf’s Cryptonote Open Source AMD GPU Miner. Then the rest of the process is as redundant as all other cryptocurrency mining processes – Punch the command lines, Install the Wallets, Join a Mining Pool and Get Mining!
As of April 2017, Monero was the 6th most traded cryptocurrency, with a market-cap of over $600,000,000. Monero is a cryptocurrency with a “smooth” emission. This means the block reward decreases gradually until it hits 0.3 XMR per minute. Subsequently, the tail emission kicks in and the block reward will remain 0.3 XMR per minute indefinitely.
When talking about digital tokens and cryptocurrency mining, Paco Ahlgren, the financial analyst at Wi-Fi Alliance, said
“This may be the purest form of democracy – the world has ever known, and I for one am thrilled to be watching it unfold”
Cryptocurrency is taking the digital world by storm and cryptocurrency mining is the your ride on this rollercoaster. The end of this rainbow, really does have a pot of gold resting on the other side – in the form of digital tokens. And we at ItsBlockchain, are happy to be your catalyst.