What is Cryptocurrency Mining?
What is cryptocurrency mining ?
Cryptocurrency mining consists in allocating performance to a blockchain. This performance is used by the blockchain to perform and/or verify transactions; it can also be used for calculations to increase the number of the currency’s coins (or tokens).
More clearly: mining a cryptocurrency gives the cryptocurrency’s blockchain the performance of a computer, its graphics card, its motherboard, its processor, etc. A cryptocurrency miner can allocate all or part of the performances of their computer (or their RIG). The higher the performance allocated, the more lucrative the mining activity will be.
Cryptocurrency mining is rewarded with tokens of the mined cryptocurrency; for example, if you mine Bitcoin, you help the Bitcoin blockchain work, and you are rewarded in Bitcoin.
The rewards cryptocurrency mining meets the principles of supply and demand; the blockchain offering the largest cryptocurrency (Bitcoin) is not necessarily the most profitable to mine these days. Some sites specializing in cryptocurrency mining highlight the most profitable cryptocurrencies to mine, taking into account (or not) electricity costs, your computer components, market supply and demand, etc.
What components/computers are needed to mine cryptocurrencies?
Firstly, you have to know that mining with a computer is no longer possible. Well, no longer possible for cryptocurrency mining “pros". Only novices being initiated into cryptocurrency mining start with a computer, then after having gained 50 cents, give up everything believing that they are wasting their time.
They define a budget, forecast costs, study the profitability of their investment, and calculate the profitability of one RIG or another, that will mine one cryptocurrency or another. It is far from being within everyone's reach. But it is THE most cost-effective solution to mining cryptocurrencies.
Example of a RIG:
Coming back to what a RIG is... It's 4 wooden planks, 1 to 6 graphics cards, 1 motherboard, a power supply, and... And then that's it... The screen is generally only used to start the RIG, to launch the cryptocurrency mining, then it is removed. The idea being to limit energy consumption as much as possible, and the cost of "aesthetic" elements (e.g.: the tower... which in addition retains heat and would risk overheating the components); so that only the components necessary for crypto mining are applied with no constraints.
I’ll add another layer: "pros" even include, in the calculation of the RIG, the average life of each component of their RIG according to the load that will be required of them; Oh yes! A component can fail and it would therefore be necessary to replace it; that costs...
Well, in the end, what is the return on that? Hard to say... But I have some comments: a good RIG, well prepared, can be profitable in less than 2 months.
There are three other solutions for mining cryptocurrencies (but much less profitable, expensive even):
- 100% online cryptocurrency mining which uses your computer’s performance through a website.
- cryptocurrency mining with cloud (cloud mining), where you rent a preconfigured cloud to mine a cryptocurrency.
- cryptocurrency mining with an ASIC, where you buy a box dedicated to mining one cryptocurrency.
Embarking on cryptocurrency mining
Very clearly, forget third party cryptocurrency mining solutions. Constructing a RIG is the only profitable solution; you still need to know how to create it. But fortunately YouTube is full of tutorials explaining how to create a RIG.
Have you already created a RIG? So you have already analysed some of the most efficient and profitable mining components to mine your selected cryptocurrency.
And you, what do you think? Do you have any questions? Don’t hesitate to ask, but I’m not sure I’ll be able to answer them.
Let's slow down a little. Let's say you're at the YouTube tutorial stage. Frankly, isn't it better to buy cryptocurrencies and take advantage of their upside potential? Isn't that easier?
Personally, I've already thought about the idea of going into cryptocurrency mining; I've really thought about it. And, for me, it seems essential that you know a "pro" in the field to get started. Imagine that a component fails, you have to know how to identify the problem.
It makes you wonder why RIG builders don't sell training; I'd buy it! But then, they must have other RIGs to create.