Despite recent events, the crypto craze is still very much alive. Many people are interested in cryptocurrency nowadays as the market has proven to offer great returns to its investors. Investing in cryptocurrency could be a big gamble, you could make a lot of profits or lose a lot of money.
For example, those people who bought Bitcoin many years ago have seen tremendous financial gains whereas those who invested recently most likely suffered due to the market crash. Therefore, some people prefer the process of mining.
Make one initial investment into a decent computer that can mine cryptocurrency efficiently, then you can make lots of money potentially if done right. It’s a costlier but less risky process when going about cryptocurrency which is why many prefer to mine cryptocurrencies.
Which cryptocurrencies are worth mining?
It’s best to focus on mine altcoins instead of Bitcoin. The mining process for Bitcoin is difficult and costlier compared to other cryptocurrencies thus it’d be better if you stayed away from it if you have access to only consumer-level hardware. Bitcoin is only mined by large-scale companies because it’s only profitable when the process is done on a large scale.
Therefore, it’s best to mine altcoins. Dogecoin, Feathercoin, and Litecoin are pretty easy to mine and aren’t as costly so they’d make the perfect fit for a regular person wanting to mine cryptocurrency. Some of these coins will earn you higher profits such as Litecoin due to its popularity. Circumstances may change so it’s best to pick a cryptocurrency that’s easy to mine and has potential to surge/become popular or is already a popular cryptocurrency.
What to expect out of the mining process
Mining cryptocurrency won’t make you rich. Perhaps if you had been mining cryptocurrency since 2009 it would’ve been a different story.
However, with the most recent market crash and the fact that global scale regulation has swept the crypto market, it’s safe to assume we won’t be seeing huge surges as often as before. Therefore, it’s best to make smart investments in cryptocurrencies themselves instead of incurring the costs of mining.
The only way mining would become really profitable for someone would be by spending $3000-$5000 on some serious hardware that could help you earn lots of money. Those are unreal costs and not many people would make that sort of investment.
Therefore, it’s best to go into the mining process thinking of it as a hobby. One can expect to earn 1 or 2 dollars a day and cover all the costs incurred in setting up the hardware for mining in a year or so. Many cryptocurrencies can be used in online transactions as well so if your goal is to get crypto tokens in order to spend them, then mining can be a good option.
As for the costs surrounding the mining process, investing in a decent PC is not the only cost that needs to be taken care of. One can expect a substantial electricity bill too if graphics card selection is not done properly. Multiple graphics cards would be preferred as they can help get more tokens per day. Apart from that, an overall well-built PC would be ideal along with a cooling system as the mining process, can take a toll on the hardware.
It’s best to do proper research before selecting the cryptocurrency you want to mine. Beware of cryptocurrencies that may be a scam such as the recent incident with BitConnect. The exchange shut down which saw its cryptocurrency to fall all the way from $250 to less than $20. Whoever mined or invested in this currency faced huge losses, so be wary of the cryptocurrency you choose.
This guide will only focus on “scrypt coins” such as Dogecoin, Litecoin, and Feathercoin.
The mining process is basically a task for which the reward is in the form of cryptocurrency. For example, the goal will be to provide bookkeeping services for the coin network. Mining is the way to verify transactions.
The entire check-list of what you’ll need
- A coin wallet. It’s a password-protected container that will store your cryptocurrency. Head to the cryptocurrency’s official website, whichever one you intend to mine and look for the default wallet app (download link should also be given). For example:
Image: coindesk - A mining software is required. cpuminer and cgminer are easy to use and they work well too. However, cpuminer does require the command prompt which could be an issue for Mac users. Check this one out as well.
- It’s recommended to join a mining pool. A mining pool is a way you can share processing resources and solve a block collectively instead of doing it alone. It results in a higher success rate of mining but it also results in the rewards being split depending on how much ‘share’ one had in the process. However, it’s less complicated and easier to do so it’s better to do it with other people if you’re a beginner.
- You’ll need to sign up at an online currency exchange. This is where you’ll be able to trade your cryptocurrency and cash them in for real money.
- A good internet connection is must for effective mining.
- This goes without saying as it’s already been mentioned multiple times but a custom-built high-end computer is necessary. It should contain a high powered GPU. You’ll need to invest in a separate PC for mining because you won’t be able to use your PC for anything else during mining so one PC dedicated to mining will be required. The more you invest in order to make your PC as powerful as possible, the more returns you’ll get.
- Invest in either a PC fan or arrange for something to cool your PC as your PC has a chance to overheat due to the intensive mining process.
Once you have everything ready, you’re ready to mine some crypto coins. All that’s left to do now is to write a script (a set of instructions) for your mining software to follow. Once that’s been set up, you can start mining cryptocurrency. Best of luck!