How to become a miner of bitcoin, ether and other cryptocurrencies
The advent of cryptocurrencies has given mankind a new type of earnings – mining. For many years now, it has been the most discussed topic. Since the advent of cryptocurrencies, the mechanism for their extraction has changed dramatically. If earlier it was possible to start “mining” from a personal PC, now it will take some effort to join the ranks of miners.
What you need to become a miner
The task of miners is to support the functioning of cryptocurrency networks and to verify user transactions. To do this, using computing equipment, you need to solve mathematical hash functions. Therefore, in other words, mining can be described as a process of monetizing the computing power of technology.
Initially, cryptocurrency networks had much less complexity, so you could start mining on any PC. But with the popularity of cryptocurrencies, complexity has also increased, so now for mining, you will need to create your own high-power mining farm, which is associated with investment. If we talk about the extraction of cryptocurrencies such as Bitcoin, then we need huge capacities and, accordingly, investments, but there are more than 1000 digital assets on the market, so you can start mining with small amounts.
Choosing mining as your main activity, it will not be superfluous to get acquainted with the knowledge bases about blockchain technology and the intricacies of the cryptocurrency market. The articles from our section “Beginners” in the top menu will help you with this.
Profitability and profitability of the farm is directly related to the ability of the miner to control the mining process and provide optimal conditions for the monetization of capacities.
Tips for a novice miner
The cryptocurrency industry is only gaining momentum, so it can hardly be called constant and with clear rules. When choosing mining as a profit, an investor should understand that this type of activity is fraught with certain risks, therefore it is important to be able to maneuver correctly in the cryptocurrency market.
The main things that a novice miner should know and undertake before embarking on mining:
- The difficulty of mining is always growing. With an increase in demand, the complexity of mining top-end cryptocurrencies is constantly increasing. Experienced miners recommend assembling a mining farm immediately with a reserve of power and allocating part of the income to upgrade and build capacity.
- It is necessary to monitor the situation in the market. The profitability of cryptocurrency mining depends on many factors, the main of which are the complexity of the network and the rate of cryptocurrencies. The miner cannot influence these factors, but can choose from a variety of coins only those that are profitable for mining and have prospects for an increase in value. It is recommended to opt for several digital assets included in the TOP-10 by capitalization.
- Production optimization. For users, the mining process itself is reduced to connecting the equipment to mining through special software, but the profitability of the process also depends on how competently the miner can organize it. Here it is necessary to carry out detailed calculations based on the cost of equipment, electricity, take care of the optimal location of the farm and its protection from overheating and damage.
- Security. It is extremely important to take care of the safety of the mine. To do this, you need to prepare reliable cryptocurrency wallets in advance (we recommend the Ledger Nano hardware wallet, which we have been using for many years ourselves), choose programs and services for mining that have a good reputation and a high level of security.
What type of mining to choose
The choice of the type of mining primarily depends on the initial budget of the novice miner. There are several varieties that involve various capital investments:
- Cloud mining. This option is suitable primarily for those who want to delve into the production process, but are not yet ready to invest materially. Mining in this case does not require effort and in-depth knowledge of the industry, and the initial investment is limited to several hundred dollars.
- Mining farm from video cards. Unlike the previous method, where the cloud mining service takes care of the entire organization of mining, here you will need to delve into the intricacies of earnings, independently assemble a farm and organize the extraction of coins, which requires additional study. The investment threshold in this case starts at $ 1,000.
- Asik mining. Asic devices feature high performance and easy setup. These are complex devices ready for mining a certain cryptocurrency, which are enough to just connect to the Internet and power. In this case, the miner is not required to have special knowledge in organizing the process, but mining on asics requires a lot of investment.
- Mining on the CPU. Currently, using processors for the extraction of top cryptocurrencies is not relevant, but if they are available, you can pay attention to the extraction of newly made cryptocurrencies that have growth prospects.
Starter kit for starting mining
Modern mining requires high computing power, so one of the most optimal options is the creation of a mining farm of several video cards. The demand for technology in the secondary market and the ability to mine cryptocurrencies working on different algorithms speak in favor of this method.
When the farm is ready for operation, you should choose a cryptocurrency for mining and, based on the choice, select the appropriate software for it. So, in addition to computer technology, the miner will also need:
- Choose a pool for mining;
- Choose the right software;
- Have a cryptocurrency wallet.
It should be noted that mining farms create a lot of noise and heat, so a novice miner should also take care of the location of his farm. The best options are placement on non-residential areas, for example, in a free room, garage or on the balcony.
How much can you earn
In order to get the first coins, you need to spend several hours, but the real money starts from the moment the equipment has paid for itself. The payback period of equipment depends on many factors:
- Cost of equipment;
- Computing power of equipment;
- Daily farm profitability;
- Cryptocurrency value;
- The cost of electricity and its costs;
- Cryptocurrency network complexity growth.
In order to calculate the net profit for the miner, it is necessary to take away the payment of electricity and the cost of equipment from the earned coins. The average payback of the farm varies between 9-12 months, while taking into account the tendency to increase / decrease the cost of coins and increase the complexity of the network.
It often happens that with a significant jump in the exchange rate, the investment in equipment pays off much faster, and the miner reaches net profit in a few months. But it also happens that the complexity increases so much that production becomes unprofitable, and in this case, the miner should either increase capacity or switch to production of another asset.
The easiest way to calculate the profitability of mining through our cryptocurrency mining calculator. A calculator based on the total power hash calculates the daily, monthly and annual profitability of the farm, taking into account the current value of the cryptocurrency and an approximate increase in complexity.
Advantages and disadvantages of mining as a form of earnings
- Passive income;
- Does not require additional education and in-depth knowledge;
- Mining profit can increase many times with the rapid growth in the cost of mined cryptocurrency;
- Promising and popular type of activity;
- Mining income is not taxable.
- Start-up investment required;
- The miner is advised to learn the basics of mining before embarking on mining;
- The level of income directly depends on the ability of the miner to organize production;
- There is a risk of burnout when the rate drops;
- Over time, computer technology wears out, so mining requires a constant increase in power;
- The miner needs to keep his finger on the pulse of news all the time in order to be able to correctly determine the prospects of mining certain crypto coins.
Despite the external simplicity, mining still requires preparation and proper organization of mining. Those who decided to make the extraction of digital assets the main type of their activity should be prepared for the fact that in order to start production it will be necessary to have start-up capital and at least insignificant knowledge of the features of technology.
Do not forget that the future of cryptocurrencies has not yet been fully determined, so the miner needs to be always on the alert in order to quickly respond to market changes.