Cryptocurrency is the most popular intangible money that numerous people and companies frequently trade with virtually everywhere. Cryptomining is a process or activity that uses a computer with a graphics processing unit (GPU) or an application-specific integrated circuit (ASIC) to perform complex calculations in return of mining rewards. These mining rewards often come in crypto tokens or coins, such as Bitcoin, Ether, or Binance Coins.
Cryptos are volatile currencies since their value continually fluctuates almost daily. Nevertheless, many engage in this high-risk, high-reward venture because of its profitability. Cryptocurrency is unregulated, which means that no entity monitors its cash flow and transactions. The more daily transactions and people participating in a particular crypto, the higher its value will become. One of the reasons it is also tough to mine one unit of Bitcoin, which is the most expensive crypto per unit currently in the market, is that people are careful not to distribute too much Bitcoin in the crypto market. With its surging demand and controlled supply, the community is de facto determining the price of these currencies.
So how do you jump straight to crypto mining? How do you partake in this digitally-enabled industry that has begun to leave tracks in the global economy? Where do you even start? What is the best crypto to mine 2022? You shall find the answers to these questions below.
Getting started with cryptocurrency: A beginner’s guide
If you’re in dire need of quick cash, cryptocurrency is not for you. Cryptocurrency is not an investment scheme that will yield significant returns in a short time. When you set foot into the world of crypto mining, it requires patience, dedication, and willingness to take risks and losses. Since crypto is volatile, there might be times wherein the value of your investment plummets or is in steady decline. It requires determination to hold on to a declining currency while waiting for opportunities. Thus, one should at least be mentally prepared to be a dedicated crypto user. Let us now proceed to discuss the requirements and steps to be a crypto miner.
- For you to earn money, you need to have a place to keep them. Like how you have wallets to put your bills in, you also need a crypto wallet to deposit all the tokens or coins you earn from your mining activities. Wallets are essentially encrypted online bank accounts that allow you to send and receive currency securely. With the rise of blockchain wallets, a distributed ledger technology that makes crypto transactions more secure, you must get one for yourself since it is slowly becoming the norm.
- The next thing you have to do is to get yourself a computer. If you are not well-versed with computers, you may consult with an expert to help you assemble one since rigs for crypto mining are built differently. You don’t have to be tech-savvy to understand that the crucial component you need on your rig to determine your crypto-mining capabilities is the graphics processing unit (GPU) or an application-specific integrated circuit (ASIC). You should invest heavily in these components, but if your capital does not allow you to purchase high-end models, middle-range parts will do.
- Once you have your crypto mining computer set up, you have two options to proceed forward. You can either:
- Directly find mining software, which is usually open-source or freeware, that can instantly get you started with crypto mining; or
- Find a group or community of crypto miners and join their group.
Why these options? There are several implications for choosing one over the other. For instance, if you couldn’t afford a high-end rig for your mining activities, it is recommended that you join a community and engage in pool mining. Pool mining is an activity wherein miners pool together their computing power and mine for digital currencies. On the other hand, high-end rigs can do individual crypto mining activities, so it is acceptable to jump straight into mining. Another point to consider is that you might not have any experience or extensive knowledge dealing with cryptocurrency, which is why joining a community can help reinforce your decisions by seeking advice and insights from seasoned industry experts and veterans. Your fellow community members can guide you while you conduct your market research to answer questions such as the best cryptocurrency to mine.
- At this point, you should already be familiar with dealing with crypto, and thus you should regularly check their prices in the market. Suppose you are not confident with your capability to predict and read the fluctuations of crypto prices. In that case, consulting with industry veterans to provide you with their perspectives is your best course of action. Knowing when to sell your coins for real-world money or mine/invest in another currency requires skill and opportunistic qualities. As long as you keep mining, monitoring the market, and grabbing opportunities, then your wealth will accumulate, and you will be a successful crypto trader.
You learned about the steps to becoming a crypto miner, but then you ask yourself, how does crypto mining work? What happens when you mine cryptocurrency on your computer? You will understand the process of crypto mining as you continue reading below.
Cryptomining: What happens and how its process is done
Miners engage in crypto mining by simply running the freeware for this specific purpose. Your computer will be provided tasks from the blockchain database. The database sends these tasks to multiple miners, which will engage in a race to determine who solves the complex calculation first. Your computer will receive a “block” for every verified transaction with the server database. This process means that one round trip of data over the network will count as one block. A series of verified transactions is called a blockchain. The database rewards the first unit to solve a specific task with coins or tokens, which means only the fastest blocks matter.
Suppose you are engaging in Bitcoin crypto mining, with an average of each Bitcoin block taking 10 minutes to mine. You can mine up to 144 blocks each day, which is only possible if you join an enormous community (numbering tens or hundreds of thousands) in mining pools, whose value has to be shared among its members. But solo mining would take you at least five years to mine a single unit of Bitcoin, which is highly inefficient. But that holds for Bitcoin mining alone. It is possible to mine other cryptocurrencies that may yield more significant profits.
