A Beginner's Guide to Cryptocoin Mining
Is it worth your time to mine for cryptocoins?
by Paul Gil
Updated on January 26, 2020
reviewed by
Christine Baker
Cryptocurrency mining takes patience and time.
Koron/Moment/Getty Images
Cryptocurrency
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Mining cryptocoins is an arms race that rewards early adopters. Bitcoin, the first decentralized cryptocurrency, released in early 2009. Similar digital currencies have crept into the worldwide market since then, including a spin-off from Bitcoin called Bitcoin Cash.
Which Alt-Coins Should Be Mined?
Pile of litecoin coins on fabric
BTC Keychain / Flickr / CC by 2.0
If you had started mining Bitcoins back in 2009, you could have earned thousands of dollars by now. At the same time, there are plenty of ways you could have lost money, too. Bitcoins are not a good choice for beginning miners who work on a small scale. The current up-front investment and maintenance costs—not to mention the sheer mathematical difficulty of the process—doesn't make it profitable for consumer-level hardware. Today, Bitcoin mining is reserved for large-scale operations only.
Litecoins, Dogecoins, and Feathercoins, on the other hand, are three Scrypt-based cryptocurrencies that are the best cost-benefit for beginners.
Dogecoins and Feathercoins would yield slightly less profit with the same mining hardware but are becoming more popular daily. Peercoins, too, can also be a reasonably decent return on your investment of time and energy.
As more people join the cryptocoin rush, your choice could get more difficult to mine because more expensive hardware will be required to discover coins. You will be forced to either invest heavily if you want to stay mining that coin, or you will want to take your earnings and switch to an easier cryptocoin. Understanding the top 3 bitcoin mining methods is probably where you need to begin; this article focuses on mining "scrypt" coins.
Also, be sure you are in a country where bitcoins and bitcoin mining is legal.
Is It Worth It to Mine Cryptocoins?
As a hobby venture, cryptocoin mining can generate a small income of perhaps a dollar or two per day. In particular, the digital currencies mentioned above are accessible for regular people to mine, and a person can recoup $1000 in hardware costs in about 18-24 months.
As a second income, cryptocoin mining is not a reliable way to make substantial money for most people. The profit from mining cryptocoins only becomes significant when someone is willing to invest $3000 to $5000 in up-front hardware costs, at which time you could potentially earn $50 per day or more.
Set Reasonable Expectations
If your objective is to earn substantial money as a second income, then you are better off purchasing cryptocoins with cash instead of mining them, and then tucking them away in the hopes that they will jump in value like gold or silver bullion. If your objective is to make a few digital bucks and spend them somehow, then you just might have a slow way to do that with mining.
Smart miners keep electricity costs to under $0.11 per kilowatt-hour; mining with 4 GPU video cards can net you around $8.00 to $10.00 per day (depending upon the cryptocurrency you choose), or around $250-$300 per month.
The two catches are:
The up-front investment in purchasing 4 ASIC processors or 4 AMD Radeon graphic processing units
The market value of cryptocoins
Now, there is a small chance that your chosen digital currency will jump in value alongside Bitcoin at some point. Then, possibly, you could find yourself sitting on thousands of dollars in cryptocoins. The emphasis here is on "small chance," with small meaning "slightly better than winning the lottery."
If you do decide to try cryptocoin mining, proceed as a hobby with a small income return. Think of it as "gathering gold dust" instead of collecting actual gold nuggets. And always, always, do your research to avoid a scam currency.
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Mining rewards are paid to the miner who discovers a solution to the puzzle first, and the probability that a participant will be the one to discover the solution is equal to the portion of the total mining power on the network. Participants with a small percentage of the mining power stand a very small chance of discovering the next block on their own. For instance, a mining card that one could purchase for a couple of thousand dollars would represent less than 0.001% of the network's mining power. With such a small chance at finding the next block, it could be a long time before that miner finds a block, and the difficulty going up makes things even worse. The miner may never recoup their investment. The answer to this problem is mining pools. Mining pools are operated by third parties and coordinate groups of miners. By working together in a pool and sharing the payouts among all participants, miners can get a steady flow of bitcoin starting the day they activate their miner. Statistics on some of the mining pools can be seen on Blockchain.info.bitcoin neteller MV = PTмонеты bitcoin There is a definite need for better identity management on the web. The ability to verify your identity is the lynchpin of financial transactions that happen online. However, remedies for the security risks that come with web commerce are imperfect at best. Distributed ledgers offer enhanced methods for proving who you are, along with the possibility to digitize personal documents. Having a secure identity will also be important for online interactions — for instance, in the sharing economy. A good reputation, after all, is the most important condition for conducting transactions online.solo bitcoin bitcoin обзор Similarly, the software to start a social media platform is easy and well-known at this point. However, actually making a social media company is extremely difficult, because you need tons of users to make it worthwhile, and only when you get enough users does it become self-perpetuating. Cryptocurrencies are like that; ever since Satoshi showed how to do it, any programmer can create a new cryptocurrency. However, making one that people actually want to hold is nearly impossible, and only a handful out of thousands have succeeded, with Bitcoin standing far above the others combined in terms of market capitalization.SECcran bitcoin bitcoin crash monero обменять mt5 bitcoin bitcoin agario iota cryptocurrency bitcoin transaction bitcoin mining bitcoin cms сколько bitcoin minergate bitcoin bitcoin linux ethereum supernova bitcoin fox dark bitcoin добыча bitcoin bitcoin click
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