If you want to make money by mining cryptocurrency, then we are here to help you in understanding how to mine cryptocurrency. Every single day a lot of people are developing an interest in the field of cryptocurrency. The reason that so many people want to invest in cryptocurrency is that they have heard that they can earn money through it.
It is a good practice to know that how can we mine cryptocurrency before we enter this domain. Here, we will provide a detailed description of mining and the ways that you can use for mining.
What is mining?
It is the process of verifying cryptocurrency transactions and adding them to the decentralized ledger. When a cryptocurrency transaction is made, it is the responsibility of miners to ensure the authenticity of that transaction. In mining, miners compete with one another to solve a complex mathematical problem through cryptographic hash functions. These functions are associated with the block which contains the data of the transaction.
The miner who cracks the code successfully is awarded by a certain amount of cryptocurrency. A miner should have a computer with specialized hardware if he wants to compete with other miners.
Methods of mining:
Let us provide a detailed description of the methods you can adopt if you want to mine cryptocurrencies.
1) Cloud Mining:
It is one of the most popular ways that is used for mining cryptocurrencies. In this process, you can rent-out a mining machine (known as “rig”) of an organization by paying them a specific amount of money. This contract lasts for a certain time. In this time, all the earnings made by rig are transferred to your cryptocurrency wallet except for maintenance and electricity costs.
2) CPU Mining:
In this technique, the processors are utilized for mining cryptocurrencies. It was a very common way to mine crypto in the past. But now fewer people use this technique.
One important reason that this technique is not being used much these days is that it is a very slow process. The money earned through this technique is 10 times lesser than the electricity and cooling cost you use to carry out this process. Laptop or desktop systems get overheated in the first few hours of mining. So, it is not advisable to use this technique.
3) GPU Mining:
It is the most popular technique for mining cryptocurrencies. This technique used graphics cards for mining cryptocurrencies. A standard rig is made by using a motherboard, a processor, rig frame, and 4-8 graphic cards. Although the cost for building such a rig is around $3,000, this investment can be recovered easily.
4) ASIC Mining:
ASIC stands for Application-Specific Integrated Circuit. These are special devices that are designed to perform only one task at a time. The amount produced by this mining is larger than both GPU and CPU but it is not used much because it is so powerful that it can rob earning opportunities of other miners who use GPU or CPU mining.
So, after all this discussion about various methods for mining cryptocurrencies, we conclude that GPU mining is the best out of all these methods. So, we hope you got the knowledge enough to help you understand how to mine cryptocurrency.