We are sure that you have heard the word "mining" not once or even twice, but much more. Recently, this term has become popular among those people who are getting interested in cryptocurrency. So let's figure out where so much noise is coming from, and whether it is possible to make money from mining now.
Cryptocurrency mining is a process that ensures network performance. The main task of the miner is to process cryptocurrency transfers. For the successful realization of this task, miners receive a reward in the form of cryptocurrency.
Types of mining
At the moment, there is no single type of mining. It all depends on what equipment is used.
Mining on a video card
This is one of the most relevant and popular methods. This mining requires a powerful GPU video card (for example, Nvidia).
In order to start mining, you will need several video cards. A complex of video cards that can allow mining is called a farm. On average, 1 farm consists of 6-8 video cards. The cost of one video card can reach from $1,000 - $2,000. If you need a more powerful farm, then you should use at least 8 video cards.
ASIC mining
It is a scheme used to calculate a specific sequence for mining the corresponding cryptocurrency. This type of mining requires an ASIC miner. This device is a powerful alternative to video cards and allows you to mine cryptocurrency in larger amounts.
Cloud mining
In simple words, it is online renting of mining equipment. That way, you don't have to buy everything and set up the farm yourself. It is enough to choose a cloud company and make a deal for renting mining equipment.
Browser mining
Surprisingly, this is mining in the browser itself. What is required of you in this case? Register on a special website and specify the address of your own cryptowallet. Next, you need to start mining. To do this, it is enough to open the given page, with the help of which the website will be using your computer for mining by means of the browser.
CPU mining
A CPU is a part of a computer (or other hardware) that can also be used to mine. If you compare the video card and the processor a little, then the latter is inferior in its power. Mining on the processor is suitable either for those currencies that are "programmed" for mining on processors, or for new cryptocurrencies that have only recently appeared.
What currencies can be mined?
The most popular currency for mining is Bitcoin (BTC). However, not all devices have the ability to mine BTC, as this requires high-powered equipment. In any case, you can find alternative digital currencies that will go with the settings of your equipment (video card, processor, PC, etc.).
Until September 2022, Ethereum (ETH) was very popular among miners. But on September 15, 2022, the Merge happened - ETH was transferred from the mining algorithm (PoW, Proof-of-Work) to the staking algorithm (PoS, Proof-of-Stake). Ethereum is now maintained not by miners, but by cryptocurrency holders (i.e. owners or validators), whose coins are locked in staking (for more details see Staking).
Investment payback in mining
If we take mining on a video card as an example, then it is necessary to understand what amount of equipment you plan to buy. Small-scale mining (approximately 2 - 3 farms with 6 - 9 video cards each) will cost $12,000 - $24,000 (or even more). For large-scale mining (starting with 5 farms with 8 - 10 video cards each), it will be necessary to spend from $40,000.
Over time, the investment will be able to pay back, and mining will start to bring profit. However, it is difficult to know in advance when exactly this will happen. On average, this happens after about 10 - 12 months. Sometimes there are cases when the equipment pays back after a couple of months, and sometimes - after several years. Much depends on the type of mining, cryptocurrency and its position on the market.
In addition to investing in equipment, be prepared to spend money on paying for electricity (as mining is an energy-consuming process), and for large-scale mining, it is also necessary to additionally prepare a separate room.
Rooms for mining
Small-scale mining can be arranged in an apartment. Suitable for this:
- pantry;
- balcony;
- room (non-residential).
Suitable for large mining:
- rental housing or rooms rented specifically for mining;
- garage.
Requirements for rooms:
Soundproofing. Even 1 farm will make noise. Now imagine that you have 2-3 of them, or even more. Noise should not disturb you or your neighbors, so you need to take care of sound insulation.
Good ventilation so that the equipment does not overheat. In fact, ventilation removes heated air and supplies cooled air.
Dry rooms. The mining room must remain dry no matter what the conditions are. When in contact with water, the equipment deteriorates and even catches fire. Additionally, fuses can be installed. In the event that the room is flooded, they will turn off the electricity supply.
Good wiring. The wiring must withstand the work of the farm (a small farm can consume approximately 2 - 2.5 kW). If you own the apartment in which you live, then the power of the wiring should be sufficient for the operation of household appliances as well.
Uninterrupted electricity supply. Just in case, you can purchase an additional generator to avoid an emergency power outage. Solar panels are also used as an alternative source of energy. Some miners use hydroelectric power stations (for large-scale mining).
Absence of direct sunlight, as the sun can heat the room. If the farm is inside a room or apartment with a high temperature, it can overheat. Overheated equipment fails. As a result, you will need to buy it again.
Protected territory with video surveillance (for large-scale mining in a garage or rental rooms).
Access to high-speed Internet.
Conclusion
To cut the story short, here's how to start mining:
1. Buy and set up the equipment;
2. Register a wallet to which you will withdraw profit;
3. Register in the pool (in the network) of the currency you want to mine;
4. Process cryptocurrency transfers and create blocks;
5. Get a reward in the crypt.
Then it is enough to withdraw your income. Any.Cash is perfect for this, as there you can withdraw funds to the auto-converted addresses.
Pros of mining:
+ The profit is much higher than investments in equipment (in the future).
+ Mining does not require special knowledge.
+ Passive income. It is not necessary to be present beside the equipment 24/7, as it processes all operations on its own.
Cons of mining:
- It is necessary to first invest in good equipment and provide it with all the conditions for uninterrupted working.
- It is necessary to have a special room for mining or equip a separate room.
- Video cards must be constantly cooled so that they do not overheat and fail.
- There is a risk that the reward for mining some cryptocurrencies may decrease.
- Mining uses a lot of electricity, which is why most miners switch to alternative but less efficient power sources (e.g. solar panels).
