Mining cryptocurrencies is by no means a “get rich easy” scheme. Just like any passive income source, it takes time, energy, and capital to cultivate. However, it’s a great way to capitalize on this crazy, viral trend of the past 12 months. Before getting into how to get started mining, let’s go through an overview of what cryptocurrency mining is.
What is Cryptocurrency Mining?
Where do cryptocurrencies like Bitcoin come from? As a digital currency, Bitcoin is not just printed like a fiat currency like the US dollar. They’re mined out of a computer system, by a person using a mining program. These programs solve complex mathematical problems to generate Bitcoin and other cryptocurrencies. Once these computers solve these problems, called hash functions, the cryptocurrency enters into circulation.
1. Purchase A Cryptocurrency Mining Rig(s)
Cryptocurrency mining is a very competitive niche to get into. As more and more miners join the space, the more difficult the latest mining hardware becomes to acquire. Before even starting out with any type of cryptocurrency mining you need to do your due diligence. You have to figure out if whatever cryptocurrency you’re looking to mine will be a profitable endeavor. The best way to do this is through the use of a Bitcoin mining calculator (or whatever cryptocurrency you’re looking to mine). Just enter the data of the Bitcoin miner you are planning on buying and see how long it will take you to break even or make a profit. Note that you will need a decent amount of capital to start out with. The more rigs you start out with the better. Once you’ve finished with your calculations it’s time to find your miner. Be sure to thourghly research the different Bitcoin mining options to understand which miner is best for you. The Antminer S9 is one of the most powerful miners at the moment.
2. Find a Cryptocurrency Wallet
Once you have purchased a mining rig, it’s time to purchase a cryptocurrency wallet. Let’s use Bitcoin as an example. Because cryptocurrencies are digital currencies, you need a place to store them: A cryptocurrency wallet. Once you have a wallet make sure to get your wallet address. It will be a long sequence of letters and numbers. Each wallet has a different way to get the public cryptocurrency address but most wallets are pretty transparent about it. Note that you will need your public address and not your private key, which is your personal key for you to access your wallet (do not share this key with anyone).
3. Find a Mining Pool
Finding a good mining pool is an essential part of making cryptocurrency mining a profitable endeavor. A mining pool is a group of cryptocurrency miners that combines their computing power to make more of whatever cryptocurrency you’re looking to mine. The reason you shouldn’t go at it alone is that cryptocurrencies are awarded in blocks. Bitcoin is usually done 12.5 at a time, and unless you get extremely lucky, you will not be getting any of those coins.
In a pool, you are given smaller and easier algorithms to solve and all of your combined work will make you more likely to solve the bigger algorithm and earn cryptocurrency that are spread out throughout the pool based on your contribution. Basically, you will make a more consistent amount of the cryptocurrency and will be more likely to get a higher ROI. You can be very selective to the pool that you join, and pay close attention to the award method of that pool and how easy it is to remove funds from that pool.
4. Find a Mining Program for your Computer
You will need a mining client to run on your computer in order to control and monitor your mining rig. Depending on what mining rig you got you will need to find the right software. Most mining pools have their own software. One of the most popular programs for a PC are BFGMiner and 50Miner. For a list of cryptocurrency mining software, check out this link .
5. Run Your Miner
Once you have your miner configured, you can start your mining operation. Run the batch file you’ve created if necessary and watch the miner connect and start mining. You will want to have a seperate computer for mining, as it becomes extremely slow during the process, and it becomes very difficult to run other programs on. Be sure to monitor your hardware’s temperatures. Mining programs push hardware to their limits, especially if the hardware was not designed for mining in the first place. Use a program such as SpeedFan to make sure that your temperatures don’t go above safe limits. Graphics cards should usually never go above 176 °F (80 °C).
6. Monitor Your Profitability
You need to pay close attention to your profit margins to see if mining cryptocurrencies will be profitable for you. You need to keep track of the revenue you are bringing in from the cryptocurrencies you’re mining. Compare that to how much money it cost you to keep your computer running at full speed during that time (most video cards take about 300-500 watts).
Who Do You Want To Be?
Learn how to trade for active income or mine crypto for passive income. Start here.