Cryptocurrency mining is a vital part in the validation and processing of transactions within a proof-of-work (PoW) consensus protocol, blockchain network.
Not all cryptocurrencies are PoW, but Bitcoin is. Other notable cryptos that require mining are Ethereum, Litecoin, and Monero. Many others use mining and PoW, but some don’t.
What is Mining?
Not all PoW are the same, but essentially, miners use their computing power to solve cryptographic computational equations with the intention of securing the network and earning a reward for their work.
A transaction is sent and a miner will pick it up and bundle it together with many other transactions. These transactions are sent to nodes for verification and once they’re verified the miners pick them back up and compete with other miners to work out the cryptographic puzzle and earn the right to add the block to the public chain and win the block reward.
Which Type of Computer To Mine With
Depending which cryptocurrency you want to mine determines the type of computer you will need. Bitcoin for example requires powerful computing power and can only be mined using powerful graphics processing units (GPU) ASIC mining machines.
ASIC miners are specialized computers that were built for the sole purpose of mining bitcoins. They are expensive, but to have a chance of earning bitcoins from mining, they’re a necessity.
Even with an ASIC mining machine, mining on your own is difficult and you’re unlikely to win the computational puzzle. Therefore, investing in multiple ASICs or joining a mining pool is necessary, especially for mining Bitcoin.
Join a Mining Pool for Better Rewards
Mining pools are basically a group of miners who’ve joined a mining network and their computing power works together to win the block reward. It gives a single user the best way of earning money from mining Bitcoin.
Some cryptocurrencies (Altcoins) can be mined on your laptop or even your phone, but this isn’t recommended, as it will affect your device’s capabilities in the long run.
Some cryptocurrencies can be mined using CPU, but GPUs payout the most. The best way to mine on a home GPU computer is to join a network such as NiceHash or HoneyMiner.
Basically these are mining networks that allow you use your computational power to either work out the PoW puzzle or rent your computational power to the highest bidder, who will then use it to mine altcoins.
There are many more mining networks, but these are two of the best and they can both be rewarding, depending on the state of the cryptocurrency market.
The same can be said even for Bitcoin and ASICs. It all depends on the price of the coin and the cost of your equipment and electricity bills. In all cases, it’s important to do your own research and find out what’s best for you in your location.
Author: Tommy Limpitlaw