What You Need To Know About Cryptocurrency Mining

What You Need To Know About Cryptocurrency Mining.jpg

What Does It Mean To Mine Cryptocurrency?

If you find it strange that a cryptocurrency needs to be mined, you're not alone. Cryptocurrency mining is not mining in the conventional sense of the term. It’s actually a process used to create the digital coins themselves. Cryptocurrency mining involves electronically solving complex computational equations that are needed for the cryptocurrency ledger to function properly. Basically, cryptocurrency mining is the process of logging transactions in the ledger of past transactions, which is called a blockchain. The blockchain serves the purpose of confirming transactions to the rest of the network as having officially occurred.

How Can I Earn Cryptocurrency From Mining?

When you’re mining, you’re essentially earning cryptocurrency from verifying transactions on the blockchain. But in order to actually earn the cryptocurrency, you must verify at least one megabyte of transactions. One megabyte worth of transactions could be comprised of as little as one transaction or as many as several thousand transactions. It all depends on how much data each transaction stores.

But that’s not all.

To earn the cryptocurrency, you also need to solve a difficult mathematical equation in order to add transactions to the blockchain. The difficulty level of the problem at hand increases as more miners begin to compete to find a solution. But if miners leave the network, the difficulty of the problem decreases.

In short, if you want to maximize your success in mining, now is the best time to start.

What Do I Need To Get Started?

The mathematical equations that are used to mine for cryptocurrency are highly complex, and can’t possibly be solved by hand. This means that a significant amount of equipment is needed in order to start mining. Here's what you'll need to effectively mine cryptocurrency:

Powerful Hardware

You'll need to invest in some powerful hardware in order to mine cryptocurrencies. It's essential that the computers that you choose have a high CPU capacity. When you’re looking at hardware, you should consider:

  • The Ant Miner S7

    • Advertised Capacity: 4.73 Th/s

    • Power Efficiency: 0.25 W/Gh

    • Weight: 8.8 pounds

    • Guide: Yes

  • The Ant Miner S9

    • Advertised Capacity: 13.5 Th/s

    • Power Efficiency: 0.098

    • Weight: 8.1 pounds

    • Guide: Yes

  • Avalon6

    • Advertised Capacity: 3.5 Th/s

    • Power Efficiency: 0.29 W/Gh

    • Weight: 9.5 pounds

    • Guide: No

Cryptocurrency mining without using this type of specialized hardware will consume more electricity than you will earn through mining. It is important to use hardware that is made specifically for cryptocurrency mining.

If you don’t want to invest in this type of hardware, you could also buy cryptocurrency cloud mining contracts. You’ll reap the benefits of using a more simple mining method, but you’ll also have to accept a higher level of risk because you won’t have control over the physical hardware that’s being used. If you’re buying cloud mining contracts, be extremely wary of scammers.

Mining Software

If you’re buying cryptocurrency mining hardware, you’ll need to download mining software. Currently, two popular command line programs are CGMiner and BFGMiner, but there are many other programs to meet your mining needs.

A Mining Pool

Simply put, mining is better together. Mining pools consist of groups of miners who collaborate in order to solve a block and then share the spoils. Joining a mining pool is much more efficient than working solo, especially now that the difficulty of mining has increased significantly. Working on your own, it might take you a year or more to mine any cryptocurrency. But when resources are pooled, blocks can be generated more quickly and participating miners can receive a piece of their block reward on a regular basis.

Cashing In On What You’ve Mined

You can sell your cryptocurrency through a brokerage or to another individual, but it's also possible to use cryptocurrency to make a wide range of other investments. Furthermore, you may prefer to hold on to the cryptocurrency as an investment.

Finally, when the time comes, you can convert your cryptocurrency into cash at a Pelicoin ATM. Pelicoin is the Gulf South’s largest, most secure cryptocurrency ATM network. If you’re based in Louisiana, visit a Pelicoin ATM location in Shreveport, Lafayette, Baton Rouge, Mandeville, or New Orleans to turn your cryptocurrency into cash today.