How to mine cryptocurrency? Which is the best for mining?

mining cryptocurrency

Mining cryptocurrency

The process of generating new cryptocurrencies like Bitcoin, Ethereum etc is known as Mining Cryptocurrency . A vast network of decentralized computers spread across the world verify the transactions made and a ledger is maintained with a specific timeline spread throughout the network. A complex problem is executed and solved using the computing power of the network which is rewarded with increments of the cryptocurrency. Anyone can mine cryptocurrency.

Types of mining

GPU mining

CPU mining

In this process a CPU is used for computing the complex problem provided in the blockchain, Beginning of the cryptocurrency there was a very less requirement of computing power , So CPU’s were sufficient to solve and execute the problems and maintain the blockchain. The profitability was reduced significantly so many are opting out of CPU mining.

ASIC mining

Application-Specific Integrated Circuit this is a specialized device which is designed just for the purpose of mining cryptocurrency. These devices are very high end mining Equipments , the cost of purchasing these devices is also very high compared to GPU’s and CPU’s. But they are very efficient in mining and majority of Large scale miners use these device to mine cryptocurrency.

Types of miners

There are two types of Miners

  1. Solo miners : They generally set up a small to large mining farm which run the algorithm and mine cryptocurrency, they are in direct loop with the specific blockchain.
  2. Pool miners : They are generally small miners who cant afford the cost of purchasing multiple equipment which is required to solve a single problem in the blockchain . So some companies and groups pool in the resources to form a large network of devices which can solve the problems to mine cryptocurrency. They usually charge a small amount for the maintenance of the network, they also provide a software to check and maintain the network remotely.

Small mining set up

mining
Mining cryptocurrency

Steps to follow for mining cryptocurrency

Key factors

These are the key factors to keep in mind before you start mining

  • Cost of power consumption
  • Initial investment for hardware
  • regulations in your country
  • Maintenance cost of the rig
  • Profitability of the setup

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