What is Cryptocurrency Mining ?
If we use the word miner, for cryptocurrency, it is because, like rare materials, cryptocurrency mining can represent a great financial opportunity. At least, when you know how to proceed.
In the crypto mining race, each miner will try to “find the solution to an equation” (a transaction).
This is their target. Their objective.
And instead of a pickaxe, they will use their computer as a tool.
Running at full speed, the machines will multiply the calculations until a machine finds the solution.
The one that will have been the fastest and most efficient. And the miner behind that computer will “win” bitcoins (or other equivalent currency).
However, it would be simplistic (and wrong) to summarize cryptocurrency mining as a competition between devices.
This particular system exists for a deeper reason : to nurture user confidence in this modern payment method.
How does cryptocurrency mining work ?
Insiders know it: what allows cryptocurrencies to exist are the famous blockchains.
They could be considered as small (virtual) chests containing data. Their content is essential. We won’t go into all the details, but these are like the roadmaps of a virtual currency exchange.
Everyone who mines cryptocurrency has a copy.
But precisely, how does this data end up registered in the famous blockchains?
This is where crypto mining comes in.
When the machines are busy “solving an equation”, they are actually trying to confirm a transaction.
This is also the very heart of the pledge of authenticity offered by the blockchain.
Indeed, unlike what is observed for traditional currencies (FIAT money), there is no regulatory body for crypto currencies. No institute or bank to monitor the smooth running of operations.
But for this means of payment to be reliable, secure and fast transactions must be guaranteed.
In fact, miners validate cryptocurrency transactions. Once validated, these are inserted into a block and when the block is complete, it is also validated and is in turn inserted into the chain, thus constituting a chain of blocks: the blockchain.
That’s the genius of this system: their very existence depends on them being secure. of their legitimacy. This is why the miner receives virtual currency on the way.
We hope we have been clear! But we haven’t answered all your questions yet. You are probably wondering how to mine and which crypto is eligible. This is what will interest us now.
How to mine Bitcoin with your PC ?
First of all, know that it is possible, since 2021, to mine from your mobile phone. There are apps that allow it.
But the most common method – and the most profitable – obviously remains the use of the PC, through dedicated sites and cloud systems.
You will first have to create a wallet, before you start mining.
If you are really looking to generate interesting income, it is advisable to devote a machine to mining, by acquiring what is called an ASICs (application-specific integrated circuit) which will not carry out any other task.
Because yes, to hope to become solver-in-chief of the equations allowing the security of crypto currencies and the creation of blocks, you need (very) good equipment.
Moreover, energy also plays a key role. The more powerful the machine, the faster the calculations but the more the system consumes electricity (and costs money).
Whatever happens, there is still an element of chance. You could invest in an entire fleet of computers…and still not achieve your goal. That’s why it’s important to stay reasonable. To weigh your interests.
Which cryptocurrency to mine?
Once you understand this principle, the choice of cryptocurrency is another matter. You can mine Ethereum (Classic or ETHW), or stay true to the mother of all virtual currencies: Bitcoin. Your choice will depend on stock market trends, in particular, which is yet another subject. But in general, all crypto currencies are eligible, from the most famous to the least known.
So it all depends on your strategy. However, we would like to inform you about the profitability of this practice.
Mining bitcoin : is it (really) profitable ?
For some, real estate is a phenomenal source of income, others have gone broke in a few years due to questionable planning or a high degree of bad luck.
When you want to mine crypto, it’s the same. There are great lucky ones who have gone so far as to abandon their work to devote themselves entirely to these virtual operations… and others who have tried it without ever really getting rich.
It is possible to earn good sums by mining bitcoin with your PC (or an equivalent currency), but it is not guaranteed. It depends on the material, the luck factor, the currency on which you have set your sights…
Also, we can ask ourselves questions about the future of mining.
- Many governments take a dim view of this practice. They fear an uncontrolled displacement of monetary circulation, the ever more invasive creation of a parallel economy. And in a sense, their fears are legitimate – if their interests are taken into account. So, can’t we fear that the laws are becoming more and more restrictive? That today’s miners are tomorrow’s hackers?
- The end of bitcoin mining has already been announced. Estimated, anyway. It is generally said that the last bitcoin will be mined for the year 2140. So certainly, we will probably not go that far, but it shows that like gold in the veins, these currencies are not eternal.
- It only concerned an elite, but now this operation is more and more popular. The COVID19 crisis has notably led to a multiplication of ambitious people. Won’t there be too much competition soon?
Before embarking on the adventure, ask yourself all these questions. We recommend it, in any case.
Mining Cryptocurrency : Our Review
Theoretically, mining cryptocurrency with your PC or mobile phone is within everyone’s reach. But in practice it is necessary to admit certain nuances.
Yes, validating transactions is very profitable for some.
But it is not an absolute guarantee of wealth, and it is therefore necessary to organize your project well.
Similarly, we advise against sacrificing any other gainful activity in favor of mining bitcoin or another cryptocurrency.
Crypto mining farms seem like El Dorado right now, but often the tide is turning in financial markets. And if you only have one lever of enrichment, the consequences are likely to be dramatic.
As in any other industry governed by a mixture of strategy and chance, one key word dominates : caution.