When you mine a crypto asset you add transactions to the blockchain or public ledger. So, mining is important to confirm transactions and to ensure that this network can be accessed by one and all. Mining is also needed to differentiate legitimate transactions from incidents of double-spending. Every time a miner successfully mines a block, he gets what is called a “crypto reward” that can be exchanged on trading platforms such as the bitcoin evolution.
What you need to get started with mining:
- Hardware: To start with, you will need to select mining hardware. Given the complexity that mining involves, you have to make a choice with caution. So, you should take into account some key factors like hash rate, energy consumption etc. Hash rate refers to the number of mathematical calculations that the hardware can perform each second; so, a higher hash rate means higher chances of solving a problem and getting a reward. Energy costs are another key factor since the more powerful your hardware is the higher will be its power consumption. Initially, miners used regular computers to mine cryptocurrencies, but as the mining level became more difficult, they switched to high-end computers with graphic cards. It is possible to mine on your own by setting up a mining rig, or join a mining pool. Mining farms run independently obviously cost a lot of money.
- Mining software: You need to select the right kind of mining software depending on the type of hardware you have selected. Standard Bitcoin mining software is needed when you use FPGAs and GPUs. The Bitcoin client will be responsible for relaying information between the network and the client while the software will tell the hardware what to do. Most of the recent ASIC miners have all these requisite features pre-installed, so you simply plug this into an outlet and you are good to go.
- Mining Pool: When you step into the world of mining you are going to compete with the massive mining farms and big companies. So, it is important to decide at this juncture whether you should mine on your own, or join a mining pool. Earning rewards is easier in a pool because the payouts are bigger. Multiple users are contributing their computing powers to a pool, increasing the chances of solving blocks. To join a mining pool, you must sign up and create an account. But you must consider the reputation of the pool, its credibility, the transaction and joining fees, etc. before you sign up.
Bitcoin mining has come a long way from some early enthusiasts solving problems on their individual computers to a full-fledged industrial-grade venture. Anyone can do mining, at least in theory, but in practice, making profits is a challenge with specialized high-end computers that use up too much electricity. So, unless you can invest in large mining farms or get cheap electricity, making money through mining may be hard. Individual miners frequently have to face glitches like power outage, hardware malfunctioning, price crashes and network disruptions. This makes home mining less desirable, but things might change in the future. The ASIC mining software keeps getting advanced and cheap power solutions are making an appearance.