Udemezue John
Introduction.
One thing I like about the cryptocurrency world is that it gives a chance for everyone to make money, cryptocurrencies provide ways for almost everyone to become entrepreneurs and at the same time work at their own pace.
Just in case you don’t have a basic understanding of how cryptocurrencies work, I wrote a comprehensive guide to help you get started, you can check it out by clicking the link to the article below.
There are so many ways to make money in cryptocurrencies without any boundaries, and this is why it has become an unstoppable global movement.
The traditional way to invest in cryptocurrencies involves staking your fiat currencies into your prefered coin via a crypto exchange such as Binance, but there are several other ways to make money in cryptocurrencies without staking a dime into the system and this is called Cryptocurrency Mining.
What is Cryptocurrency Mining?
Crypto mining refers to the process of obtaining cryptocurrencies by resolving cryptographic equations with the use of high-power computers.
The solving process comprises verifying data blocks and adding transaction records to a public record (ledger) known as a blockchain. That is secured by applying complex encryption techniques.
Putting it all in layman’s terms Cryptocurrencies are designed in such a way that they are decentralized which makes it a multiple-man business.
There are various cryptocurrencies transaction going about every second and a certain group of people needs to verify the authenticity of this transaction to be added to the blockchain ledger, this group of people are called Miners.
In a centralized setting, a singular entity would be assigned to do this, but because cryptocurrencies are decentralized, just anyone with the right tools and software can get started in minutes, also note that mining cryptocurrencies come with a reward.
As the outcome of this work, the miners receive pay with cryptocurrency. This method is called mining as it allows new coins into circulation.
Why Should I Mine Cryptocurrency?
Cryptocurrency mining refers to the process of verifying transactions on a blockchain network and adding them to a public ledger, also known as a block.
Miners are incentivized to participate in this process through the reward of newly minted coins and transaction fees. Mining cryptocurrencies offers a range of benefits, including:
1. Decentralization.
Cryptocurrency mining helps to maintain a decentralized network, as miners from all over the world can participate and help validate transactions.
This ensures that no single entity or government has control over the network, and helps to maintain the integrity and security of the system.
2. Income generation.
Miners can earn significant amounts of money through the reward of newly minted coins and transaction fees.
With the increasing popularity of cryptocurrencies, the demand for mining is also increasing, leading to more opportunities for income generation.
3. Low barrier to entry.
Unlike traditional investments, anyone with a computer and internet connection can participate in cryptocurrency mining.
This low barrier to entry makes it accessible to a large number of people and can help to democratize access to financial opportunities.
4. Environmental sustainability.
As the demand for cryptocurrencies continues to grow, so does the need for energy-efficient mining methods.
Some cryptocurrencies, such as Ethereum, are moving towards a Proof of Stake consensus algorithm, which is more energy-efficient compared to the Proof of Work algorithm used by Bitcoin.
This helps to reduce the carbon footprint associated with cryptocurrency mining and makes it more environmentally sustainable.
5. Support for the cryptocurrency ecosystem.
By participating in cryptocurrency mining, individuals can help to support the underlying network and ensure its continued growth and development.
This is important for the long-term success of the cryptocurrency and can help to maintain its value and stability.
How To Start Mining Cryptocurrencies.
The main purpose behind mining is to be able to crack cryptographic codes and authorize the necessary transaction so that they can be added to the public blockchain ledger.
In this section, I am going to be spelling out steps to help you get started with mining cryptocurrencies.
1. Get Equipped With The Right Tools.
Your success as a cryptocurrency miner depends on how to set up and equipped you are. Just before getting started with cryptocurrency mining, you need to get the right tools in place.
One of these tools includes a powerful Computer to start with, also make sure this is your spare computer because mining will fry the chip of that computer.
I recommend you get an extra computer for this. You should not make use of your personal computer for mining purposes.
2. Own a Cryptocurrency Wallet.
Crypto wallets keep your private keys – the passwords that give you access to your cryptocurrencies – safe and accessible, allowing you to send and receive cryptocurrencies like Bitcoin and Ethereum.
They come in many designs, from hardware wallets like Ledger (which looks like a USB stick) to mobile apps, which make using crypto as easy as shopping with a credit card online.
Unlike a normal wallet, which can hold actual cash, crypto wallets technically are designed to hold all your cryptocurrency assets.
Your holdings live on the blockchain, but can only be accessed using a private key. Your keys prove your ownership of your digital money and allow you to make transactions.
If you lose your private keys, you lose access to your money. This is why I recommend you keep all confidential details of your wallets as safe as possible.
The next tool you need is a cryptocurrency wallet, and you can set it up for free. A cryptocurrency wallet helps you get paid when you mine successfully.
If you don’t already own a cryptocurrency wallet, I recommend you get on Binance.
3. Choose a Mining Provider.
Different methods of mining cryptocurrencies require different amounts of time. In the technology’s early days, for example, CPU mining was the best option available at that time.
In the long run, many found CPU mining to be too slow and useless today because it takes months to accrue even a small amount of profit, given the high electrical and cooling costs and increased difficulty across the board.
GPU mining was another method of mining cryptocurrencies developed as an upgrade to CPU mining. It maximizes computational power by bringing together a set of GPUs under one mining rig. For GPU mining, a motherboard and cooling system is required for the rig.
Similarly, ASIC mining is yet another method of mining cryptocurrencies. Unlike GPU miners, ASIC miners are specifically designed to mine cryptocurrencies, so they produce more cryptocurrency units than GPUs. However, they are expensive, meaning that, as mining difficulty increases, they quickly become out-of-date.
Given the ever-increasing costs of GPU and ASIC mining, cloud mining is becoming increasingly popular. Cloud mining allows individual miners to leverage the power of major corporations and dedicated crypto-mining facilities.
Individual crypto miners can identify both free and paid cloud mining hosts online and rent a mining rig for a specific amount of time. This method is the most hands-free way to mine cryptocurrencies.
When you read up resources on cryptocurrency mining online, all you read about is needing a whole bunch of servers, computers or even huge access to electricity for you to become a successful miner.
Thinking of that alone makes you want to lose your mind about the whole process because it just seems too difficult to start.
However, the non-stop technological innovation has made it possible for interested individuals to begin mining cryptocurrency at a simpler and affordable cost.
1. Nicehash.
NiceHash is an online marketplace for buying and selling your computer’s processing power to mine cryptocurrencies.
This processing power is known as hashing power in cryptocurrency terminology. Nicehash allows you to rent your computing power to mine cryptocurrencies.
It is like an exchange service where you’re exchanging computing power for Bitcoin or one of many other cryptocurrencies that use proof-of-work mining.
NiceHash has been in business since April 2014, so they know quite a bit about cryptocurrency mining and exchange. Since opening its virtual doors, NiceHash has become the largest hash power marketplace in the world, with over 250,000 daily active miners, more than 3.3 million orders served, and over 181,000 BTC paid out.
Nicehash uses cutting-edge technology in its infrastructure and delivery. Each registered user also receives a secure and insured BitGo wallet for BTC deposits.
NiceHash has earned the trust of cryptocurrency supporters around the world. One other reason for the success of NiceHash is its low fees and ease of use, making it a good choice for first-time miners just getting their feet wet.
NiceHash can be used by both sellers of hashing power and buyers of hashing power. This significantly expands its potential user base, and some sellers also become buyers and vice-versa.
If you’re looking to sell hashing power, NiceHash makes it very easy to do so, no matter what kind of rig you’ve got. You can sell hashing power from a CPU, GPU, and ASIC rig or an entire rig farm if you want. You can also choose your algorithm and the location of the servers you’re mining with.
As a miner, you get paid in Bitcoins. The amount depends on the amount of hash power that you provide to NiceHash.
TRY IT NOW – Nicehash.com
4. Choose a Cryptocurrency to Mine
The section before now explained how anyone could mine Bitcoin specifically, mind you that thousands of other altcoins also need to be mined.
Just as Bitcoin is mined for rewards, altcoins can be mined for possible rewards too. There are over 5K altcoins and still counting, each offering their specific rewards to miners in their respective ecosystem.
You can take advantage of them and begin mining for rewards. In this section, I will pick out a few altcoins and show you how you could mine them for rewards.
1. Ethereum.
Ethereum is a decentralized blockchain network powered by the Ether token that enables users to make transactions, earn interest on their holdings through staking, use and store nonfungible tokens (NFTs), trade cryptocurrencies and build dApps.
Ethereum has grown to be one of the biggest cryptocurrencies in the world, taking the world second stage according to the coin market keep and luckily, things keep getting big because of its useful ecosystem.
So many web3 apps are already being built on its system with a huge number being added seasonally.
Eth is the native token used on Ethereum to make transactions on the network. As of the time of writing, Eth is worth over $4,000 and still growing massively. The workload on Ethereum makes it a one-stop platform for any who wants to make money mining.
2. Solana.
Solana, a blockchain network that launched in 2020, is being seen by many as a competitor to Ethereum.
It is also known as a fifth-generation blockchain with a speed of over 50,000 transactions per second (TPS), far greater than Ethereum which does between 15 and 45 transactions per second (TPS) currently.
Bitcoin uses a proof-of-work validation model and some others use proof-of-stake. But Solana uses a proof-of-history model, which is how it can process transactions so quickly.
SOL is the native token for Solana and is worth over $135 as of the time of writing this article. It has been speculated to hit more than what it currently is in the nearest future.
The cryptocurrency has grown about 16,000 per cent since January last year (2020), and presently trading around $241 and has gained a market capitalisation of $73 billion according to CoinMarketCap making it number 6 in the whole world.
5. Start mining
With your hardware, mining pool, and software all setup, you’re ready to start mining. The mining process involves solving complex mathematical problems to verify transactions on the blockchain network. As you mine, you’ll be earning rewards in the form of newly minted coins.
Conclusion.
Mining cryptocurrencies can be a great way to earn digital assets and potentially make a profit. By following these steps, you can get started on your journey as a cryptocurrency miner.
However, it’s important to keep in mind that mining can be energy-intensive and may not always be profitable.
Before starting, make sure to do your research and consider all of the potential costs and rewards associated with mining.
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