Crypto mining is all the rage these days, but even with its impressive growth there are many people out there that simply have no idea what it is or how to do it. In most cases, the value of cryptocurrency is what has caught most people’s attention, but you need to understand what crypto mining is and how to do it in order to make any money from it.
What is Cryptocurrency?
Cryptocurrency, otherwise known as cryptocoins, or crypto for short, are a type of digital currency that are powered by blockchain technology. These coins don’t have any physical representation in the real world and are completely digital.
Chances are you have heard of Bitcoin, the most popular digital currency, but Bitcoin isn’t the only digital currency out there. Litecoin, Feathercoin, and Ethereum are a few other popular alternatives for miners these days, as well.
How Crypto Mining Works
When you hear the term “mining,” you probably think of a digging up gold or something like that. However, cryptocurrency mining is a little different. When you mine for cryptocurrency, you are essentially providing accounting transaction processing for whatever network you have joined. The coins that you “mine” during these processes are actually payment to you for allowing the network to use your computer’s processing power for the transactions.
When you mine for cryptocurrency, you connect to a pool made up of other miners on the network and perform these transactions. These pools allow you to combine the processing power with others to increase your earnings.
How Much Can You Make?
The burning question in your mind is how much you can realistically make mining cryptocurrency. The answer, however, is far from simple. There are many factors that impact the amount you can earn from mining cryptocurrency. They include:
- Type and value of the cryptocurrency you are mining
- How much time you can devote to mining in a 24 hour period
- The processing power of your computer/computers
- Cost of Electricity in Your Area
In the most basic setups, you can probably earn a dollar or two a day. This may not sound like much, but if you are using your existing computer equipment, it’s not a bad deal. If you are willing to invest around $5,000 to start your mining hobby, you could earn as much as $50 a day or more depending on the value of the currency.
What You Will Need for Crypto Mining
Before you can begin mining for that first coin, there are several things you will need to get you started on your mining journey.
1. Coin Wallet
Just like your regular money, you need someplace to keep your coins. A coin wallet is a virtual, password protected wallet that stores all your earnings and keeps a network-wide ledger of all your transactions. There are many choices out there, but this list should help you find the right one for you.
2. Mining Software
If you plan on mining, you are going to need the software to do it. The software is what will be doing most of the heavy lifting performing the online transactions and collecting your coins. There are several options out there, but to get you started you could try the software made by AMD.
3. Mining Pool Membership
A mining pool is a group of miners that pool the resources of their computers to increase their transaction power. With more people, you increase your chances of earning coins when mining. While it’s not required, you do have a better shot of earning more when you sign up to a mining pool.
4. Online Currency Exchange Membership
Once you collect a few coins, you need some way to exchange them for traditional currency that can be used anywhere. There are many different online currency exchanges out there that you can do to buy and sell your cryptocurrency.
5. Stable Internet Connection
Because you will be performing transactions across the Internet, you will need a fast, stable Internet connection in order to profit from crypto mining. Lost connections and slow speeds means you will lose money, so make sure your Internet is fast and stable before you begin.
6. Decent Computer
Crypto mining makes use of graphics cards with ASIC chips. Currently, the AMD video card range are the most popular for miners, but NVIDIA GeForce cards will work just as well. Whatever you do, don’t use a laptop. It simply doesn’t have the video power of a good desktop or the cooling capabilities needed for effective mining. Remember, your mining power will be determined by your video card or cards, so if you are investing in a rig specifically for mining, put your money in the graphics cards.
7. Patience and Time
Like anything in life, crypto mining takes time and patience. It’s not a get rich quick scheme. Even with a significant investment in hardware, it will take time for you to earn enough coins to recoup your investment and start making money.
8. Desire to Learn
There are many scams out there, and no one is going to hold your hand and tell you which currency is good and which one is bad. New currencies are popping up all the time, and true success will come to those who recognize the potential of new currencies and the risks involved in investing in these new currencies.
Crypto mining is more popular than ever as more and more people recognize the value of a virtual currency on the Internet. While it does take a little patience, earning cryptocurrency is relatively easy. While it’s not a get rich scheme and there is some risk like any investment, with a little research and patience it could create a nice bonus income for you.