Crypto community

Earnings from cryptocurrency mining

While traditional money is issued by Central Banks of different countries, cryptocurrency is “produced” by miners – people who provide the computing power of their equipment to support the network and receive a reward in the form of digital coins for this. Note: the above applies to currencies that work on the Proof-of-Work algorithm, including Bitcoin. Many coins work on Proof-of-Stake and are mined by staking, which we will also talk about in this article.

Theoretically, you can mine on anything, even on a mobile phone. However, it will not always be effective and cost-effective. Therefore, the following main types of mining are distinguished:

On the CPU (processor). The advantage is that you do not need to buy separate equipment, but you can earn on a regular computer. The disadvantage is low power. Earnings will be insignificant, since expensive coins (such as Bitcoin) are already too difficult to be obtained in this way. But there is an opportunity to mine new promising altcoins on the processor, and then put them into circulation.

On the GPU (video card). Take one, and more often several powerful video cards. The cards are combined into a single system (“farm”). The total power of such a system is very high, so this method can be used to mine many popular cryptocurrencies, although for Bitcoin this is not enough.

On ASIC (specialized chips). The main difference between ASICs and video cards is that they are designed only to work with a certain hashing algorithm, and a video card can work with any and allows you to switch from one to another if necessary, start mining another cryptocurrency. But ASIC has the highest power. Today, only with its help can you mine Bitcoin.

The relevance of mining depends entirely on the current state of the market. When it is in decline, many leave the business, and when it comes back to life, it makes sense to mine again. At the moment, many see prospects in mining altcoins. Bitcoin is gradually becoming the prerogative of large companies that have the ability to create entire farms from expensive ASICs.

There is also cloud mining, when the equipment is owned by a company that rents it out to users for a certain percentage. This option is chosen by those who want to try to earn money on cryptocurrency, but are not ready to invest in equipment, take care of it and update it in a timely manner

Mining is a process of mining cryptocurrency, in which network participants use the computing power of their devices to verify transactions and create new coins.

Pros:

High income potential.

Blockchain support.

Cons:

High cost of equipment.

High power consumption.

Cloud mining. This type of mining allows you to mine cryptocurrency without having to buy equipment. Instead, users rent computing power from specialized companies.

Pros:

No equipment required.

Suitable for beginners.

Cons:

High risk of fraud.

Less profit compared to traditional mining.