Everyone knows cryptocurrency is the digital revolution. Unlike paper currency, the cryptos are not printed; instead, they enter circulation by a process known as Mining.
Crypto mining is the way by which new cryptocurrencies enter circulation. It also plays a crucial role in the development and maintenance of the blockchain ledger.
It is performed using very high-end computers that solve highly complex computational math problems.
What is Mining?
Since there is no single authority present in cryptocurrency, it runs on the mechanism of Blockchain, which is truly decentralized.
Crypto is not only decentralized but also a distributed system. The record (ledger) of all transactions is available publicly and stored on numerous computers in a network in real-time.
Now you must be wondering then how the transaction is getting verified before getting added to the ledger?
Cryptocurrency uses cryptographic algorithms for transaction verification rather than using a central banking system.
To answer your query, this is where the miners come into action.
The people who run the system are known as miners.
A lot of computing work is required to perform the calculations for each transaction.
The miners use their computers to perform the calculations required to add a new transaction in the ledger.
Why Mining?
The miners get an amount of the cryptocurrency themselves for the computation work done by them.
Miners are paid for the work they do as an auditor to verify the legitimacy of Bitcoin transactions.
The primary purpose of Mining is to monitor and legalize Bitcoin transactions along with ensuring their validity.
The miners verify the transactions.
For example, you want to send any crypto to your friend; the miner will confirm whether your account has the required amount of crypto or not. To complete these transactions, the miner will solve a complicated mathematical equation with the help of high processing power computers.
Once the equation is solved, the other computers on the same network, confirm it and then the transaction adds to the chain.
Now a block of these transactions gets created, and this technology is known as the Blockchain.
Mining rewards are paid to the miner who discovers a solution to a complex hashing puzzle first. The probability that a participant will be the one to find the answer is related to the portion of the total mining power on the network.
It would be best to set up a bitcoin mining rig if you had either a GPU (graphics processing unit) or an application-specific integrated circuit (ASIC).
How to Mine?
After knowing all the benefits of mining to start your Mining, there a few minimum items which you should have:
A minimum 6GB graphics card that provides a decent amount of hash rate is required for profitable Mining.
An Intel Pentium or Celeron processor.
You can also mine with your CPU power, but we will not recommend it as it is not profitable.
At most, you can get 10–12INR per day by Mining with CPU.
A Profitable investment for Mining would be:
a. A best budget graphic card can be as low as an RX-580 and above
b. Power supply — 800Watts
c. Ram — 4GB or above
d. Mining Software (can be easily downloaded from the net)
You can calculate the profitability here (Profitability Calculator | Nice Hash)
A single RX-580 GPU earns 150INR daily on an average.
After arranging all the necessary hardware and software, you need to:
1. Get a crypto wallet
The rewards which you will earn after Mining will be stored in this wallet.
A suitable option for beginner miners would be a software wallet.
It is easily manageable, and you can manipulate the mined currency frequently.
Easily downloadable and completely safe.
2. Join a mining pool
Your single machine is not capable of competing with the large mining farms over the globe.
So, to resolve this issue, the mining pools exist.
Mining pools means cooperation between the miners.
Choose a mining pool and register to set your account.
3. Get a mining software.
Now, you have the hardware, a wallet and a Mining pool membership; you need a mining client for your computer that will connect you to the network and Blockchain.
Beginners are suggested to use Nice Hash Miner.
It is easy to use and can mine multiple currencies and chooses the most profitable algorithm.
4. Start Mining
You made it! Now, start mining and earn rewards.
Few advices to send you off
1. If you want to be a profitable miner, keep a track of the crypto world.
The development changes daily and goes ahead at a swift pace.
2. If you find mining profitable then you can also set up your mining rig.
A Mining rig is a computer with multiple graphics cards instead of a single GPU.
To get a deeper insight about cryptocurrencies and LendenX, follow the link:
https://lendenx.medium.com/lendenx-your-new-trading-partner-10d30f38f3e9
* This article is for knowledge; we advise you to ask your financial experts before taking any investment decisions. *
