How to mine cryptocurrencies in 2022 ?
The term “mining” has become a must in the field of cryptocurrencies. It indicates various manipulations to be carried out on a network for those who wish to invest in this virtual currency. What exactly does this term mean ? How to use it efficiently ?
What is mining ?
Before focusing on the word “mining” and its implications on cryptocurrencies, first understand the Blockchain. Mastering this concept will be very useful for you to buy crypto, then, buy ethereum or another digital security.
The Blockchain technology is a register indicating the entirety of the interactions of the participants to this one. Each operator has its own version of this log for greater transparency. This way, each of the participants can see the actions of others and will not have the ability to falsify information.
Blockchain is also used to sell or buy cryptocurrencies.
” Miner of cryptocurrencies “is therefore an important activity. It has 2 purposes:
- Verify that crypto transactions are compliant ;
- And allow the emergence of new virtual currencies.
Mining is the right technique to reach them. To achieve this, miners must undertake various very complex actions. They must solve extremely complicated calculations.
This allows them to verify the transactions of a Blockchain and create a new one.
Is mining profitable ?
You will have understood it, mine cryptocurrencies is not an easy activity. This action requires the mastery of complex computing techniques and adequate equipment. The miner who succeeds in solving the Blockchain’s encryption algorithms can then ” seal ” the latter. In doing so, it can set up a new usable block.
This makes it then rewarded by virtual currencies.
“So mining can be a profitable activity according to certain criteria. Everything will depend on the value of the new cryptocurrency obtained, as well as the transaction costs on the Blockchain. The emission rate of this money also affects its value.
Finally, the rarer the virtual money, the more expensive it is. The rarity of crypto-currencies makes them more or less valuable. Thus, their mining can be profitable or generate losses.
For the past few years, a successful miner of a new blockchain has earned 6.25 BTC (Bitcoin) per block. At the end of 2021, this amount corresponded to 222 800 USD.
Which crypto currencies to mine this year ?
You want to mine ? So you need to identify the crypto-currencies that will offer you the most advantages. For the year 2022, some digital currencies stood out.
Since its inception and for many years, the Bitcoin is the reference in the field of crypto. This is due to its very high value. If you mine this currency, you can earn 6.25 BTC.
However, this activity is complicated because of the algorithms to decrypt and the expenses related to this action.
The Ethereum (ETH) is the second most mined crypto-currency in the world. Very innovative, this virtual money has a high market capitalization. The creation of a new blockchain will earn you 2 ETH. However, miners must hurry up and work. The upcoming launch of Ethereum 2.0 will lead to a modification of the current algorithms.
A readjustment of the knowledge and decryption methods to be used is then essential.
If you want to act on the long term, mine the Zcash (ZEC). Specializing in the protection of privacy, this crypto offers many opportunities for mining. For each successful action, you will get 2.5 ZEC per block.
However, you will need a powerful RAM to help you in decrypting the calculations of the technology.
How to mine cryptocurrencies ?
In order to mining cryptocurrencies, it is necessary to validate the transactions made on a blockchain. For this, you need to have :
- Mathematical knowledge;
- And a powerful hardware to perform various calculations to decrypt the blockchain.
Miners compete to see who will validate the data they obtain. This step is called ” the consensus protocol “and it can take 2 forms:
- The Proof of Work (PoW);
- Or the Proof of Stake (PoS).
Some blockchains use the PoW or proof of work in French. This step requires the solve a given equation to validate a transaction. This step requires high performance, hence the need for a adequate computer.
Once a miner has solved the equation, he validates the transaction and receives a fee for his work.
The PoS (proof of stake), as for it, does not require the resolution of an equation to validate a crypto transaction. This system is applied on some Blockchain like Ethereum. It uses validators who have invested money in digital currency to confirm transactions. The said agents are chosen at random and their mission is to to make sure that the latter is done properly. The money put into play by the validators is a guarantee of their involvement and probity.
So, if they work badly, they can lose their starting fund. On the other hand, they are rewarded with cryptocurrency for each validated block.
For those who are not familiar with the complicated concepts of crypto mining, there are simpler solutions.
You want to become a digital money miner, but you have a limited budget ? Turn to the Cloud Mining. This solution allows you to mine without investing in expensive means. For this, use companies with the right hardware and computing power.
Currently, many platforms practice Cloud Mining. They offer you contracts allowing you to create your own crypto wallet. You will then use it to work on a blockchain.
The said contracts take different forms. Some of them make you go through virtual private servers (VPS) that will work for you. Others make you rent the corporate services that will do the mining for you. Finally, specific contracts pay for the miners’ expenses in terms of hardware maintenance and power consumption.
However, this method is not very common because it is too expensive.
Cloud mining is an increasingly popular solution. By reducing the expenses of miners while allowing them to make profits, it is very popular. However, its growing popularity means that there are many scams about it.
You should therefore be wary of them before making any investment.
Open a Wallet and have an account on a Cloud Mining platform
For cryptocurrency miner, open a Wallet (wallet) on a Cloud Mining platform. The procedure is very simple. Start by creating your Wallet to have a digital currency fund. Your wallet can be physical in the form of a storage space or a USB key.
It can also be digital if it comes as an application on a smartphone or computer.
Once you have your wallet, register on a Cloud Mining platform. You will just have to give your email address and phone number, then create a password. Once your open profile, launch the mining operation. Go to the “Miner” tab of your personal space and click on it.
This step can be done from a computer or a phone depending on the platform.
Once the mining has started, you will only have to wait, because the platform takes care of all the necessary actions. You will then receive your income every 30 or 40 minutes. You will be able to use them for buy or resell digital assets. You only need to make sure you have an :
- monitoring the operations performed by the platform;
- renew these tasks every 4 hours.
What is a mining pool ?
Mining cryptocurrencies can be done by solo or in group. If you choose the second option, you will have to join a mining pool. You will cooperate with other miners to decrypt a Blockchain. This process facilitates this task.
The benefits obtained will then be shared equally between each miner.
The operation of a mining pool is governed by 3 distinct principles. The first is a the cooperative work protocol. The group will have to work on a block that has been assigned to it. The second principle is the use of a cooperative mining service.
This is done on a server. Each miner can then concentrate the computing power needed to decrypt a block. It allows you to maintain a good production rhythm and to make profits. The last principle is the use of a mining software. A mining program has specificities.
You have to choose the pool you are going to join.
Once you have integrated a group, the tool will send you data that you will have to decipher. As soon as you have finished your task, you can help another member of the pool by assisting him/her in his/her work. Thanks to the mining software, your activity is authenticated and you receive the appropriate payment.
Bitcoin or Ethereum mining equipment
As mentioned before, specific hardware is needed, whether it is for processing a Bitcoin or Ethereum block. Here are the essential elements to perform this activity.
For decrypt Bitcoin, provide yourself with :
- High-performancepowerful graphics cards that will perform the appropriate calculations;
- A quality mind map that will facilitate the hash rate needed for mining ;
- A powerful RAM to facilitate the calculations;
- As well as a large capacity hard disk that will host your operating system and your mining software.
For the Ethereum, you will have to focus on the graphic map, the keystone for the decryption of this cryptocurrency. You will obviously need the same things as when mining Bitcoin to store your data and work with it.
In addition to this basic material, you must also have other indispensable elements. A efficient power supply will be essential to meet the needs of your graphics cards (GPU). The more you have, the more energy it will require.
The constant use of electronic material also generates a lot of heat. To avoid overheating, you need a good cooling system air conditioning.
To help you mine Bitcoin or Ethereum, you need a wallet. As explained before, you will have the choice between an Physical wallet (physical media or USB keys) or dematerialized (on the web). Finally, you need to use the right mining software to conduct your various decryption actions.
Make sure that the tool you have chosen fully supports your operating system as well as your graphics card.