Cryptocurrency Mining: A Complete Guide For Beginners
Although most people have heard of cryptocurrency mining, they don’t know about it profoundly. The cryptocurrency mining is not under government bodies or any other third party. Every miner on the blockchain network will have equal power over cryptocurrency mining. Cryptocurrency Mining Adding blocks of transactions to the existing blocks and releasing a new cryptocurrency are the two functions performed in the cryptocurrency mining. Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Monero (XMR), ZenCash (ZEN), FeatherAeon (AEON), etc. are the cryptocurrencies which can be mined. How Cryptocurrency Mining Works When Alex sends a cryptocurrency to Bob, then a new block of this transaction will be created. Miners will engage in solving a hash function using consensus protocols like proof-of-work (PoW). They have to find a nonce in order to solve the hash function. When a miner solves the hash function at the first, then the miner will be able to add the new block to the existing blockchain. He will be rewarded with new validated tokens. Solving the hash function means mining the block. Block A block has a nonce, a hash of the present block, an index value of the present block, a timestamp, and a hash of the previous block. They all will be generated from a new transaction. Nonce A nonce is a 32-bit arbitrary number. It is used only once. Proof-of-work (PoW) PoW is used to achieve a consensus among miners or devices on a distributed blockchain network. If a 51% consensus of the miners is reached, then the first miner will be able to add the new block. Hash Function A hash function is a mathematical equation used to convert a message of arbitrary size into a bit string of a fixed size. 'Hash value', ‘hash’, 'message digest', 'digital fingerprint', 'digest' or 'checksum' are other names of the bit string. More hash rates mean the higher chance of solving the hash function as soon as possible. A hash rate is a speed at which a computing work is done. Things To Mine Cryptocurrency A cryptocurrency wallet, mining software, a mining pool membership, a cryptocurrency exchange account, an internet connection, a hardware set up location, a custom-built computer, and an application-specific integrated circuit (ASIC). Cryptocurrency wallet: It helps users to send, receive, and hold their digital currency. Mining software: Delivering works to crypto miners and receiving the complete works from them are purposes of mining software. Hardware set up location: A hardware set up should be located into an air-conditioned space as a computing work will heat up your hardware at the extreme level. Internet connection: An uninterrupted, full-time, and speedy internet connection is required. Crypto exchange: It is a platform used to connect buyers and sellers across the globe. It is a place where anyone can buy, sell, and hold a cryptocurrency. Open an account. Custom-built computer: A custom-built computer is a specialized computer ideal for mining purpose. Pool Membership: It is required to involve in a community of crypto miners. ASIC: It improves speed and uses less electricity. Crypto Mining Malware Crypto mining malware is a malicious software program. It takes the processing power of computers, smartphones, tablets, and other electronic devices. Users won’t come to know when the processing power of their electronic devices will be taken. Mining cryptocurrencies is the purpose of taking the processing power. The users will be directed into downloading the malicious software program via email attachments. They unknowingly visit some websites which run the malicious software program stealthily. The malicious software program heats up batteries of the electronic devices and damages the electronic devices physically. 2017 was the year of the crypto mining malware. The crypto mining malware attacks reached up-to 116, 361 in October 2017. Japan, India, Taiwan, the U.S., and Australia were the affected countries. A malware called WannaMine was designed to mine a cryptocurrency called Monero. A computer of a victim was infected stealthily by the malware WannaMine. The computer is used to run complex decryption routines for the creation of a new Monero. The new Monero was added to the digital wallet of a hacker. The malware WannaMine is based on a cyberattack exploit called EternalBlue. High Electricity Consumption Cryptocurrency mining is very expensive because it requires tons of electricity. Most cryptocurrency minings are carried out in China and Russia. China and Russia are the two cheap electricity places. In 2017, Bitcoin mining had consumed electricity which is more than 159 countries. According to July 2018, the power consumption for the servers of the Bitcoin software was estimated to be a minimum of 2.55 gigawatts (GW) at the global level. Below calculations as per August 2018, according to ofnumbers site. Bitcoin i. S9 Antminer power consumption capacity= 1,500 Watts ii. One S9 Antminer power consumption per day= 1,500 x 24 = 36kWh per machine per day iii. 3,846,000 S9 Antminers power consumption per day= 138.4 million kWh / day iv. 3,846,000 S9 Antminers power consumption per year= 50.5 billion kWh / year 2. Bitcoin Cash i. 327,000 S9 Antminers power consumption per day= 11.77 million kWh / day ii. 327,000 S9 Antminers power consumption per year= 4.30 billion kWh / year 3. Ethereum i. Innosilicon A10 power consumption capacity= 850 W ii. One Innosilicon A10 power consumption per day= 20.4 kWh iii. 618,557 Innosilicon A10s power consumption per day= 12.6 million kWh / day iv. 618,557 Innosilicon A10s power consumption per year= 4.6 billion kWh / year 4. Litecoin i. L3+ power consumption capacity= 800 W ii. One L3+ power consumption per day= 19.2 kWh per day iii. 600,000 L3+s power consumption per day= 11.5 million kWh per day iv. 600,000 L3+s power consumption per year= 4.2 billion kWh per year 5. Monero i. Vega 64 power consumption capacity= 160 W ii. One Vega 64 power consumption per day= 3.84 kWh per day iii. 237,500 Vega 64s power consumption per day= 912,000 kWh per day iv. 237,500 Vega 64s power consumption per year= 332 million kWh Pre-mined Cryptocurrency A pre-mined cryptocurrency means a cryptocurrency which was mined before its official launch. Developers and cryptocurrency exchanges perform unscrupulous & unfair practices. The pre-mined cryptocurrency is safe from unscrupulous & unfair practices. Stellar Lumens (XLM), Ripple (XRP), Cardano (ADA), and NEO (NEO) are some of the pre-mined cryptocurrencies. Stellar is a decentralized and open-source protocol which has a payment network called Stellar network and a cryptocurrency called Stellar Lumens (XML). Cross-border transactions are supported through Stellar. Ripple is a gross settlement system which a network called RippleNet and a cryptocurrency called XRP. Cardano is a decentralized and open-source blockchain which has a cryptocurrency called Cardano (ADA). NEO is an open-source and community-driven platform designed for decentralized applications (DApps). It has a cryptocurrency called NEO (NEO). Types Of Cryptocurrency Mining Cryptocurrency mining is done with thoroughness. Although it is expensive, it provides more profit. Solo mining, pool mining, and cloud mining are three types of cryptocurrency mining. In solo mining, an individual miner performs crypto mining tasks without taking help from other miners. No one will be credited from the profits of the miner. The miner will be rewarded completely. Some of the best solo mining cryptocurrencies are PeerCoin (PPC) and DogeCoin (DOGE). In pool mining, a group of miners solve a mathematical equation together and share profits equally. Some of the best pool mining cryptocurrencies are RavenCoin (RVN) and Electroneum (ETN). In cloud mining, a miner needs to register and purchase a mining contract or share from any mining company. Some of the best cloud mining cryptocurrencies are Bitcoin (BTC) and Ethereum (ETH). Cryptocurrency Mining Calculators Cryptocurrency mining calculators are used to calculate cryptocurrency mining profitability. WhatToMine, CryptoRival, CryptoCompare.com, Crypt0.Zone, NiceHash, BTC.com, and CoinGecko are some of the cryptocurrency mining calculators. Rate against the dollar, mining difficulty, mining difficulty increase per year, hash rate, power consumption, electricity cost, mining pool fees, bitcoin reward per block, and cryptocurrency price are the factors on which cryptocurrency mining profits depend. Read the full article
