What Is Cryptocurrency Mining?
A crypto miner can earn their chosen asset by using their computer, rather than
crypto trading
through a
crypto exchange.
Mining is a process of confirming and authenticating any new transactions to the blockchain. The process itself involves completing complicated mathematical problems with cryptographic hash functions associated with a block of transactional data. Once you have completed 1MB worth of transactions, also known as a block, you will be rewarded with your chosen asset.
In simple terms, if your computer successfully helps towards the mining of a coin, you will receive your reward.
However, due to the ever-growing demand and popularity of cryptocurrencies, it was only a matter of time before faster and stronger hardware was also needed. The increased performance of hardware comes with an inflated price, making it difficult for lone miners to reap as many benefits.
Mining is still a legitimate money-making option for those interested. If the initial start-up cost is putting you off, please have a look further down in our 2024
crypto broker reviews, as we discuss the costs and effectiveness of hardware and cloud mining in more detail.
Our Top Steps for Safe & Secure Crypto Mining in 2024
First, you will need to purchase, or rent (discussed later), a mining rig. This hardware is imperative to turn your cash-on-the-side into a second-income. Some of the most powerful machines in the world can have as many as 1012 attempts at solving a block, per second – so choose wisely!
Once you have selected your hardware, we recommend putting your machine into a professional data centre. The fees that come with this are far more reasonable than trying to run the machine from home.
If you haven’t already by now, open an online crypto wallet or buy a hardware wallet for some extra security. Your online wallet works just as an everyday wallet would and is where you will store all of your mined assets. You will have a public key, which is used as an address to receive crypto and a private key, used as a means to send crypto. Be sure to keep your private key safe.
A single machine will not be as effective as a pool of miners, so be sure to join a mining pool if you are after steady, consistent returns. We discuss later in this crypto mining 2024 review the best pools/platforms in the current market.
Almost there! With the acquisition of your hardware, a new wallet, and a new group of mining pals it is time to download software (if your pool does not have this function built-in) to run on your computer. This software connects you to the blockchain, monitors your activity and shows your current temperature, hash rate, mining speed etc.
Once all of these steps have been followed, and you’ve linked your crypto wallet to your mining pool account, or software account, you are ready to mine!
Hardware Mining
Purchasing your own hardware is the best way to ensure you keep all profits, minus platform fees, from any successful mining activity. Depending on your intent, mining can be done on your home laptop. However, if you are looking at this as a second income, then the initial setup of a more intricate mining system will be needed.
The most profitable systems make between $6 and $15 a day. Before you spend your money on a hardware mining setup, we recommend using a mining calculator to discover if it is worth the returns.
The four main categories of Hardware mining are:
CPU Mining
It is possible to use your own computer to mine cryptocurrency. However, due to the development of new hardware, it is now deemed a waste of time and is used by much fewer people. The main reason for this is speed, CPU crypto mining is slow, you may go several months without seeing any profit at all and could quite easily end up spending over ten times the amount on electricity and cooling.
GPU Mining
GPU mining is particularly popular due to being so efficient and relatively cheap to set up. GPU rigs use graphics cards to mine cryptocurrencies, and a standard set up could see anywhere between 2-8 of these graphic cards used (as well as the obvious processor, motherboard, cooling and rig frame). The average cost is around $3000, which is why you will often find cloud miners (discussed below) with warehouses full, ready and waiting to be linked to your account.
FPGA Mining
The Field Programmable Gate Array (FPGA) can be precisely programmed and reprogrammed for a desired application/function, for example, mining Litecoin. Consuming far less power and performing much quicker than the CPU and GPU, the FPGAs only downsides are the cost and the time it takes to reprogram the device.
ASIC Mining
As the name suggests, Application-Specific Integrated Circuits are designed to perform a single specific task, crypto mining. With relatively low power consumption, ASICs generate a phenomenal amount of cryptocurrency compared to the CPU & GPU. They also cost a remarkable amount, when compared to the CPU & GPU, as the specificity of the chips becomes time-consuming to produce.
They are often met with controversy due to making the CPU & GPU approach almost redundant.
A single miner, with an ASIC crypto mining farm, could rob 100s of CPU & GPU user’s chances of mining successfully.
Cloud Mining
Cloud mining is the process of mining Bitcoins, and other assets, by using a remote data centre with shared processing power. A cloud company will purchase the physical mining hardware and will make money back by renting them out to miners who do not have the facility to host hardware themselves.
A cloud crypto mining company will set up a mining rig and maintain the facility. A cloud miner will register and purchase contracts from the mining company. The mining company will then allocate its hardware to your account, and any profits generated by the rig will be transferred directly to your
crypto wallet
(minus fees). Cloud mining companies will make their money from initial rental fees, taking a percentage of any rig profits, maintenance and electricity costs.
The three main forms of Cloud mining are:
Physical Mining Server
Physical Mining server, simply known as Hosted Mining, is a type of cloud crypto mining based on an agreement between yourself and the cloud mining provider to lease their equipment. Once you have agreed on the time period, you have the option to physically receive the machine for this duration, or you can opt for the provider to store it for you with the company itself.
Virtual Private Server Mining
Unlike Hosted mining, you will not be leasing mining hardware with this approach. Instead, you will install your mining software on the cloud mining provider’s machine. This process is best suited for smaller alt-coins which are predominantly mined with CPU (mentioned earlier).
Leased Hashing Power
The simplest, and most popular, approach to Cloud crypto mining is leased hashing power. Hashing power can be purchased from a cloud mining service provider, with no need to install any software or lease a machine from any crypto mining companies!
Now we have explained the differences, pros and cons of hardware and cloud mining; it’s time to discuss the best 2024 crypto mining platforms. These are the best platforms to pair with your latest CPU, GPU or ASIC hardware purchase, to ensure you are getting the best returns for all of your hard work… & money!
These platforms aim to deliver work to the miners, ensure the mining speed, current temperature and hash rate are at a sufficient and productive level, as well as collecting any rewards. So, which ones do this best?
Genesis
Genesis crypto mining platform has been operating since 2013 and is one of the oldest mining service providers to date. They offer their service to over 2 million customers spanning over 100 countries and own several crypto mining farms located in Europe, America & Asia. They offer Custom, Gold, Platinum & Diamond contracts with varying prices progressively offering higher returns, for a higher initial outlay.
f2pool
Initially launched in Beijing, f2pool is now available in the US, Canada and more. F2pool is currently the second-largest Bitcoin mining pool on the market and has options for users to mine over 40 different cryptocurrencies, including Litecoin and Zcash. Their Fees are slightly higher than most platforms out there (4%); however, you receive regular pay-outs, and their threshold is relatively low.
Poolin
Started by the founders of BTC.com, Poolin is open to crypto miners all over the world. As a bonus income, when you mine Bitcoin, BCH, or BSV in ‘merged mining mode’, you will also receive pay-outs in Vcash, Namecoin & Dogecoin. Poolin has created a simple platform that enables new miners to understand and benefit from the crypto world.
Antpool
Antpool is free to join and has a simple sign-up process. The platform holds roughly 15% of the total hash rate of all Bitcoin mining pools and is run by the world’s largest Bitcoin mining hardware manufacturer, Bitmain Technologies Ltd. Although Antpool does not charge fees, it also does not disclose the collected BTC transaction fees.
Slush Pool
Originally named “Bitcoin Pooled Mining Server”, Slush Pool has been on the market since 2010, and their users have mined well over 1 million Bitcoins in that time. The platform itself is straightforward to use and accommodates miners from all knowledge backgrounds. A nice perk to Slush Pool is the reward scheme, offering awards to some of its most active users.
Mining platforms are desirable for the average miner. They allow for consistent pay-outs & predictable rewards, unlike the volatility of market trading.
Finding the right crypto mining set-up for you
The best way to keep your crypto mining profitability up, there is a precise checklist you need to adhere to:
- Purchase an ASIC mining hardware
- Join the right mining pool
- Download the correct software and keep your hash rates & temperature in an optimum zone
- Find a reputable data centre, or find a way to keep your electricity and cooling prices down
- Have the initial funding to make all of these previous steps possible
Conclusion – Is Crypto Mining Profitable?
Honestly, we are on the fence with this one as it really depends on your current circumstance and what asset you are looking to mine.
As research and development continue to push mining equipment speeds and functions beyond comprehension, we can see crypto mining profitability drop and the need for CPU, GPU and any form of lone-mining, become nothing but a waste of time and money when mining the larger cryptocurrencies. However, if you are looking for the next big thing, whilst still wishing to keep your prices low when you
buy cryptocurrency online, then a CPU lone-ranger may well be the way to go.
