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Cryptocoin Mining

Mining Cryptocurrencies for Profit

If you are a risk-averse investor, and want a more safe way to make profits constantly, you may want to look into cryptocurrency mining (as opposed to playing the market). Mining is basically asking your computer to solve incredibly complex equations, whose result is a code which constitutes a coin. This is only possible with currencies which use a Proof of Work system (such as Bitcoin). It takes a deal of investment as well, though, as the computers tasked with solving these equations must be incredibly powerful. Thus, you have to invest in a range of CPUs and GPUs, and also in the electricity expended. This is a good way to ensure long-term passive income, if done correctly.

More on Bitcoin mining here, be sure to do your research thoroughly!

There are, however, more suitable and less suitable coins for beginners, and you should keep that in mind if you want to go down this road. Litecoins, are currently and typically most beneficial for beginners, as they have a good cost to benefit ratio (as of late 2017). Litecoins are based on Scrypt, which is an algorithm that enables the verification of coins. If you take into account the current value of Litecoins, for example, you may earn from 50 cents to 10 dollars per day by using mining hardware which can be found in any home.

Know Your Altcoins First!

Bytecoins, Dogecoins and Feathercoins are currently less profitable than Litecoins and other mid level coins, but they are still increasing in popularity day by day. They remain as cryptocurrencies that you should keep a close eye on at all times. There is actually a long list of promising cryptocoins that any miner or investor should keep their eyes on, for various reasons that are beyond the scope of this writing. Some names that come to mind are:  Ethereum, Dash, Monero, and NEO (in the more expensive range) – and for the (currently less expensive) altcoins there are: Ripple, IOTA, EOS, and Steem.

However, keep in mind that the whole cryptocurrency landscape changes very often, and most violently. Every current cryptocoin in creation is going through volatility that no stock or money market has ever seen the likes of! You really need to research any cryptocurrency in detail, if you are interested in investing into them or mining them. Careful market research and hardware/operating cost calculations are essential to your success. It is very easy to fail and lose money on mining, if your math and market considerations are flawed!


Is it worth it?

If you are looking into making an investment into cryptocurrency, naturally you want to know whether it will be worth your while. If you are just doing it as a hobby, you are looking at profits of around a dollar or two per day. As previously mentioned, Litecoins, Dogecoins and the other mid to low level coins are particularly well suited for hobbyists, and you can recoup an investment in hardware of around 1000 dollars in about 18-24 months (for most of them).

However, cryptocurrency mining as a source of income is in no way a reliable way to make money in the long term. At least not without a lot of up-front work in calculations and a lot of smart investing. In fact, the profits that can be reaped from investing in cryptocurrency are only significant when you are willing and able to invest at least $3000 to $5000 in hardware at the very beginning, which would enable you to make some profits every day. Keep in mind that you need to do a lot of research and calculations to know which currency to mine, and how much your electricity and hardware costs are eating into any profit.

Also keep in mind, that due to the nature of the cryptocurrency market, there is always the chance that the value of these altcoin currencies may shoot up significantly in the future, to match the value of Bitcoin for example. That would happen if there is an increased demand for and confidence in these coins. If that does happen, you could suddenly find that you have mined many thousands of dollars’ worth of cryptocurrency. However, the chance of this ever happening is slim at best, and so it is not advisable to sink all your money into an uncertain venture such as this.

Should you wish to dip your toe into mining cryptocurrencies, start by doing it as a hobby on the side, and do not expect great returns. After a while, you may find that you’ve actually amassed a tidy sum that you can spend on something you like. Just don’t expect to become rich overnight.


Best Advice for Mining Profits

We have already established that mining yourself is a risky and daunting task, one that requires a lot of calculation, investment, and hardware knowledge at the very least. Turning a profit is not impossible, but it is unlikely unless you really work hard and set up something that is reliable and scalable. There are better ways to handle mining, such as by investing into a cloud mining service like Genesis Mining. However, no matter the path that you decide to take, you still need to do your math calculations and factor in all of the variables associated with mining. This point cannot be stressed enough! You will need some above average math skills, or you will have to rely on a calculator, to figure out the costs and profitability of your mining venture. We use and recommend using a free online calculator like the one at CryptoCompare, it is the best we have found so far, and works for some of the major coins.

 

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How does mining work?

What follows will be a brief guide into how exactly cryptocurrency mining works. This guide is aimed at people who want to keep their investment in hardware somewhere around a thousand dollars. It will focus on mining Scrypt-based coins, Litecoins, Dogecoins and Feathercoins, etc.

There are three things you are looking to accomplish when mining coins. Firstly, mining entails providing a sort of bookkeeping service for the entire coin network. That means that mining consists of round the clock computer accounting termed ‘verifying transactions’. Then, once this is done, you get paid a small fee by getting a few fractions of a coin every few days. To get the most out of your investment, keep your electricity costs as low as you can.

 

[ytp_video source=”NRGohx-H-o0″][/vc_column_text][vc_row_inner][vc_column_inner][vc_custom_heading text=”What you will need to mine cryptocurrencies” use_theme_fonts=”yes”][vc_column_text]There are approximately ten things you will need to mine most cryptocoins.

  1. You will need a coin wallet, which is essentially a free private database for your coins. It is password protected and it is used to store the coins that you earned, in addition to keeping a ledger of transactions.
  2. In order to actually mine anything, you will need an algorithm that is designed to do it for you. You will want to download some of the free ones, for instance a package consisting of cgminer and stratum.
  3. You will also need to become a member of one of the online mining pools, which is the name for a community of cryptocurrency miners who make networks out of their computers in order to increase profits and the stability of the income they stand to make. Minergate being one of the best and easiest to work with.
  4. On top of that, you will need to become a member of an online currency exchange. These are designed so as to allow users to exchange their currencies for conventional currency, and vice versa.
  5. It is also required that you have a decent internet connection for this to work, at least 2 mbps or faster if possible.
  6. Due to the complexity of the calculations involved, your computer system will get very hot while performing these calculations. That is why you should put it in a cool place, such as a basement, and invest in some high-quality cooling equipment for reliability.
  7. Obviously, for any of this to work, you need an actual computer system. This system must be well designed and optimized with mining in mind, as normal computers are just not powerful enough for the calculations involved.
    You can start off on your regular computer, but you won’t be able to use it at all while mining is taking place. Thus, you should invest in a separate computer which is only used for mining. However, laptops, gaming consoles and hand-held devices are a waste of time if you want to mine cryptocurrencies, as they are simply not powerful enough.
  8. Also recommended is a powerful and current graphics processing unit (GPU), or a special device made specifically for mining, called an ASIC chip. This will set you back anywhere from $90 to $3000 for a new GPU or ASIC chip. This is the heart of the operation, as these units do most of the calculations involved in mining.
  9. As previously mentioned, you should invest in a good cooling system for your mining computer. Alternatively, you could just buy a small air conditioner, or even one of those cheap room fans and aim it at your mining setup for a good effect. (keep in mind this raises electricity cost!)
  10. Finally, you need to be studious and patient. You have to be willing to invest time and effort into reading up on the latest developments and constantly learning more information. The very nature of the system means that changes are made daily, and new technology is introduced on a similar basis. You need to make sure you stay on top of all these developments if you want to get the most out of your investment in mining cryptocurrencies.

Closing Thoughts

With all of these things in mind, if you are still looking to get into cryptocurrency mining, we congratulate you on your ambitious and strong-willed nature! It is indeed a laborious task to begin setting up a proper mining operation, but it is something that can be life changing. If not for the money you can make, it can change your life by advancing your knowledge of computers, math, the economy, investing, and temper your character in the process. We are sure that if you take the advice given here into consideration, you study deeper into mining, and you calculate properly, you will find mining to be a worthwhile endeavor. Good luck, and have fun!