What is Cryptocurrency Mining? Is Bitcoin Mining Profitable?

1 What is Crypto Mining?

Mining is the process of extraction of precious materials and minerals from the earth surface. On the other hand, Cryptocurrency mining is a process of verifying the transactions on the digital ledger (Blockchain).

Every time a transactions is made on the proof-of-work blockchain, the transactions is sent to all the miners over the network. The miners need to solve a unique mathematical problem every time and validates the transactions.

 The reward that we got for supporting the network of Cryptocurrency to solve the problems is known as mining of Cryptocurrency.

2 TYPES OF MINING

Mainly two type of the mining options are available at the present time.

  • Cloud mining
  • Hardware mining

3 Cloud Mining

In cloud mining, people run their websites and promise to give return for your investment at their website, they claim us that they use the investment for buying mining hardware etc. and return reward to their investors, But in actuality they run PONZI SCHEME to steal money from Noobs/newbies who don’t know about such scam. Many websites claim that they can give up to 2 percent daily on cloud mining. The more return they give, fast they exit.

4 Hardware Mining

In hardware mining, we need high powered computers that are connected to the blockchain and do mathematical calculations to verify the transactions. Hardware mining is a genuine way of mining cryptocurrency.

The more hardware power a miner has the more probability that he can solve the next block problem. Anyone can solve the block problem even with small hardware but the probability is very low. You can compare it with a lucky draw, more number of lottery tickets you have the more probability of winning.

5 Is Cryptocurrency Mining Profitable?

Mining in the present time is not profitable. Especially the mining of Bitcoin is not profitable because of mainly two reasons.

The first reason is the high cost of electricity, day by day the cost of electricity is increasing, so it remains not easy for people to spend enough amount of electricity for mining.

The second reason is the difficulty, At the average of every 10 minutes, the difficulty to solve the problem in blockchain increases, so we need high-cost GPU system to solve the difficulty to get earnings.

Overall it is not easy to get the profit under normal fluctuations in price and increasing difficulty. There are some coins which are quite profitable under some circumstances. You should research about the coins before buying the mining hardware.

6 Requirements For Cryptocurrency Mining?

Requirements For Cryptocurrency Mining?
Source: BTC.com

You can start mining on your own but this is not profitable or it takes years to give you some profits. Your probability of winning the mining race is very low because you are competing with the whole world miners.

So how can you make mining profitable?

You can join mining pools. A mining pool is a way where miner put together their resources to increase the probability of finding the solution. Every miner awarded a “share” according to the contribution power. That means you get a reward every time the pool finds a solution. The reward is based on how much computational power you shared with the pool.

The largest Bitcoin mining pool is now ANT pool that covers 15 percent of the total coputational power over the network. The second largest mining pool is BTC.com that has 14.3 percent of total power of the network.

The reward per block for Bitcoin is 12.5 BTC, that means every time someone finds a solution to a new block is rewarded with 12.5 BTC. This is equivalent to $63,350 (taking price per Bitcoin is $5100). This means that someone can earn 12.5 BTC every 10 minutes (average block time).

Many readers have the curiosity to know that is it necessary to hold or buy Bitcoin to start mining?

The Answer to this question is NO. This is not necessary to buy or hold any amount of Bitcoin to start mining. All you need is the mining hardware that is capable of doing millions of calculations per second and a good Internet connection. The process is very simple just plugin some wires and you are good to go.

7 How To Mine Bitcoin?

 To mine Bitcoin, we need a better internet connection and better computer with integrated mining hardware. The mining hardware can be bought directly from the market or you can make a mining rig according to your needs.

To buy latest mining hardware, you can place an order at official website www.bitmain.com, usually they deliver mining hardware in 2-8 month ( depends upon the location of the buyer).

There are many different algorithms for cryptocurrency mining. Every Coin needs different hardware with different configurations. We will post an article on different algorithms of mining soon.

8 Should You Go With Cryptocurrency Mining?

Our suggestion is NO, Because mining under the normal conditions is not profitable.

But if anyone want to mine that coin which doesn’t need high-performance hardware system then surely you should try, but always take care that the coin for which we are going to spend our money and time is PROFITABLE or not ( calculation before starting to mine) and also analysis is must, that whether the coin has future use or not because after mine of the coin, if the market get crash then your miner get into big loss.

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