How is virtual currency created? How is the price set? How can you invest in and buy crypto currency? What about mining virtual currency?
What is mining ?
A crypto-currency comes in the form of a token, created by individuals for individuals. At the same time, cryptos are common currencies for financial investments.
Mining cryptocurrency or creating virtual currency
To put it simply, mining crypto-currency is like creating new virtual currency tokens. This is an activity that was previously intended for professionals. And for good reason, as mining impacts the price of virtual currencies.
History of cryptocurrency mining
For the record, cryptocurrency mining started 13 years ago, in 2009, when people started talking about crypto-currency blockchain. Since then, the techniques for creating and finding new tokens have been revolutionized. Nowadays, we talk about proof-of-result or proof-of-action mining, for example. Recently, private individuals started jumping into the fray.
Cryptocurrency mining: how does it work ?
Cryptocurrency mining involves solving mathematical formulas that are located at the top of a crypto-currency blockchain and allow you to obtain new tokens. The puzzles in question are attached to a specific crypto community, such as Bitcoin, Ethereum, etc.
Who mines crypto-currency ?
In the majority of cases, miners use specific, relatively bulky hardware. A few platforms are currently offering individuals the opportunity to mine cryptocurrency without the hassle and with just a few clicks.
How do you do cryptocurrency mining ?
As an example, we will take Bitcoin mining. To create cryptocurrencies, you need miners and mining experts. Here's how it works step by step.
Crypto-currency miners: who are they ?
Crypto-currency miners, these days, are particularly diverse. On the one hand, there are professionals who are part of a miners' platform or a mining company. Their sole mission is to create new tokens in order to boost the market.
On the other hand, there are ordinary individuals who have the opportunity to earn money by mining virtual currency tokens.
Solving head-of-string mathematical formulas
The miners' role is to solve the mathematical formulas at the top of the chain. Obviously, you need to have some knowledge of the subject to be able to generate new tokens.
As mentioned above, formulas are attached to a very specific blockchain for a cryptocurrency.
Provide proof of your work
In today's market, the most common technique is to provide proof of your labor, i.e the computer hardware that will provide the equations to be solved and also solve the puzzles.
Get new bitcoin tokens that have not been used yet
The goal is simple : to obtain new, unused bitcoin tokens. Professional miners put them back into the market, while individuals invest and accumulate the tokens to make more income.
Is it possible to mine other crypto-currencies than bitcoin ?
Yes it is. Bitcoin is not the only crypto-currency you can mine: there’s also Ethereum for example, or Litecoin. These are among the first generations of crypto-currencies available on the market.
What you need to get started with crypto currency mining
To get into classic crypto currency mining, you will need a powerful computer and server. You also need a motherboard that will be able to solve and understand the mathematical equations quickly to be the first to validate the block head.
The puzzles are not only mathematical, but also cryptographic. You will also need a computer with a good graphics card to mine cryptocurrency. There are devices that are specially designed for this kind of performance, including Asics and RIGs.
The server is the most cumbersome aspect of cryptocurrency mining hardware. Having a single server is not enough. To ensure success, you need to equip yourself professionally and make sure that the hosting providers you use offer sufficient performance.
Is mining profitable ?
Through mining, it is possible to create new tokens and thus boost the market of a cryptocurrency. It is a rapidly-developing sector that can enable you to earn money.
Cryptocurrency mining is becoming more and more professional
Since 2009, cryptocurrency mining has been primarily a professional activity. And for good reason! Not only does it require space for hardware, but also knowledge of mathematics. If more and more mining companies are emerging on the market, it is because, despite the competition, this field can be profitable.
Earning new tokens instead of buying crypto currencies
Earning new chips instead of buying the ones already on the market can make financial sense, as transaction fees will be minimal. The prices are the same for mined crypto-currency tokens as for purchased ones.
Mining crypto currencies to boost the market
Cryptocurrency mining benefits everyone, including everyday investors. By injecting new tokens, miners boost the market. They participate in the growth of the community. This impacts the price of Bitcoin or the mined virtual currency.
An easier way : buying tokens
There is still one drawback to consider: mining can take time and is more complex than buying tokens.
The easiest way to get into virtual currency trading is to buy tokens. What are the best platforms for trading crypto-currencies? Find the answer here.
What is cloud mining ?
We've made it clear that cryptocurrency mining has become increasingly professionalized over recent years. But what if we told you that thanks to cloud mining, it’s increasingly in the reach of ordinary individuals? What exactly does it consist of?
Cloud mining: crypto currency mining for individuals
Tempted by the idea of mining crypto currency without having to solve complex mathematical equations? We recommend cloud mining, a mining technique for individuals that is much simpler and just as profitable.
The benefits of cloud mining
Simplicity is certainly among the main advantages of cloud mining. You can mine without having to install servers or cumbersome hardware at home. A simple desktop computer is enough, while you are also safe from hardware failures.
The profitability is the same, but much faster with cloud mining. To search for the tokens, you only need a few clicks. There are plenty of cloud mining platforms that save you from building a GIR system.
Choosing your cloud mining platform
It’s important to choose your cloud mining platform carefully. The success of your operation depends on it. For example, you can compare the fees that you will be charged for the different steps you have to take. On some of them, the verification of your income can be done without fees.
You may also want to consider the frequency of your income release. For those who are not in a hurry to get their profits, an annual payment is ideal. The money will have time to grow and make for a larger lump sum. But some sites may offer more frequent releases if you like to stay in control.
Also be very careful when choosing the virtual mining site. Details such as the user-friendliness of the platform and ease of access are important.
Should I join a mining pool ?
To mine cryptocurrency, you can join a mining group or mining pool.
What’s a mining pool ?
The term "mining pool" means "miner's club". A mining pool is a group of several miners. The miners pool their mining power to find blocks quickly. They then share their rewards according to their respective power.
Miners can connect to the pool via a website and mining information. Calculations, also known as “jobs”, are sent to the miner. After the calculations have been solved, the miner must provide results (shares).
Is it a good idea to join a mining pool ?
It may be a good idea to join a group of miners. As mentioned above, even as a non-professional, it will increase your chances of getting new tokens.
This is even more important these days as blockchains are becoming more demanding when it comes to solving mathematical equations. To validate actions, proof is needed. A community of miners saves time and gets more tokens quickly and easily.