In the previous articles, we discussed what cryptocurrencies are and which ones are topping the list right now. While understanding cryptocurrencies and the potentially revolutionary changes they can bring about was exciting, you may be wondering about one crucial aspect. Where and how are cryptocurrencies mined if the regular currency is minted at a factory? Read on to know more about what crypto mining is all about.
What is crypto mining?
Simply put, mining is the process by which networks of specialised computers—we are talking fancy, superior, high-energy consuming beasts—generate and release new cryptocurrencies and verify transactions on the blockchain. The many computers required for mining work use decentralised networks from across the globe to verify the open ledger (i.e., the blockchain) transactions. Miners compete to prove their computational work in exchange for a block reward. In this process, needless to say, computers apply immense processing power. In exchange for the energy put in by the computers, they (the computers, and thus the miners) get a cryptocurrency. It is a win-win situation for all parties in this ecosystem: the miners maintain the security and, thus, the proof of work (PoW) of the blockchain, and in return, the miners receive crypto coins as rewards. In this way, this cycle of mining and transacting continues.
How does crypto mining work?
As mentioned before, the security of a blockchain lies in the proof of work (PoW), which involves the miners performing many complex calculations. Of course, mining is a costly process due to the hefty computational power required to undertake these calculations. In addition, the computers, beastly as they are, require a lot of upkeep. Keeping them cool and running, for example, is an energy-heavy task. However, miners continue to do so voluntarily because the reward is a valuable, sought-after cryptocurrency.
Apart from being lucrative, mining can also give one an adrenaline rush. All the computers on a network compete to guess the ‘hash’, a 64-digit hexadecimal number. Additionally, mining happens at breakneck speeds, as only the fastest computer can dole out the maximum number of guesses, improving the chances of winning. Upon winning, the miner has the honour of adding a new block to the blockchain, comprising all the verified transactions—much like updating a ledger. Moreover, besides just winning cryptocurrencies, miners also get the ownership of the block.
While it may appear as just a profitable activity, mining primarily governs and maintains the continued security of blockchain. It, therefore, enables decentralised, democratic, and transparent money exchanges and transactions.
Can everyone mine?
By now, we bet you are curious enough about crypto mining to want to try it out. But, will you be able to do it? Well, we keep referring to Econ 101 for a reason. Increased demand always makes things more valuable. At its inception, cryptocurrency mining was not yet a mainstream commodity. Until about a decade ago, crypto mining was a niche interest among people who discovered this new, exciting way to conduct finances and earn money in the process. However, the crypto boom of recent years has turned mining into a highly competitive field, demanding computational capacities that far exceed those of the average person.
By October 2019, crypto mining was reported to require 12 trillion times more computing power to mine one Bitcoin than it did when the whole gig first began in 2009. If this isn’t indicative of how exclusive it is today, we don’t know what is! If you are a crypto hobbyist and are willing to try it out, you still can. Rest assured, there are no regulations against amateur mining. However, it is unlikely to be a profitable endeavour: you will invariably spend more on your computer maintenance than you will earn. Due to this, most of the heavy lifting in mining is currently done by specialised companies and corporations who can afford the vast resources needed to support the fancy computational infrastructure.
Best mining software
Say you manage to figure out the hardware, after all. The only thing standing in your way of mining those coins is the right software. If amateur cryptocurrency mining is your heart’s intent, that is precisely what you shall get. Here are some apps and software that will make your life easier by offering the best bang for your buck!
One of the oldest mining software out there, CGminer offers simplicity and sophistication simultaneously. It is also an open-source software, making it the preferred choice for many advanced miners. By allowing cross-platform and cross-hardware compatibility, that is by supporting operating systems such as Windows, Linux, and Mac, and by also allowing for a variety of mining hardware like ASICs, FPGAs, GPUs, etc., CGMiner has won many hearts. The only thing that it could perhaps improve on is the lack of a graphical user interface which makes it too convoluted for a novice to follow.
Considered the best software for customisation, BFGMiner can mine multiple cryptocurrencies simultaneously. It also runs on Mac, Windows, and Linux, making it highly accessible. Moreover, it is free to download and use. However, this software has also been deemed slightly too complex for beginners.
Often considered the best of all worlds, this software has automated hardware detection and cross-platform compatibility. Its graphical user interface makes it a favourite among those just dipping their toes into the mining world. That said, many advanced users may be disappointed by the fewer customisation options available.
4) Awesome Miner
Remarkably, you can use a single dashboard to manage multiple mining rigs in this software. In addition, it has advanced features that aid in maximising profits and minimising downtime. It can be downloaded free of charge and is compatible with almost all browsers and computers.
This software is extremely efficient. Also aiming to make the process of mining cryptocurrencies more equitable, Minedollar does not require much initial investment. A special feature is that it is accessible online and available for use on mobiles.
While this list is by no means comprehensive, these software can be a good starting point to cure that mining itch. We wish you the best as you embark on your crypto journey. After all, what’s ‘mine’ is yours!