After the year they had in 2017, you’ve certainly heard of cryptocurrencies like bitcoin. These digital currencies absolutely skyrocketed in value in 2017. But what exactly are they and how do they work? Understanding these cryptocurrencies and how they’re ‘mined’ can easily make your brain hurt. Let’s see if we can demystify the process.
MiningCryptocurrencies were originally developed behind the ideal of a global currency, one that would be recognized across national borders and industries. What began as a niche interest exploded into a major investment opportunity over the last few years—but there are more ways to access bitcoin than to simply buy shares of it.
That’s where cryptomining comes in. Cryptocurrencies are designed as part of a blockchain, which is essentially a series of algorithms and encryptions designed to keep them secure and ensure that no transaction is used twice. It’s the digital equivalent of combatting counterfeiting and theft. The process of verifying the legitimacy of these digital transactions involves using powerful computers to solve extremely complex equations.
You with us so far? We’re almost to the part where you can make money.
Each cryptocurrency rewards anyone who solves these equations and verifies transactions by giving them a certain share of that given currency.
What’s required to verify these transactions?
Lots and lots of computing power and specialized equipment, which adds up to lots and lots of electricity. Bitcoin mining farms require a great deal of electric power to operate, and energy costs can add up. But when the potential earnings are so high, it can be worth the cost.
Who can make money?
Cryptomining is a perfect opportunity if you’re into the latest tech and building or modifying computers, plus niche interests like researching parts and which types of coins are the best to mine.
Jumping into mining bitcoin might not be your best bet if you have no prior experience. The equipment can cost thousands or tens of thousands of dollars, and often cannot be adapted to any changes in the encryption types should bitcoin decide to switch things up.
We recommend looking into mining some of the newer cryptocurrencies. Early adoption is often the key to success in cryptomining, as entry is cheaper.
What will you need?
To mine bitcoin, you’ll need an ASIC mining rig. These are available from both retailers and used gear marketplaces online. These generally cost in the range of $1K to $3K. Rigs designed for smaller cryptocurrencies can be less expensive. You’ll also need access to dependable electricity, preferable at a cheap rate to avoid bills from racking up.
How to get started
Lifewire offers an excellent in-depth guide to getting started with cryptomining. They offer a deeper look at how it works, the equipment you’ll need to get started, and more info. Get started, get informed, and get mining.