Cryptocurrency Mining is Not What It Used To Be…

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Best Binary Broker 2020!
    Perfect for Beginners!
    Free Trading Education! Free Demo Acc!
    Get Your Sign-up Bonus Now:

  • BINOMO
    BINOMO

    Trustful broker.

A Beginner’s Guide to Cryptocoin Mining

Is it worth your time to mine for cryptocoins?

Mining cryptocoins is an arms race that rewards early adopters. Bitcoin, the first decentralized cryptocurrency, released in early 2009. Similar digital currencies have crept into the worldwide market since then, including a spin-off from Bitcoin called Bitcoin Cash.

Which Alt-Coins Should Be Mined?

If you had started mining Bitcoins back in 2009, you could have earned thousands of dollars by now. At the same time, there are plenty of ways you could have lost money, too. Bitcoins are not a good choice for beginning miners who work on a small scale. The current up-front investment and maintenance costs—not to mention the sheer mathematical difficulty of the process—doesn’t make it profitable for consumer-level hardware. Today, Bitcoin mining is reserved for large-scale operations only.

Litecoins, Dogecoins, and Feathercoins, on the other hand, are three Scrypt-based cryptocurrencies that are the best cost-benefit for beginners.

Dogecoins and Feathercoins would yield slightly less profit with the same mining hardware but are becoming more popular daily. Peercoins, too, can also be a reasonably decent return on your investment of time and energy.

As more people join the cryptocoin rush, your choice could get more difficult to mine because more expensive hardware will be required to discover coins. You will be forced to either invest heavily if you want to stay mining that coin, or you will want to take your earnings and switch to an easier cryptocoin. Understanding the top 3 bitcoin mining methods is probably where you need to begin; this article focuses on mining “scrypt” coins.

Is It Worth It to Mine Cryptocoins?

As a hobby venture, cryptocoin mining can generate a small income of perhaps a dollar or two per day. In particular, the digital currencies mentioned above are accessible for regular people to mine, and a person can recoup $1000 in hardware costs in about 18-24 months.

As a second income, cryptocoin mining is not a reliable way to make substantial money for most people. The profit from mining cryptocoins only becomes significant when someone is willing to invest $3000 to $5000 in up-front hardware costs, at which time you could potentially earn $50 per day or more.

Set Reasonable Expectations

If your objective is to earn substantial money as a second income, then you are better off purchasing cryptocoins with cash instead of mining them, and then tucking them away in the hopes that they will jump in value like gold or silver bullion. If your objective is to make a few digital bucks and spend them somehow, then you just might have a slow way to do that with mining.

Smart miners keep electricity costs to under $0.11 per kilowatt-hour; mining with 4 GPU video cards can net you around $8.00 to $10.00 per day (depending upon the cryptocurrency you choose), or around $250-$300 per month.

The two catches are:

  1. The up-front investment in purchasing 4 ASIC processors or 4 AMD Radeon graphic processing units
  2. The market value of cryptocoins

Now, there is a small chance that your chosen digital currency will jump in value alongside Bitcoin at some point. Then, possibly, you could find yourself sitting on thousands of dollars in cryptocoins. The emphasis here is on “small chance,” with small meaning “slightly better than winning the lottery.”

If you do decide to try cryptocoin mining, proceed as a hobby with a small income return. Think of it as “gathering gold dust” instead of collecting actual gold nuggets. And always, always, do your research to avoid a scam currency.

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Best Binary Broker 2020!
    Perfect for Beginners!
    Free Trading Education! Free Demo Acc!
    Get Your Sign-up Bonus Now:

  • BINOMO
    BINOMO

    Trustful broker.

How Cryptocoin Mining Works

The focus of mining is to accomplish three things:

  • Provide bookkeeping services to the coin network. Mining is essentially 24/7 computer accounting called “verifying transactions.”
  • Get paid a small reward for your accounting services by receiving fractions of coins every couple of days.
  • Keep your personal costs down, including electricity and hardware.

The Laundry List: What You Will Need to Mine Cryptocoins

You need eight things to mine Litecoins, Dogecoins, or Feathercoins.

  1. A free private database called a coin wallet. It’s a password-protected container that stores your earnings and keeps a network-wide ledger of transactions.
  2. A free mining software package, like this one from AMD, typically made up of cgminer and stratum.
  3. A membership in an online mining pool, which is a community of miners who combine their computers to increase profitability and income stability.
  4. Membership at an online currency exchange, where you can exchange your virtual coins for conventional cash, and vice versa.
  5. A reliable full-time internetconnection, ideally 2 megabits per second or faster.
  6. A desktop or custom-built computer designed for mining. You may use your current computer to start, but you won’t be able to use the computer while the miner is running. A separate dedicated computer is ideal. Do not use a laptop, gaming console or handheld device to mine. These devices just are not effective enough to generate income.
  7. An ATI graphics processing unit (GPU) or a specialized processing device called a mining ASIC chip. The cost will be anywhere from $90 used to $3000 new for each GPU or ASIC chip. The GPU or ASIC will be the workhorse of providing the accounting services and mining work.
  8. A house fan to blow cool air across your mining computer. Mining generates substantial heat, and cooling the hardware is critical for your success.

You absolutely need a strong appetite of personal curiosity for reading and constant learning, as there are ongoing technology changes and new techniques for optimizing coin mining results. The most successful coin miners spend hours every week studying the best ways to adjust and improve their coin mining performance.

Cryptocurrency Miners Explained: Why You Really Don’t Want This Junk on Your PC

@chrisbhoffman
Updated July 3, 2020, 11:49am EDT

uTorrent recently made headlines for bundling cryptocurrency-mining junkware. Out of all the junkware programs bundled with installers, cryptocurrency-miners like Epic Scale are some of the worst.

Modern malware makes money by using this technique to mine Bitcoin, too. Even if you don’t care about most junkware at all, cryptocurrency-mining software is something you really don’t want on your computer.

Cryptocurrency 101

You’ve probably heard of Bitcoin, the most famous cryptocurrency. It’s a digital currency, and new units of currency are generated by “mining.” This is a computationally intensive task, and it requires a lot of processing power. Essentially, the computer is rewarded for solving difficult math problems. This processing power is used to verify transactions, so all that number-crunching is required for the cryptocurrency to work. That’s an extremely basic explanation — read our in-depth explanation of Bitcoin for more details.

Bitcoin isn’t the only cryptocurrency. The Epic Scale junkware bundled with uTorrent’s installer doesn’t attempt to mine Bitcoin — it attempts to mine Litecoin, which was inspired by and is very similar to Bitcoin.

Mining Actually Costs You Money

Mining programs tap into your computer’s hardware resources and put them to work mining Bitcoin, Litecoin, or another type of cryptocurrency. And no, even if your hardware is used to generate money for them, you don’t get any of it. They get all the money from putting your hardware to work.

Worse yet, your desktop computer or laptop at home just isn’t powerful enough to profitably mine Bitcoin, Litecoin, or other cryptocurrencies. Doing this profitably requires specialized mining rigs with specialized hardware and cheap electricity. So, even if you put your computer to work mining Bitcoin for your own profit, you’d actually lose money. You’d run up your power bill as your computer draws more power, and you’d make back less than it would cost you in power.

In other words, cryptocurrency miners like the Epic Scale crapware or other malware programs that work similarly just run up your electricity bill for a small little bit of profit. The only reason they can profit is because they’re not paying the electricity bill — you are. You pay more in electricity so the junkware or malware authors can make a fraction of that in profit. That’s ridiculous.

We won’t even talk about the impact on the environment from using all of that extra power. But that’s a factor that shouldn’t be ignored.

Heat and Performance Problems

This is a bad deal so far. It would be better if you just paid a company like Epic Scale a few dollars and they avoided running up your electric bill — you’d save money.

But the problem isn’t just a financial one. These types of software kick in when your computer is at a low-power state, putting those idle resources to work. So, instead of using a small amount of power and running cool, your computer will run full-blast when you’re not using it, fans kicking into high gear to dissipate all that heat. If the software isn’t programmed properly — or if it’s just too greedy — it may continue running even while you’re using your computer, slowing tasks down and ensuring your computer is running at full tilt all the time. Too much heat can actually cause damage, especially if your hardware is already flaky or if your computer is packed with dust and isn’t properly ventilated.

Really, we can’t stress it enough — there is no advantage to you in running a program like Epic Scale. You get absolutely nothing from it. Epic Scale gets everything, and you have to deal with all the problems.

So How Is It Justified?

BitTorrent argues Epic Scale is completely justified in abusing your hardware because you agreed to it. If you clicked through the uTorrent installer and accidentally agreed to the Epic Scale offer because it was disgused to look like a legitimate license screen, it’s only your own fault for choosing to use Epic Scale. That’s the argument from BitTorrent, Inc. If you’re not a fan of it, try one of these uTorrent alternatives (or stick with an older version of uTorrent) and send a message. As a bonus, you can avoid all the junk they’ll try to slip onto your computer in the future.

For their part, Epic Scale has a nice-sounding explanation of the issue on their website. They argue that they just want to “benefit high-impact charities” and “advance research science by providing affordable high-performance computation.” They say they “started with cryptocurrency mining as a way to advance the first mission.” In other words, for all their talk, they’re just mining cryptocurrency the same way that malware is doing right now, except in their case you have to agree to it first.

Ultimately, this argument is absurd. People would be better off donating to charities than running up their electricity bills, and a network of underpowered home computers with installer junkware on them isn’t the best way to provide “affordable high-performance computation” for research science. Their statement sounds nice, but their methods are absurd and a bit too similar to how criminals profit off of malware. The only difference is a dense EULA disguised in a software installer and a nice-sounding statement about donating the proceeds to charity. So it comes down to choice, they do give you one, unlike the malware, but it’s not a choice we recommend.

Well, we can say one thing about Epic Scale — they have a better public relations strategy than Superfish does. Bravo.

No, we’re not anti-charity. Do you want to support charities? Then donate directly to them. Five dollars donated directly to a charity every month is better than $5 extra spent on your electricity bill with the charity only getting a fraction of that.

This scheme just doesn’t make sense for anyone except the companies that profit from it.

Really, this stuff is extremely bad. Even if you’re used to your Windows PC being packed with toolbars, pop-ups, and other garbage, even you might think something is wrong if your computer’s fans are going full-blast all the time and it’s acting like a space heater. The Windows software ecosystem is sick, and this is how companies like BitTorrent, Inc. make their money. Yes, almost everyone is doing it — but no, it’s still not acceptable.

The Basics of Cryptocurrency Mining, Explained in Plain English

Here’s everything you need to know about how virtual currencies are “mined.”

The cryptocurrency market was absolutely on fire in 2020, delivering what might be the best year for any asset class on record. After beginning the year with an aggregate market cap of just $17.7 billion, digital currencies combined to finish the year at $613 billion, representing an increase in value of more than 3,300%.

Yet most people don’t understand much about virtual currencies. Sure, more people than ever have probably heard about bitcoin, and they may have heard about some of its closest rivals by market cap, such as Ethereum and Ripple, but they don’t have the faintest idea what purpose they serve or how they really work.

Back in January, we covered some of these basics by examining what cryptocurrencies are, and why they were developed, then proceeded to examine the advantages and disadvantages of the blockchain technology that underpins most digital currencies. Today, we’re going to tackle another common head-scratching issue: cryptocurrency mining.

Image source: Getty Images.

What is cryptocurrency mining?

Cryptocurrency mining is one of the most commonly used methods of validating transactions that have been executed over a blockchain network. Not only does blockchain work to protect transaction data through encryption, as well as store this data in a decentralized manner (i.e., on hard drives and servers all over the world) so as to keep a single entity from gaining control of a network, but also the primary goal is to ensure that the same crypto token isn’t spent twice. In effect, “mining” is one means of making sure that cryptocurrency transactions are accurate and true, such that they can never be compromised in the future.

How cryptocurrency mining works

Cryptocurrency mining itself refers to a type of validation model known as “proof-of-work” (PoW). There are two common validation types, and we’ll look at the other, known as proof-of-stake, in a moment.

In the PoW model — which bitcoin, Ethereum, Bitcoin Cash, and Litecoin use, to name a few — individuals, groups, or businesses compete with one another with high-powered computers to be the first to solve complex mathematical equations that are essentially part of the encryption mechanism. These equations correspond to a group of transactions, which is known as a block. The first individual, group, or business that solves these transactions, and in the process validates the accuracy of these transactions within a block, receives a “block reward.” A block reward is paid out as digital tokens of the currency that’s being validated.

As an example, the current block reward for bitcoin is 12.5 tokens. That means whoever is the first to correctly solve equations for a block is paid 12.5 tokens. With bitcoin near $9,500 per coin, that works out to a nearly $119,000 haul.

Image source: Getty Images.

Are there disadvantages to the PoW model?

There are two major concerns attached to the PoW model. First, it’s an extremely electricity-intensive practice. To mine virtual currencies, massive mining centers with graphics processing units and/or ASIC (application-specific integrated circuit) chips are set up to handle this validation and processing. The electricity costs, depending on where an operation is located, can be enormous. It could also, in theory, be a drain on local or national electric grids, depending on how large digital networks and mining farms become.

The other issue is that the PoW model has a security vulnerability, at least for smaller digital currencies. Any individual or group that can gain control of 51% of a networks computing power could essentially hold that network and digital currency hostage. Networks the size of bitcoin, Ethereum, and Litecoin have next to nothing to worry about. However, newly issued coins with fewer participants could be susceptible.

Is all PoW mining the same?

Though cryptocurrency mining might often be lumped in as one big free-for-all, there are differences in the equipment being used to validate transactions. For bitcoin, miners need to use highly specialized and expensive ASIC chips because of the difficulty in validating bitcoin transactions. Meanwhile, most other virtual currencies allow miners to use some variation of graphics processing units from the likes of NVIDIA or Advanced Micro Devices to proof transactions. However, the difficulty in this mining can still vary from one cryptocurrency to the next.

Image source: Getty Images.

What’s the alternative?

Even though there are technically a number of proofing alternatives, the biggest competitor to the PoW model is the proof-of-stake (PoS) model. With PoS, there are no high-powered computers and mining farms sucking up electricity to validate transactions. Instead, stakeholders of a digital currency receive the randomized right to validate transactions. In plainer terms, the more of a cryptocurrency that you own, the more likely it is that you’ll be chosen to validate a block of transactions. Those who are chosen don’t receive a “block reward” when complete. Instead, they receive the aggregate fees from the transactions that were proofed.

The obvious advantage of this platform is that it’s considerably lower cost. There’s also no worry that hackers will gain control of 51% of a network’s computing power with the PoS model. For hackers to gain control of a PoS-backed network, they’d need to control 51% of all outstanding virtual coins, which could get quite expensive.

Then again, it’s not perfect. Arguably the biggest issue with the PoS model is that major stakeholders can have a much larger say in the future path of a digital network. Whereas PoW networks are massive and incorporate the opinions of a lot of people, PoS networks lose some of the decentralization that makes cryptocurrencies special, thusly allowing larger players to shape future technical and economic pathways for a cryptocurrency.

It’s tough to say which method developers will prefer in the years to come, but at least when someone talks about “cryptocurrency mining” in the future, you’ll know exactly what they mean.

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Best Binary Broker 2020!
    Perfect for Beginners!
    Free Trading Education! Free Demo Acc!
    Get Your Sign-up Bonus Now:

  • BINOMO
    BINOMO

    Trustful broker.

Binary Options Trading School
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: