Did you when that when Bitcoin first began in 2009, miners were rewarded 50 bitcoin per block? Approximately every 4 years (210,000 blocks), the block reward halves. The block reward continues to halve until it reaches zero by the year 2140 (approximately).
Currently, Bitcoin’s block reward sits at 6.25 bitcoin per block and will reduce down to 3.125 at the next halving.
Have you ever thought of mining cryptocurrency yourself? While it may have some initial costs, it is a great way to make passive income and be a part of the crypto community. Keep reading to learn how to get started.
What Is Cryptocurrency Mining?
Mining cryptocurrency is when you validate transactions and mint new coins using a Proof-of-Work (PoW) consensus mechanism. This was the first way that enabled cryptocurrencies to be truly decentralized.
The Proof-of-Work consensus mechanism was introduced with Bitcoin. Miners would confirm transactions with computers that solved complicated mathematical equations. The proof of work is when these computers would provide the correct answer.
The name of the game is to be the first miner to confirm a block of a cryptocurrency’s transactions. When a block is confirmed, it gets added to that particular cryptocurrency’s blockchain. The miner is rewarded (block reward) with a set amount of that cryptocurrency/
Types of Mining
There are a few ways to start mining cryptocurrency. From solo to pool mining, some will require an expensive cryptocurrency mining rig while others adopt a rented infrastructure.
ASIC Mining
An ASIC (application-specific integrated circuit) cryptocurrency mining rig will cost you a pretty satoshi. These are designed to mine specific cryptocurrencies and offer a higher hash rate which means more mining power.
Head to www.quotecolo.com to pick one up today.
GPU Mining
Mining cryptocurrency with one or more GPUs (graphics processing units/graphics cards) will cost you a bit more than CPU mining. These will offer a decent amount of mining power but will cost you a substantial amount of coin upfront too.
CPU Mining
Using your CPU is one of the inexpensive ways to start mining cryptocurrency. Unfortunately, you won’t receive much profit due to their minimal mining power.
Solo Mining
This is the independent approach to mining. While it may be a costly affair to set up and start mining cryptocurrency, you will reap all the benefits of the rewards.
Pool Mining
Mining pools are where a group of miners combine their efforts and share the block rewards. For the pool fee, miners will pay a small percentage of the block rewards.
Cloud Mining
Cloud mining is where you’ll pay for a company to do the mining for you with their own mining devices. In most instances, going through a cloud mining company will favor the company and not you, the miner.
Choose a Cryptocurrency
Before you start mining cryptocurrency, be sure to find cryptocurrencies that use the PoW consensus mechanism. Do your research on what will be best to start with and be the most profitable.
A few to start with are Kadena, Ergo, and Dogecoin.
Get a Wallet
To receive your rewards from mining cryptocurrency, you’ll need to get a wallet. You can either download a hot wallet (more convenient, less secure) or a cold wallet (more private, more secure, more expensive).
Make Your Mark With Mining Cryptocurrency
Even in 2022, mining cryptocurrency is still a profitable and worthwhile endeavor. Cryptocurrency mining for beginners needn’t be difficult. As you acquire more knowledge, you can set up multiple mining rigs.
Once you have your desired setup, there is always something new to unpack. We encourage you to continue to read our blog on cryptocurrency and the technology behind it.
