Several years ago, people found out about a new way of earning money - by mining bitcoins. For most of the population of planet Earth this cryptocurrency meant nothing, mostly because people had no clue how it can be used and what you can buy with it. But trading industry immediately understood its value, that’s why the cost of bitcoins
was so high at the beginning.
In order to earn this currency, you have to mine it. There are different types of digital currency, each has its cost. To achieve the currency, you have to obtain specific hardware and software which will gain it. Basically, it means that a user buys certain machine which can mine coins without much supervision.
It seems easy enough, but perhaps there are certain pitfalls or important details that have to be considered by a user before buying the specific equipment or starting a career of cryptominer. In this article we will tell how does it work, is it difficult to start mining, etc.
Pick Your Mining Company
When the creation of cryptocurrency was announced, during first several month people could mine it using simple machines, such as PC’s. Now there are different types of digital coins and it is either difficult to use even the most powerful computer in order to gain coins, or it’s simply impossible – you need specific hardware.
If you don’t yet want to buy your own hardware and want to begin with smaller investments, you can try cloud mining. It means that a person rents a machine and other people mine bitcoin. If to summarize, people get paid for investing their money into gaining currency.
But be very careful, there is always a possibility of encountering a scam. It’s better to read reviews about a certain company before investing. Pay attention to the quantity of reviews, if there are only several positive reviews, it might be a scam. Find a reliable source of information or ask experienced miners.
Choose A Mining Package
When you find a suitable provider and register on their website, the next step is to pick a package. A package means renting hashing power – the power of a hardware which is used to solve certain hashing algorithms. Using simple words – more power, more profit.
Choosing a pack depends only on your financial situation. If you can afford a better pack, you’ll receive more money. But it’s not the only criterion which should be taken into consideration when building your cryptominer career.
It’s essential to analyze the current market situation. Cost of bitcoin may change, it might lose its popularity, etc. You should also consider the difficulty of mining currency. The best situation is when bitcoins are easily mined and are sold at a high cost. But we don’t live in a perfect world, so usually the most valuable currencies are difficult to mine, and rent of the hardware that is mining these coins is at a high cost.
So, calculate your options and analyze current market. You should find out how long it takes to mine certain bitcoin. If a coin has low cost and it’s difficult to mine it, then probably you should choose another option to receive better profit.
Pick a mining pool
What is a pool in this context? It’s when a group of cryptominers band together to reduce coin’s volatility. As you probably know, volatility is liability to change, especially to the worst. It means that the cost of currency can drop.
Here’s a simple example of how mining pool works. Imaging that you have 1 lottery ticket and there’s only 1000 of them overall. What is the possibility to win in this case? Yes, 1:1000, the chances are low. Buy a hundred of them, and chances will be 1:10, which is good.
But if you can’t afford a hundred of tickets, contact other people, so together you buy all 1000 tickets. Whenever someone wins, you share the profit. Mining pool is operating similarly. Of course, everyone gains less profit, but it is stable and much more frequent. It’s good, since you’ll reduce the time to get revenue.
Be careful when choosing a pool, because there is always a possibility to reach an unreliable society. Again, ask experienced miners for advice.
Select A Wallet
After a while, you’ll be receiving revenue. The profit depends on the package, market situation, etc. But you’ll definitely need a secure e-wallet. When a user has his own wallet, he can securely withdraw his revenue from account to e-wallet.
Then it’s up to a user what he wants to do with his bitcoins. He can buy certain services, invest, trade, or simply sell. So, to successfully withdraw your profit from an account, you have to pick a secure wallet.
What if I want to mine with my own hardware?
If you want to make money solo, without contacting any company, you have to be aware of certain things, for instance, cost for electricity. The more powerful a hardware is, the more electricity it "eats". You also might have to set up special software, or to rig the machine with other tools – it also costs money. But at the same time, you will gain a higher profit.
Choose the ASIC-miner. The best option is if this miner is capable to mine different currencies. You have to analyze the market and choose the bitcoin which costs the most and has low volatility. You can consult experienced colleagues; their opinion can make a huge difference.