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Cryptocurrency Mining in 2021: Is It Worth It?

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Exploring the world of crypto can be an exciting journey. Aside from the thrill that price and value changes bring, there is also one noticeable aspect of the ecosystem that many users come across.

It’s called mining – an activity that embodies the full potential of the crypto industry. 

In this article, you will get to know the most popular and efficient methods for mining cryptocurrencies and find the one that best suits your individual needs.

How Are New Cryptocurrencies Created?

One of the questions people often ask themselves upon beginning their crypto adventure is: how exactly are new cryptocurrencies created?

The answer almost always inevitably involves mining. Mining is the process of verifying transactions by solving cryptographic puzzles with computational power – this is the fundamental and original concept of the cryptocurrency industry.

Mining is necessary to maintain and secure the blockchain digital ledger and generate new coins with block rewards. These rewards encourage miners to meticulously verify transactions before updating the blockchain and promote competition among miners, increasing their participation in the network. 

When dealing with mathematical problems, miners use special devices propelled by enormous computing power, also known as hash power. The speed of the machines influences how effective they are in finding solutions. Not surprisingly, hash power is a sought-after asset these days.

In theory, mining doesn’t seem to be overly complex, but in reality, it requires the proper knowledge and tools to turn the effort into results.

CPU Mining

In the beginning, it was possible to mine cryptocurrencies with a personal computer – this is how Satoshi Nakamoto first mined Bitcoin (BTC).

From a technical point of view, CPU mining utilizes processors to mine cryptocurrencies. As the years have gone by, mining has rapidly evolved in search of efficient and profitable solutions. 

Although virtually anybody with a desktop computer can do it, the CPU mining method is fastly becoming obsolete as more efficient mining solutions continue their successful implementation.

GPU Mining 

Today, a popular method for mining cryptocurrencies involves hardware with Graphics Processing Unit cards or GPUs for short – stacks of multiple GPU cards are connected, forming what is known as a rig. These rigs are then subsequently used for mining.

GPU mining owes its popularity to being both relatively cheap and efficient. Stacks of multiple GPU cards are connected in the form of rigs and used for mining.

There are cryptocurrency projects made for mining by GPU rigs. Some of the best crypto to mine with a GPU are Ethereum (ETH) and Monero.

ASIC Mining

ASIC(Application-Specific Integrated Circuits) are mighty, efficient, and offer hash power hundreds of times higher than the GPU mining rigs. ASICs are professional devices designed exclusively to mine cryptocurrencies.

The most famous cryptocurrency, Bitcoin, is now mostly mined by ASIC miners. This method is the most advanced form of mining.

Cloud Mining

People who aren’t interested in owning a mining rig of their own will often rely on Cloud Mining. This solution uses the computing power of remote data centers.

Different plans cost different amounts of money and last for a variety of periods. Generally, a standard plan can cost anywhere from $100/200 up to $5000 and can last from one, two, or five years up to a lifetime.

Mining Pools

Mining pools have come to dominate the crypto mining world. They consist of a group of miners who combine their resources on a specific network. Together, they attempt to mine the digital currency with increased cumulative computing power.

A mining pool has a greater chance of finding a reward, though this reward gets distributed/shared among pool members based on pre-specified terms. 

One can pool in one’s resources, be it a CPU, GPU, or ASIC, and enjoy the benefits of block rewards through mining pools.

Closing Thoughts

The evolution of crypto mining leaves users with a long list of decisions. Should they embark on a solo adventure and invest in expensive equipment individually?

If so, what are the best machines to buy, and how can they be properly maintained? Should they participate in a collaborative process, pooling resources with others?

Fortunately, for those looking to participate in this highly competitive world, the various credible solutions covered in this article should facilitate access to the full potential of mining!

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