In an earlier post I explained what crypto currency is, how it worked, and basically described what you can do with it. Now also within that same post, I briefly talked about mining and how it fit into the whole process.
Now if you’re new to the whole crypto thing, you might be wondering what is crypto currency mining?
Well to give a short answer, it’s where people compete against one another by verifying transactions — and whoever wins earn a small amount of money.
The questions I want to answer today though is how does mining work, what do you need in order to do it, and most importantly if it’s even profitable enough to pursue.
So without further ado, let me jump right into things here.
What Is Crypto Currency Mining?
Crypto currency mining is the process where people (or what we like to call miners) verify transactions into a public ledger. Now each time someone does this, new crypto coins are created and given to the person as an award for verifying the transaction they just did.
Much like how the government will print new money and put it into circulation.
The main difference however is crypto mining is controlled by very complex computer algorithms, which keeps inflation in check by allowing a steady flow of coins to be brought in about every 10 minutes.
How Does It Work?
When someone sends crypto currency to another person, this transaction is made into a block which will then be collected by a “miner”. The miner (or more precisely the software + hardware a person is using) must then solve a very complicated math puzzle to make sure the transaction that just took place is valid.
For example someone trying to send crypto currency without actually owning any would be fraudulent, or someone sending the wrong kind of coin would also be considered invalid.
Now when these blocks are created they aren’t just sent to a random miner to be deciphered, but instead are basically thrown at there as a free for all allowing anyone to try and solve it. And the more miners there are the harder the equation becomes, and the fewer there are the easier it gets.
But as I previously mentioned, whoever is the first person to solve the equation will then receive a small amount of crypto coins as payment for their work.
What Do You Need In order To Mine Crypto Currency?
Now while essentially anyone can become a miner to try and earn some extra money, before you can do anything you must first have a few things in order to decipher these complicated equations.
Here’s a list of 7 things I recommend you have in order to mine crypto currency effectively:
1. A mining software – First you’ll need to get a mining software program that will be installed onto your computer.
2. A crypto coin wallet – This is basically a password protected database that will keep all your money safe and secure.
3. A mining pool you can join – This is where a community of miners join together to make earning money much easier.
4. Becoming a member of an online currency exchange – This is where you can exchange your crypto coins for real money and vice versa. One of the most popular ones right now is called Coinbase.
5. A separate desktop – Due to the high demand mining puts on your computer, it’s necessary to use a separate desktop from the one you normally use. Also it’s advised you custom build this desktop to generate the most amount of money you can from mining.
6. An ASIC chip – this is a specialized processing device that basically does all the mining work for you.
7 – A fan or cool location for your desktop – Then last but not least, you’ll want to find a cool place for your desktop and perhaps buy a fan to blow air across your computer to prevent it from overheating.
Then once you have all of this in place, you’ll simply turn on your computer, activate your mining software, join a mining pool, and start collecting money.
Is Crypto Currency Mining Profitable?
If all you’re looking for is to generate a few dollars a day, then sure you could try mining if you want — however if your expecting this to be basically a second source of income then you’re going to be sadly disappointed.
You have to remember after you buy all the hardware, software, and other accessories that come with mining in the first place, it’s going to take a while to break even and even longer to start earning a profit.
However if you’re willing to invest say around $5,000 dollars for a serious computer and you don’t mind consuming a lot of electricity — then you could have the chance of earning about $30-$50 dollars a day.
But due to all sorts of factors like the price of the virtual coins, how many miners there are, and how much energy you’re using — you could still end up making very little even after buying some top-notch hardware.
So you’re welcome to try and earn some money with crypto currency if you want to, but you’d have a much better chance of buying and trading these coins rather than actually mining them.
Even though mining is an essential part to make crypto currency work, as you can tell within this post it’s not necessarily a good thing to do if your in it for the money.
Now a few years back it might’ve been a lot easier to make money with mining since it wasn’t so popular, but due to the sudden interest in bitcoin it’s brought a lot of competition to the mining world and as a result made it to where it’s basically not worth doing anymore.
Here’s How I Prefer To Make Money Online
Now if you’your still wanting to find a way to earn some extra cash online, I would recommend you forget about crypto currency and look into building a business online.
And yes it will take time and work to actually create money this way, but you can essentially make however much you want depending on how hard you work — unlike crypto mining which is all based by chance.
And best of all you can create your business around anything you want, and you can do it all for about $30 bucks a day! Not too bad right?
So if this sounds like something you may be interested in, check out my favorite program online that will teach you step by step how to do this by clicking the image below.
I hope you found this post helpful. However if you still have questions in regard to mining, leave a comment below and I’ll be happy to help you out. 🙂