How to Mine Cryptocurrencies?

RigLooking to jump on the cryptocurrency mining bandwagon? Thirsty to absorb all the know-how you will need on how to mine the so-called crypto coins? Our team of experts aims to provide you with everything you need to start mining and become a successful miner. The purview of our website is to lead you through a step-by-step guide, which will become your ultimate handbook when mining cryptocurrencies. Scroll down and learn how to get into decentralized financial trends.

 

List of all Mineable Coins

Doesn’t matter if you’re an old sport or newbie in the crypto thematic, it’s always good to stick the most recently updated information. In this spirit, we are going to present a list of all minable coins to your attention, which you can sort by market capitalization place or alphabetic order. If you click a specific coin, you’re about to be referred to the article related with its characteristics, requirements, and configurations. If you’re missing a coin in it, this probably means that it isn’t mineable anymore.

# Name (Tag) Algorithm Hardware Block time Block reward Article
1 SHA256 ASIC 10 min $3,806.06 USD 12.5 BTC How to mine BTC
2 Ethash ASIC GPU 20 sec $136.46 USD 2.91 ETH How to mine ETH
3 SHA256 ASIC 10 min $131.93 USD 12.5 BCH (610) 922-6219
4 Scrypt ASIC GPU 2m 35s $45.02 USD 25.00 LTC How to mine LTC
5 CryptoNight-V7 CPU GPU 1 min 55 sec $48.65 USD 3.11013 XMR How to mine XMR
6 X11 ASIC 2 min 20 sec $82.59 USD 3.35 DASH How to mine DASH
7 Ethash ASIC GPU 14s $4.36 USD 3.88000 ETC 7209033791
8 CryptoNight ASIC 2 min $0.00065 USD 1,506.89 BCN How to mine BCN
9 Equihash ASIC CPU GPU 2 min 30 sec $52.34 USD 10.00 ZEC How to mine ZEC
10 Equihash GPU 9 min 50 sec $12.86 USD 12.5 BTG How to mine BTG

Why some coins are mineable and others not? How’s possible that it changes anyway? Well, the blockchain’s nature doesn’t guarantee that a coin is mineable, for the purpose of being so, the coin is supposed to bring some profits. What does this mean? Simply, it must be based on the Proof-of-Work consensus to be mineable. There are some coins switching their Protocol with another one, such as Proof-of-Stake, Proof-of-Importance or Proof-of-Authority, which makes them not mineable after the swap.

 

What is Mining?

If you never had anything to do with mining, let us guess what do you imagine right now – a bunch of pickaxes and also a helmet for each miner? Doesn’t really look like that. It’s way more complex and of course – timelessly interesting. Are you ready to start your crypto adventure? Let’s go get it together!

Generally, mining represents adding blocks of transactions to the blockchain’s public ledger by solving a complex mathematical equation. Let us explain it via step-by-step schema, so you would be able to imagine how it actually works:

  • Step 1 – Confirm a transaction – validate the information, using the trust between the miners.
  • Step 2 – Add the transactions in the blockchain (a public ledger) by using your computational power to devote it to the current block.
  • Step 3 – Solve the perplexity using your hash rate (power) to find the missing element – a process incarnating the computer science and the mathematics theories to decipher the missing information.
  • Step 4 – Gain the reward – once you find the resolution, you’re about to create the next block, which is automatically giving you the reward of puzzling out the last one (this reward represents both the fees related with the transactions in the block and the newly launched coin).

Here’s the place to note that you might be mining individually and get all the reward for yourself or mine in a team, which is going to separate the reward between the members, according to the specifically used rewarding system. Some more about it later on in the article.

How Does it Work?

It’s all about the Proof-of-Work consensus (PoW). The whole mining process depends on the PoW’s role in the blockchain world. This is a method, which ensures that the resolving of the block was enough difficult when speaking of time and costs (energy and hardware).

The problem: using your hardware and computational power to process transactions and create blocks – solving a mathematical equation.

The solution: a hash – this one finds the input by knowing the output via a function of hash power, which resolves the problem irreversible.

How this obstacle could be overcome? The algorithm, used for mining purposes calculates a bunch of random variables and check if the hash fits the requirements, if not – it does it again until there’s a perfect match.

Finally, this is a consensus algorithm, where all the users must agree with each other by trusting the others, so as its name (PoW) says – once checked, the transaction is approved.

What makes it so hard to solve a block? Simpler than expected – there’s a difficulty parameter of the blockchain, which regulates the mechanism of working and also the block time. There’s a simple rule when speaking of difficulty – the more miners are joining the network, the rate of the block generation is increasing, which makes the difficulty higher to compensate the numbers back to normal. If you try to imagine it, it must be something like:

An infographic showing how crypto mining works

 

What do You Need to Start Mining?

The backbone of the successful mining process is for sure the hardware you’re willing to use. Therefore, we’re going to explain in detail this important choice, but you should also consider a few other flashes of mining, which are related to the hardware. You should search for your perfect mining match when taking decisions to finally accomplish a configuration, which suits your needs and expectations. Take a look at our list and we’re going to explain you each of step:

  • Mining Hardware – either GPU or ASIC
  • Mining Software – only needed for GPU Mining
  • Crypto Wallet – to receive mined Coins
  • Mining Pool – highly recommended for most Coins

It’s always good to know what exactly you’re starting to deal with, so it’s also recommended to check the profitability of a coin before you set up all the mining equipment. How does this happen? Once you choose a coin, there’s an application, called mining calculator, which you’re able to use to check what is the estimated income you’re about to receive once you start mining. Of course, it’s just a supposal, based on the current market capitalization parameters, which is going to vary in time, so don’t get too enthusiastic, check it regularly before you choose your coin. Now go back to the list of coins and check the one you’ve been thinking of, using the mining calculator.

Mining Hardware

Nowadays, users have an enormous choice of hardware devices, which all offer different advantages, depending on the intent of how are they going to be used. In the very beginning of the mining era, users were able to mine even using only their CPU (computer power). There are plenty of factors, which influence the mining process and its evolution and one of them is the mentioned mining difficulty.

Its increment imposes the need for more powerful mining hardware to use in order to calculate the mathematic equation. Ultimately, we observe a hardware revolution with the recent usage of GPUs. Also called graphics cards, used for computer games, the GPUs have developed that much that they are one of the most common mining hardware options on the market. You can use either one or multiple GPUs to mine a cryptocurrency. When you have more than one card, the configuration is called a mining rig, which is known as more efficient.

Overview of different kinds of Mining Hardware

As technology develops every single day, there are more intelligent forms of hardware devices on the market yet. The most popular among the new miners is the ASIC revolutionary mining hardware, which is built to mine the most powerful way a specific algorithm. The ASIC machine is the latest development, which avoids the usage of a mining software – normally needed for GPU miners. A little bit more expensive, compared to GPU cards, but way more powerful, achieving better mining results.

The newly updated device, similar to the ASIC one, is called FPGA. This is a mining hardware, which is flexible and able to be programmed to switch algorithms. What does this mean? If today you’re mining the X11 algorithm and all the coins, supported by its 11 hashing functions, but tomorrow you decide otherwise. Let’s say you would now want to mine the Bitcoin – you’re able to change the FPGA configuration and make it mine the Sha-256 algorithm. This way, even if you want to quit mining a particular currency, your investment in the hardware machine isn’t wasted – you can mine another one. Now if you’re extremely interested to know more, visit our dedicated page – Mining Hardware to observe all the pros and cons of the today’s mining devices.

What else to Consider?

As you might already have understood, mining is generally the proper choice of a hardware, but just like any other thing, it will need some maintenance to perform the best results. How exactly to do it? There are a few moments you need to consider on a daily basis to assure your hardware’s best performance. It’s not just a question of setup, it’s more like a daily care of your device. The dust might be a crucial point in the successful performing of your machine, so you should clean it frequently and gently. Normally machines produce some noise and make some heat, so these are very important issues to consider how to handle. And last, but not least – the power consumption. If your electricity network can’t resist the amperage you’re planning to invest in your hardware configuration, this might cause a problem with the electric installation and damage your device. There are several tips we can advise you to pay attention to, so visit our page Ventilation, noise and cooling decisions for your hardware to be completely aware of all the small details.

Cloud Mining

Now you’re probably thinking “Isn’t there any alternative to skip all those technical things somehow?” – well, of course, there is. The alternative which our team recommends to new users is called Cloud mining. This means that you’re basically renting a mining hardware by avoiding all the technical specifications. A middleman, the provider of the mining services, is about to manage all the mining process for you – speaking of hardware, configuration, and setup, or even deciding how to proceed according to the market capitalization changes. All of this just by signing a contract and paying some fees. The provider takes care for all the maintenance and power responsibilities and you’re just following your wallet. There are several very recommended cloud mining servers, where fees are extremely low, you’re not relied on with a time period or cancelation tax if you want to quit. Sound pretty good, isn’t it? If you don’t feel comfortable with the hardware configuration, don’t mind trying the cloud mining option. Check our dedicated page to know everything you need to pay attention to when starting this journey (avoid scams and potential phishing sites).

Mining Software

Let’s see now, we already mentioned that the ASIC, respectively the FPGA mining hardware doesn’t require a specific software, but GPUs on the other side needs some extra help. This means you’re supposed to install and run a software which is going to collaborate with your GPU miner to manage your mining process. Doesn’t matter if you have one or several graphics cards, you’ll need it for sure. But how to make a proper choice? Which one is really the simplest to use and how you can set it up on your computer? To find all the answers check the article for the particular coin, you have chosen. There you’re going to check all the best software applications, depending on the GPU device and the coin’s particular requirements. Can’t wait to find your coin match? Jump back to the full coins list and find it.

Wallets

Dived into the mining ocean and need to keep safe your coins, so you can both store and operate with it in the same time? Here comes the important role of the wallet. A crypto wallet doesn’t really store your coins but receives them and keep the keys with which you’re able to access it. Not every wallet is in measure to stock every coin, in fact, all most each coin has developed a wallet for itself. There is also some multi-coin wallet, which can handle more than one coin. Each of our articles is going to advise you which is the proper wallet to use, according to the coin’s specifications. Anyway, if you’re interested to deeply understand how wallets work and how to properly manage yours, you should definitely go to our website, which is revealing all the important details about how to choose and secure a wallet. They are used not only for the purpose of mining but also simply handle a cryptocurrency. There is a diversity of types to choose between, depending generally on the amount you’re planning to operate with and the level of security you’re expecting to have. Don’t hesitate to prepare yourself before you start mining, it’s always better than jump into the unknown without a life jacket.

 

Solo vs Pool Mining

Mining is actually a competition – who’s going to mine the next block. And which is the most important criteria when competing? That’s right – speed. When speaking of mining speed is represented by hash rate, in other words, how many hashes are you able to mine per second. Mining individually is expectedly harder, because your hash rate can’t compare with the one of a whole team’s. The investment for hardware equipment and electricity bills is waiting to be returned, so if you want some stable and frequent incomes, we strongly recommend you join a pool. Combining your hash rate with one of the other miners gives you a better chance to mine a block. Of course, you’re going to separate the reward once you find and validate the block, but it’s better than waiting (sometimes for years) until you mine your first one alone. Payouts are important and when choosing a pool, you should consider not just the reward system and fees but also the location of its servers. On these ones depend the chance of a fail down – if you’re far away from it, your connection won’t be strong enough. Be aware of all important tips and visit our page Mining pools to have a better idea how to proceed when choosing one.

 

Is Mining Profitable?

The mining process as already explained is a deep jungle of variables, where you should find the best way to survive. You should really be well informed to know what to expect even roughly. Want to summarize it once again?

  • Coin’s actual price
  • Your actual hash rate
  • Actual mining difficulty
  • Costs for electricity and devices cooling
  • Investment in hardware / Cloud mining service

Did you observe something? The bigger part of the variables contains the word ‘actual’ and that’s because they actually change every second of the day – hard forks, difficulty bomb attacks, new hardware devices, market capitalization ups, and downs – it’s all in a matter of minutes. Anyway, there’s a simple rule when speaking of a coin’s price – the more people are buying it – the price increases and the more people are selling it – the prices go down.

Do you remember the last years’ Bitcoin speculations? Its price was about $ 20,000! There was a prediction that the price is going to grow, and many people started buying it, so it went up for real – but then when it came back to normal a few months later, all the coins listed in the market capitalization suffered this event and their prices decreased significantly.

If you think about the hash rate, you should definitely take a look at the difficulty too – there’s a proportional relation – the more the hash rate of miners grows (by inventing more powerful devices for example), the more the difficulty increases just to compensate the mining conditions. That’s why you’re not able to earn the same amount of money with the same hardware all the time – difficulty increases, and your reward gets smaller.

Expecting to get rich in a few clicks? Well, the more you invest, the more you’ll have in return, but of course – it takes some time. There’s no doubt, mining is profitable, it just depends how are you going to handle it and manage the whole process. You’re able to have a constant profit after you cover the initial investment. If you’re planning a home setup of ASICs or GPUs, you might expect a few dollars/euros per day. If you’re about to mine using your CPU or a mobile phone, you risk overheating your device in the first place, and on the second one – there isn’t any profit of doing it. If you consider a mining farm or something, that’s a huge project and you should definitely know how to handle the crypto situation before you invest a bunch of money in the nowhere.

Once the initial investment is returned, there are two important factors to think of – coin’s price and electricity cost. Your electricity bills affect the most your profitability and no matter how new and modern your hardware is, you still need a lot of power to use it. If the area you’re living in, impose a high price per kilowatt hour, then you’re going to experience fewer profits compared to other areas where electricity is cheaper. The coin’s price is fluctuating, so the border between profits and losses could be crossed extremely fast – pay enormous attention to it.

All the other factors from our list are used to calculate your profits using our mining calculator. Each of the articles dedicated to a certain coin offers you the opportunity to use a calculator. It is going to require you to fulfill some information: the price of your hardware device or cloud mining contract, your electricity cost, the power consumption of the hardware, the pool fee and your hash rate. This way you’ll be able to ask for an hourly, daily, weekly, monthly and yearly estimation of your incomes, considering the current market capitalization parameters.

Thinking is the priority – even if you’re currently mining with losses, you’re not supposed to stop and sell the coin immediately but wait – the price might increase, and you could sell them for more money a bit later. Managing and handling a cryptocurrency isn’t just a bunch of setups and machines, but also have a deep knowledge and feel the market’s pulsations.

Which Cryptocurrency to Mine?

Now, the most important thing when starting such an adventure as mining is to place some goals. What do you want to achieve? How much are you ready to invest (don’t invest more than you’re ready to lose)? Do you have any crypto knowledge? Are you planning a huge project (such as mining farm) or something like a startup journey (home setup)? Do you just want to try your luck (short term) or you’re willing to become an expert (long-term)? Once you answer all these questions, you can take a look at the market capitalization list – first mark a few coins, then check the profitability of each of them using the Mining calculator. Finally, you’ll be able to take a decision, based on your mining expectations, the current market conditions, and your personal requirements.

 

How to Cash out Your Money?

Perhaps you are asking yourself ‘How to make money with that?’. If you aren’t planning to keep it or spend it at some shopping, which offers cryptocurrencies as a payment method, then you would definitely want to trade or sell your coins for sure. Here comes the moment when you need an exchange to do it. How to find one, by avoiding scams and phishing? How to create an account and pass the buy/sell procedure with no security worries? All those answers and much more at our page Exchanges – go get your money out of the crypto sphere right into your bank account – ready to be reinvested or spend.

 

FAQ

Here’s the place to find all the answers to the most common questions related to this topic.

Proof of Work and why Some Coins Aren’t Mineable?

Maybe when scrolling our full list of coins, you have observed that some of the major coins on the market are missing. Why is that so? Consensus rules change every single day and that’s why some of the coins become not mineable.

Mining itself is possible if the algorithm of the coins is based on the Proof-of-Work concept. How exactly to imagine the PoW system – this is a consensus, which solves a cryptographic and computational problem. There are two types of participants in the system – users and miners. If a user would like to send a transaction to another user, a third party – the miners, are supposed to confirm it and broadcast it. Why consensus? Because more than the half miners are required to agree when making a change of the Protocol. Each mineable coin has a reward mechanism built into it. This reward varies but once a block is mined, it goes to the miner/pool of miners you successfully did it. This is what make miners to mine.

It’s a very energy consuming process when compared to the Proof-of-Stake for example. The stake represents a number of coins, the user is ready to lock for a certain time and in return, they get a chance, which is proportional to their share to find the next block. It has its own disadvantages as the danger of the double-spending for example.

That’s why some hybrid consensus algorithms appear, combining the PoW and the PoS. The most recent example of a coin, which isn’t mineable anymore is Bulwark. Another coin, looking for the PoS advantages is the top altcoin Ethereum. Can’t remember a hybrid coin right now? – Dash and Zcoin are perfect examples.

What is a Hash and What Does Hash Rate Means?

As a matter of fact, the hash rate is a message, which is transformed using a cryptographic function to its value. In our case, the hash represents a data with a fixed size, which is designed to be one-way functioning, which makes it impossible to revert. In other words, the hash is a result of a complex mathematical calculation, which is used in the blockchain technology as an algorithm implementation to make the data transfer more secure by ciphering it.

In the PoW consensus, the mining process’s goal is to find the right hash, missing from the block, by trying random variables and calculating if a number matches the equation. Once the miner finds the solution, he must announce it in the network, so the result might be verified by the others – when the transaction is confirmed, the miner gets its reward.

And what a hash rate is? This is the power provided by your hardware machine which lets you mine faster to find a block. This is the speed, used by your hardware device to calculate a mathematical equation with lots of computation – how many hashes per second are you able to mine. A few words on how to measure it? Generally, it uses the usual denominations:

  • 1 kH/s is 1,000 (one thousand) hashes per second
  • 1 MH/s is 1,000,000 (one million) hashes per second.
  • 1 GH/s is 1,000,000,000 (one billion) hashes per second.
  • 1 TH/s is 1,000,000,000,000 (one trillion) hashes per second.
  • 1 PH/s is 1,000,000,000,000,000 (one quadrillion) hashes per second.
  • 1 EH/s is 1,000,000,000,000,000,000 (one quintillion) hashes per second.

This is one of the most important characteristics of your hardware, so check it out carefully before you choose one. The higher your hash rate is, the more likely you’re to mine a block.

What is Mining Difficulty?

As you can imagine, the number of the mining difficulty measures how difficult is to find a hash. It is adjusted periodically depending on the hashing power of the miners in the network. There isn’t a minimum or maximum target how much could it be. The block time is a parameter based on the difficulty and it shows the average time needed to find a solution, depending on the difficulty of the hash. Sometimes a miner can be lucky to find a resolution earlier than the given block time and sometimes it takes more than the average planned time. Anyway, the system is adjusting itself and constantly change the difficulty in order to keep the actual block time reachable.

Basically, the more hashing power we add to the network (by increasing the number of miners or modifying the hardware devices to mine more per second), the more the difficulty is going to get high – this happens in order to compensate. It’s a vise versa rule – if the hashing power decrease, the difficulty is also going to become lower. If blocks are generated too fast, the difficulty increases – simple. However, each blockchain consists of a code where the adjustment of difficulty is entangled.

For example, the Bitcoin adjustment is happening once per 2 weeks (or 2016 blocks). So, if during the last two weeks the hashing power of the network has increased, it is going to reflect when the adjustment occurs, not immediately. This opens an opportunity for some blockchain abuse, but that’s another story to be told.

What are the Cryptocurrency’s Limits and Regulations?

Most of the cryptocurrencies have limits – this is a number of their supply, which keeps the currency stable and decentralized by avoiding inflation (it isn’t possible to print some in the federal reserve once the money is gone – the fiat example). Once we reach the limit, new coins can’t be created again, so miners are going to gain just the transaction fees as a reward while the confirming process is performed. To gently slow the process of losing the reward, developers have implemented a halving mechanism in the blockchain’s code. Depending on the coin, it occurs in a certain period of time – the reward goes lower until it finally disappears. In the Bitcoin example, the reward halves with 50% of its amount every 4 years.

 

Bottom Line

Ultimately a well-planned trip always needs a roadmap. Feel free to read, follow and use all the guides in the articles, including the hyperlinks inside – it’s an information prepared based on a deep research and most important – frequently updated. Our team of experts is right by your side in your crypto experience and we have it all here – use us as your personal crypto advisor. Let us be your personal Cryptopedia in the complex crypto world!

Jonathan Guy

Author

As a seed investor in multiple cryptomining initiatives across the globe, Jonathan has attained invaluable insight on best practices that ensure optimal power efficiency and profitability. In sharing his knowledge, he aims to strengthen and expand networks worldwide.