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Crypto Mining

Crypto Mining

Guide

The simplest way to get into crypto is to buy some cryptocurrency from a regulated exchange in your own country but some people want to get more involved and consider mining. This article will help you decide whether mining is for you.

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What is Cryptocurrency Mining?

Bitcoin was the first cryptocurrency to be “mined”. It was invented by the pseudo-anonymous computer scientist Satoshi Nakamoto. The opening sentence of his paper is,

“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”

Satoshi suggested that instead of having a bank approve transactions we could hold a lottery of Bitcoin users and the lucky winner would be allowed to update the ledger that has everyone’s balances.

This randomly selected person would be allowed to approve a “block” of several thousand transaction at once and be paid the “block reward” for their work. The “block reward” is currently 12.5 Bitcoin and worth about $120,000 (September 2019).

The winning user has strong incentives to be honest;
• Other users check the winner’s work and if they cheat then they lose the block reward.
• Everyone has to pay fiat (real money) to enter the lottery so cheating and being found out will cost you money.

These incentives have worked well and billions of dollars of Bitcoin transactions have been processed with no significant difficulties.

The computers (and people) who enter the lottery to update the ledger are called “Miners” for reasons that will be clear later.

How do we select the winning miner?

Satoshi’s insight was that he did not have to collect the money for the lottery tickets. To discourage dishonesty it is only necessary that miners have paid real money to enter the lottery and that they could do that by “wasting” computing power and electricity.

Satoshi specified that the winning miner for a block would be the first to guess the answer to a difficult maths problem based on the contents of the block. Each guess costs a bit of computing power and electricity and it takes billions of guesses (“hashes”) to find the answer.

This solves two problems
• Selecting a random winner
• Wasting a lot of computing power and electricity (the price of a “lottery ticket”).

Why are they called “miners”?

Satoshi says,

“The steady addition of a constant of amount of new coins is analogous to gold miners expending resources to add gold to circulation. In our case, it is CPU time and electricity that is expended.” (my bold)

Cryptocurrency Mining for Fun and Profit

We now know that cryptocurrency mining is the process of spending computing power and electricity in the hope of winning a block reward.

Mineable Coins

In the 2009 there was only Bitcoin but soon other mineable coins were created and there are now many hundreds that can be mined. Each will have its own difficulty and block reward.

Mining Hardware

Satoshi originally suggested that Bitcoin would be mined using CPUs in desktop computers but users quickly realised that they could make more guesses per second if they ran special programs on their graphics cards (GPU). When Bitcoin became popular general purpose GPUs were replaced with specialised mining hardware called ASICs

[picture of a mining rig]

Mining for Fun

Lots of people mine for fun and to support the ambitions and values of their chosen coin. If you would just like to “have a go” then one of the easiest coins to start with is Vertcoin. Simply download their software to your PC and start mining with your graphics card. This is a good way to learn about coins, block rewards, mining and mining pools.

Remember that all cryptocurrency mining uses electricity and that creates heat. Please make sure that your PC will not overheat and damage itself.

Mining for Profit

Mining for profit is the process of making a capital investment in return for an income stream. You provide the money to buy the equipment and electricity and hope to make money back by gaining the block rewards. There are so many people mining cryptocurrencies that it is very unlikely that your computer will win the block reward. Therefore most people join a mining pool and share the profits.

Income is typically paid out monthly or daily in cryptocurrency.

A note about crypto income

Crypto miners are just like gold miners. When they have their asset (Bitcoin/Alt/Gold) they have to decide whether to sell it or keep it.

Some people will keep it to diversity their investments and others will sell it to get fiat (real money). The tax treatment of mining income is complicated and will vary by jurisdiction therefore you should seek professional advice.

Buying your own equipment

The best way to mine cryptocurrencies is to buy your own hardware. This is like mining for fun but at a larger scale. You can buy dedicated mining rigs for a few thousand dollars. Mining rigs are very noisy and generate a lot of heat so unless you have a very understand partner they will have to go in the garage.

Although this is a very safe way to mine because your computer equipment is under your control it is difficult to make significant profits. This is because your costs are likely to be higher than your industrial-scale competitors who are also mining for block rewards,

• You are only buying one mining rig, not thousands and so pay more for your computer
• You will probably pay more for electricity

This second point is very important. Most industrial crypto-mining is done in China where due to over-capacity electricity is very low cost or free.

Paying for electricity might not be a problem if you can use the waste heat. For example, people in Alaska and Siberia need baseload heating all year round and in other countries it has been used to heat greenhouses or swimming pools.

Mining rigs lose their value very quickly because faster, more efficient models are being released every few months.

Because of these challenges, for most people buying their own equipment is a hobby with a chance to make some money not a business or investment.

Co-location

One way to get cheap electricity is to use a “co-location” facility. Your equipment is installed in a data centre and supplied with cheap electricity. Some service providers will also sell you the mining equipment and install it for you. If you take up this offer you should ensure that your equipment is clearly identified and you can get it back if you need to sell it. This option is risker than hosting at home because your equipment is not under your control.

Mining Pools

It would be great to win the Bitcoin Block Reward but it is very unlikely because so many people are competing for it. To ensure you get some income you can join a “mining pool”. You donate your hash power to the mining pool and receive a share of the profits. Many mining pools are very large and can offer a predictable income. You should never pay money upfront to join a mining pool because it might be an “advance fee scam”.

Ways to lose money quickly

Unfortunately cryptocurrency mining has attracted lots of “get rich quick” schemes. Here are some ways that you can lose large amounts of money very quickly with no chance of getting it back.

Leasing a friend’s equipment

A keen hobbyist quickly realises that he can buy more kit if he gets his friends and family to invest in expanding his mining farm. I will just repeat the old maxim “neither a borrower or a lender be because loan oft loses both self and friend”.

Renting Hashing Power

Some mining pools allow you rent capacity by the hour. Since they would make more money simply mining coins themselves a cynic might suggest that this is unlikely to be a good investment.

Although unsuitable for most people these services can be used by cryptocurrency mining experts to profit from difficulty changes and newer coins. CryptoStar will accept advertisements for businesses who offer hash power rental by the hour.

Buying a cloud mining contract

Cloud mining firms offer to take your money and purchase and operate mining equipment as a pooled investment for several years. There a some honest service providers but most are Ponzi scams.

Ponzi scams pay “income” from new investments while paying themselves huge salaries. Eventually the money runs out and the scammers disappear.

If you would like to learn more about Cloud Mining and Ponzi schemes then there is an extremely good post here by Puppet.

CryptoStar does not accept advertising from Cloud Mining schemes that accept money from retail investors or self-managed pension funds. If you find a listing on our website for a company that is offering “cloud mining” services please report it.

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Search results for: Crypto Mining

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Cryptomining Software
United Kingdom | 160 City Road , Cudo Ventures , London, London, EC1V 2NX

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Cudo Miner is the future of cryptocurrency mining. An intelligent, yet simple to use multi-algo mining application with . . . advanced monitoring and management features, GPU overclocking and memory optimisations. Cudo Miner’s profit engine core technology, automatically mines the most profitable coin based on your hardware and market conditions. Mine more. Earn More. Cudo Miner. ‘We listen to our community and build from there.That’s why Cudo Miner is the best mining application on the market.” Cudo Miner is brought to you by Cudo, an ethical blockchain computing company delivering disruptive applications for cloud consumers, miners, gamers and charities.

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Crypto Mining
United Kingdom | 27 Old Gloucester Street, London, England, WC1N 3

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Crypto Currency Consultancy | Miner Hosting | Implementation ServicesHosting (Data center NL)Our hosting services are . . . designed to make sure your mining equipment provides the best possible results. We take care of the installation, the configuration, the optimal environmental conditions, reduction of downtime and advice on which pools or coins are profitable.ConsultancyWe specialize in helping our clients getting started in cryptocurrency. This includes wallet setup, exchange support, guidance in security best practices, cost analysis for mining hardware but also implementation of your crypto currency payment systems for your businessSupportDuring our joint crypto currency journey Bit Mining Europe will support you in making the right decisions by providing up to date market information on new trends and developments and we will make sure your equipment is performing optimally. Bit Mining Europe is based in London, our datacenter is in the Netherlands (near the German border). About usOur passion is cryptocurrency and blockchain technology. We are a group of motivated entrepreneurs and nerds who believe that cryptocurrency is a powerful and disruptive application of the the blockchain technology that will change the way (e-)commerce works today. Our mission is to assist small and medium sized companies, entrepreneurs or individuals in taking the right decisions in this new and sometimes confusing technological area.

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6Litr Crypto is a mining and consulting company managing both ASIC and GPU mining equipment. If you want to learn more . . . about blockchain technology or interested in building and running your own mining equipment, we can help. A managed miner space is also offered for those who do not wish to house their own equipment or don’t have the power, but wish to join the revolution.

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Crypto Mining
Australia | 114 William St, Melbourne, Victoria, 3000

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Arctic Fox Mining is an eco conscious systems-provider of Crypto 3.0 mining equipment.Our target audiences are corporate . . . mining firms and governments that require mining as a service. Arctic Fox Mining aims to lead the pack with world-class technological excellence and ethical, socially-responsible and environmentally friendly operations (that leave the Arctic Circle intact for generations to come).

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Hardware sourcing and hosted mining services for Bitcoin, Ethereum, Litecoin, Dash, Zcash, Monero and other . . . cryptocurrencies.

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Compute North delivers high-performance cryptocurrency mining and infrastructure solutions to customers around the . . . globe. Put simply, we mine, trade, advise and invest in these technologies with our steadily growing infrastructure. We are not speculators. We are cryptocurrency enthusiasts, investors and entrepreneurs. We enable you to quickly, easily and affordably participate in this dynamic opportunity. Cryptocurrency is the future of money. Digital currency, like Bitcoin, Litecoin, Ethereum and others, is generating exciting returns. Future prospects look even brighter as cryptocurrency is projected to continue exceptional growth.

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Crypto Mining
Canada | 2815 Thamesgate Dr, Mississauga, ON L4T 1G5, Canada , 2815 Thamesgate , Calgary, Alberta, T3J5H2

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The Crypto Plantation is a new company that was conceived in 2017. The founders of our world-class cryptocurrency . . . company have worked together on past successful construction projects with technical facets.Based on our previous experiences with mining techniques, we have taken a varied risk approach to mining. While Bitcoin remains the dominant currency and is heavily mined, we also mine Etherium and higher yield Altcoins. Our Strategy is that of a long-term view towards highest yields.The current members of our bitcoin mining team come from different scientific disciplines, but our common faith in cryptocurrencies has brought us together. We are all strong believers in the future of digital currencies and we love being part of this growing community!

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WHO WE AREElite Mining Inc is a dynamic operation with several facilities throughout the Washington state. It takes a . . . business acumen and operational excellence to compete in the world arena of cryptocurrency mining.We are an unlikely alliance of people with technical, trading, business, and deal-making talents. You don�t just meet a team like ours. Unless it�s the lucrative and advanced business of Bitcoin and Ethereum mining.Let�s face it, unfair advantage is the name of the game. When you have that both in the team capability AND the market position, you get Elite Mining.WHAT WE DO- Preserve excellent operational condition of facilities- Establish relationships with partners and business�s for operational advantages that give us lower overhead and a streamlined opening of our locations- Constantly renew the miner equipment to maintain the most profitability- Target-mine specifically identified crypto-assets depending on fundamental analysis and current profitability � to be liquidated at the right market cycle phase- Gather real-time mining data in one transparent investor dashboardNO SALARIESEverybody is compensated with equity only. What better way to control expenses AND make sure everyone�s performance is at the highest.

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The blockchain revolution was born out of the need for transparency and trust. We believe that the structures behind . . . blockchain must be thoughtfully and sustainably constructed for the technology to transform society. To achieve our vision, we provide turnkey cryptocurrency miners, co-location and mining management services to the global mining community. In doing so, we empower innovation, opportunity and prosperity, putting people back in control.

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Crypto Mining
Canada | Main St, Dresden, Ontario, N0P

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Trusted Canadian distributor of cryptocurrency related goods and services.- ASIC Mining Hardware & Accessories- Hardware . . . Wallets- Crypto Art- Apparel

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Crypto Mining
Hong Kong | 6/F HARBOUR CTR TOWER 2 , 8 HOK CHEUNG ST HUNG , HOM KOWLOON CITY, HONG KONG, hung hom

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Crypto Miner Bros headquartered in Hong Kong is one of the largest miner distributors into offline sales. We are a team . . . of professionals with an experience into Blockchain Management, Offline Sales, E-Commerce and Cryptocurrency Mining. Seeing the current scenario and based on the past experience it is very difficult for the International Buyer to get the product hassle free. It is very hard to find authentic hardware in the Mining Industry. We deal into brands like Bitmain, Innosilicon, Baikal, IBeLink and Whatsminer. We looking into our customers comfort by providing them proper information on products current rates and availability in this fluctuating market. We are partnered with various suppliers in China and Hong Kong. Our ultimate goal to give the best service and authentic mining products at reasonable prices with superfast delivery. Cryptocurrency is the future. Bitcoin and Crypto-currencies as a logical �next step� money and are close to becoming a mainstream form of payment in the future as per the market study by Researchers from Imperial College London and the trading platform eToro assessed the roles of traditional currency and measured how close cryptocurrency had come to fulfilling these.�The world of Cryptocurrency is evolving as rapidly as the collection of confusing terminology thataccompanies it. The decentralized technologies have the potential to upend everything we thought we knew about financial systems and financial assets.� Crypto Miner Bros have also been certified as a trusted seller by ASIC Miner Value, CRYPTO Miner.deals are some of the global leading websites in the cryptocurrency mining Industry. We are doing our part by promoting it into the world. We want your support for transforming theworlds into a better place.

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Mining Union – lietuvi�ko kapitalo kompanija vykdanti kriptovaliutos kasyba, angl. cryptocurrency mining. Kompanija . . . i�gauna Zcash, Ethereum Classic, Dashcoin, Litecoin, Monero, Bitcoin. I�gaut? kriptovaliut?, pagal ?sigyto plano rodiklius perveda savo klientams. Mining Union savo klientams taip pat si?lo affiliate program?.

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