With the growing popularity of cryptocurrencies, more people are becoming curious about how to get the biggest profit in digital gold or digital silver and other forms of crypto trading.
Some invest early in the promising new virtual currencies, including gold backed cryptocurrency, while others are more interested in getting these currencies for free through a process called mining.
Before you turn your mom’s basement into a mining field, it’s best if you understand how it works and what are the things involved in mining metal cryptocurrency and other digital currencies.
Mining may let you acquire some crypto coins or tokens without having to dole out cash, but it’s not exactly investment-free. Let’s take a look at some of the things you need to prepare to start amassing your digital gold:
While you need your pickaxe to mine mineral wealth from the ground, the computer is your tool to mine these virtual currencies from existing protocols.
You don’t have to set up an expensive computer for this purpose. The component which is crucial for this process is your computer’s processing power.
However, even the fastest and snappiest CPU can still be too slow (not to mention, quite expensive) for mining gold backed cryptocurrency and other digital currencies. For this reason, GPU — which is found in your graphics card — is used instead.
Now, if you want something a lot speedier than GPU, you may use these miners called Application Specific Integrated Circuits or ASIC.
Other than improving your computer’s processing speed, you don’t need to add other hardware for this purpose. It is advisable to keep this computer dedicated to its task of mining virtual currency, as other tasks will take some processing resources.
Equally important to your computer hardware is the quality of your Internet connection. Mining metal cryptocurrency and other digital currencies is an online activity which requires the fastest possible connection speed in order to effectively do more computations.
A wired Internet connection is advisable for consistent data transfer.
Now that we got the hardware prepared, let’s get to the software side. To run the actual process, we need mining software. It allows your computer to connect to the cryptocurrency network and monitors the activities of your miner and the real-time speed.
No matter what operating system your computer uses, there is mining software available for each.
The mining pool is a group of miners cooperating and sharing block rewards proportional to the hash power they contribute to the system. There are about 20 major mining pools around the world, with about 80% of them based in China.
There are other minor players among the mining pools that are beginner-friendly and provide good support. Do your research before joining one to avoid scams.
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After grinding the numbers and mining “blocks”, the effort will be rewarded by crypto coins. This is where the coin wallet comes in. Think of it as a digital wallet that is secure and is used to send, receive, and store your virtual coins.
Each wallet works with specific crypto coins and it has its own account number called public address. From there, you can view your balance for each coin and trace back to the transaction on the blockchain.
There are lots of types of wallets with different functions. It’s best to get to know them before deciding on which wallet to use. After all, the whole point of mining cryptocurrencies is to earn them!
These are the major things you need to prepare to start mining for Bitcoins and other cryptocurrencies.
Some people enjoy the process of setting up their own miners, while others prefer to do mining from the cloud instead.
Trading is also another option, with some metal cryptocurrency, such as Kinesis, gaining popularity.
Keep these tips in mind and you’ll be acquiring your crypto coins soon. Don’t forget to share it with your friends who might also be interested in building some virtual assets.