What is crypto mining? How to mine cryptocurrencies? How much profit does cryptocurrency mining make?
"Transaction verification, network security, hash..."
What is Crypto Mining?
Cryptocurrency mining or crypto mining is when a computer solves complex transactions and performs certain tasks and is rewarded with cryptocurrency. Anyone who has a computer and internet can mine crypto.
To understand cryptocurrency mining, it is essential to understand blockchain technology first. There are blocks and chains in blockchain with the most basic expression. Blocks are the section that contains information about transactions such as date, time and amount. There are unique cryptographic codes called hash in this section. If a new block is added to the blockchain (i.e. if a new operation is performed), this action must be confirmed. This is done by computers connected to the network.
What is meant by crypto mining is actually the validation of transactions. Networked computers confirm that the transaction is taking place exactly as specified, and ensure that the transaction is completed.
How to Mine Cryptocurrencies?
There are many methods of doing cryptocurrency mining today. It is possible to separate these methods in terms of profitability, cost and difficulty.
1- ASIC mining
ASIC, ie Application-Specific Integrated Circuits, are systems focused on cryptocurrency mining.
ASICs, which make much more profit than other types of mining thanks to their high level performance, are nowadays one of the most preferred mining methods.
Although they are very powerful and expensive equipment, many people give negative opinions about ASIC products. The biggest reason for this is that it almost kills CPU and GPU mining. The pools and farms that many ASIC miners have come together to monopolize cryptocurrency mining reveal a completely contrary to the nature of the industry. Because cryptocurrencies have a fair, decentralized and distributed nature.
2- GPU mining
The most popular and known method of crypto mining is GPU mining. The meaning of the GPU is the graphics processor unit.
Most miners prefer GPU mining because of price/performance, rather than purchasing ASIC products, which can cost thousands of dollars today. It is possible to create a hardware called “GPU Rig” by combining multiple graphic processor units with this relatively cheap method. A main board and cooling system are also integrated into this equipment.
With the explosion of the number of users mining with GPU at the end of 2010, graphic processor unit sales exploded and the products became unavailable all over the world. Miners who are heading for GPUs that offer top performance have faced reactions from the video game world. Because GPUs, which were available at much lower prices for a period, saw a huge increase in their prices due to the high interest of miners.
3- CPU mining
Mining is also possible with the CPU, the central processing unit (processor). By installing a mining software on computers used in the home, CPU mining can be done easily.
However, today, this method is almost never used due to its slowness and being very weak compared to other methods. It has also become a method that is far from profitable due to high electricity and cooling costs. The reason why some people are still mining with this method is simple: it is enough to have only one computer for CPU mining. However, users who want to make profit should not mine with the CPU. But if you want to learn the process and start mining somewhere, you can try this method for trial before making big investments.
4- Cloud mining
Cloud mining is a very common method to start cryptocurrency mining.
In this method, you make regular payments to someone who will be mining for you. In other words, cloud mining consists of a mining equipment leasing process. The hardware works away for you, and the profit is regularly sent to your crypto wallet. Large companies with mining farms and pools are now able to offer users the cloud mining method.
Users who do not want to buy a mining rig or ASIC can mine remotely by leasing. You can also experience this method after making your payment by registering to one of the companies providing cloud mining service.
Just like in other mining types, it is unknown how long you will make a profit in cloud mining. Because the prices of cryptocurrencies are very variable. Also, if you want to mine with this method, be careful when choosing which company to get service from. There were many frauds that claimed to provide cloud mining services for very low fees.
How Much Profit does Cryptocurrency Mining Make?
Depending on the type of mining you choose, the cryptocurrency, and current prices, making a profit from cryptocurrency mining is a process of patience. It takes time for the product or service you purchase to cover its own cost. Miners with multiple GPU equipment or ASICs earn much more, while those who are self-mining with a single GPU have relatively low earnings.
It is also important to note that mining rewards are halved every four years. For example, after halving on May 11, 2020, bitcoin block reward decreased from 12.5 BTC to 6.25 BTC.