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What is Coin Mining?

What is Coin Mining? Pocket 04 effective mining experiences

What is Coin Mining? What does a mining machine include? Should I mine junk coins? Immediately save 04 effective mining experiences in 2021!
What is Coin Mining? Do mining coins make a lot of money? Why is BTC hashrate increasing and what effect does it have on BTC price? Those are the questions I often get from you guys. For me, mining is an attractive topic and it is an integral part of the blockchain’s operations.

I even know a few brothers who have been mining coins every day, getting rich from mining. So in this article, I will provide you with the necessary information about mining and how to mine coins most effectively!

What is Coin Mining?

Mining is the use of mining power to solve complex algorithms of a coin. During the mining process, miners simultaneously confirm transactions on the blockchain system and create new blocks to add to the blockchain.

For example: On Bitcoin‘s blockchain system, miners will confirm transaction information sent/received between users. It includes information: BTC quantity, sending and receiving time, arrival address, outgoing address, …

Once the confirmation is complete, this information will be included in a block. When that block is full, a new block will be created.

The purpose of mining coins

To answer this question, let me reiterate a bit about how blockchain works:

  • A blockchain system consists of transactions performed and recorded information on each block of the blockchain.
  • To be able to record transaction information on the block, that blockchain needs a common consensus mechanism.
  • Some blockchains use a consensus mechanism called Proof of Work. That is, participants need to do a certain job on the network before they are allowed to write that information to the block. These tasks are usually solving an algorithm on a computer. The people who solve this algorithm are called miners. That work is called mining or coin mining.

Thus, the purpose of mining has an important meaning, directly participating in the operation of a blockchain. Without miners, the blockchain system would not work.

Is mining banned?

This answer depends on the country you live in.

However, this will also mean that if you are scammed in the process of investing or mining, the Vietnamese government will not guarantee or be responsible for you!

04 things to know before mining

Here are some characteristics you need to know before participating in mining:

  • Blockchains that use the Proof of Work (PoW) consensus mechanism all need to mine.
  • People who use their computing power are called miners.
  • Hashrate (hash function) is a unit that represents the ability of a mining device to solve algorithms. The higher the hashrate, the faster the algorithm is, the more coins are mined.
  • Some excavators can only optimally dig one (several) coins.

Forms of mining coins

There are currently the following forms of coin mining:

Free coin mining by phone

This is an extremely easy form of mining, you just need a phone connected to Wifi to be able to earn coins. Coins that can be mined by phone are usually popular coins like BTC, ETH, LTC.

A very interesting thing about this way is that most of the applications are games with time, so it can be said that you are both entertained and have money. But because it’s so easy and fun, the amount of money is not much.

Mining coins with miner

This is the most common form, known by many people through articles on the internet. The keywords about miners, “buffaloes”, even a few large and small FUDs in Crypto, etc. are all derived from mining with diggers.

This can be seen as a job that earns real money, but requires a large amount of capital, as well as will be influenced more or less by the government. Typically, China’s ban on BTC mining leads to miners having to move to other countries.

Using Cloud Mining services

When it comes to Cloud Mining, many of you will immediately think of cloud storage services today. And similarly, Cloud Mining is an action where you can participate in remote cryptocurrency mining, without the need for equipment or machines.

In this activity there will be two parties:

  • Mining service provider: They will provide remote mining or selling hashrate to buyers. Several parties are providing this service: Minergate, Hashing 24, Hashflare, Genesis Mining.
  • Service users (investors): They are investors. These users spend money to remotely rent/purchase these miners/hashrate. And they will receive the corresponding coin according to the contract.

If you are interested in this form of mining, you can refer to the details on how and some effective mining tips through the article below.

Learn: What is Cloud Mining? 03 notes when using Cloud Mining

What does a coin miner include?

A mining rig includes at least the following basic components: CPU, VGA, RAM, Hard Drive, Mainboard, Memory Chip, Power & Internet.

1. CPU (Central Processing Unit) or central processing unit whose sole task is to distribute to VGA graphics cards to excavators. So the CPU does not need to be so terrible because it only has the above single task. However, you should pay attention that choosing CPU and Mainboard must match each other.

2. VGA: This is the most important component of a mining rig. It has the task of directly participating in the mining of coins. The stronger the VGA, the better the mining ability. This is the component you need to pay attention to and upgrade the most.

Of course, VGA must also be suitable for mining certain coins. There are two VGA suppliers you may have heard of:

  • NVIDA: 1070, 1060, 1050ti,…
  • AMD: RX 470, RX 580, RX 570,…

In addition, you should definitely pay attention to optimizing coin mining. Pay attention to what type of memory chip is integrated in VGA and how much it can be overclocked.

For example, Micron’s GDDR5X can be overclocked to 700 MHz (Memory Clock), 100 MHz (Core Clock).

3. RAM: No need to invest huge RAM, just enough to combine with CPU, MainBoard runs some basic mining applications. 2G RAM is fine, just running basic windows is enough.

4. Hard drive: Similar to RAM and CPU, you do not need to invest much. For compactness, you should choose an SSD with 80G or 120G memory.

5. Mainboard: You do not need to invest in a terrible mainboard. However, you need to pay attention that it must be compatible with VGA & CPU to optimize mining. In addition, if you want to plug in multiple VGAs, choose the number of ports that can be connected.

6. Memory chip: Should pay attention to what type of memory chip is integrated in VGA, the ability to overclock to how much. In the VGA part, I made it clear.

7. Source: Source is also an important component in the whole mining rig. It is responsible for providing power for all other hardware to work. A good performance power supply will help your whole system run stably and have a long lifespan.

8. Internet: Of course, to dig coins, you need an internet connection. Requires a stable network. There is no need to install a huge network, because all mining is done on your hardware, not through the network continuously.

Just the basic hardware for you to build when participating in mining. However, there is another type of mining machine that I have not mentioned, which is specialized machines for mining coins. You just need to plug in the power, plug in the network and participate in digging.

For example, the Antminer S19 Pro, Antminer S17 Pro series of Bitmain.

Coin mining software

The most effective coin mining software

Some software that allows you to effectively mine coins are: CGMiner, MultiMiner, BFGMiner, BitMiner, Miner-Server, EasyMiner, AWESOME Miner.

Memory chip checker software

Help you check which company’s memory chip the VGA card is using, from which you will know how much to overclock accordingly.

Example: GPU – Z.

  • Software overclocking RAM, VGA.
  • This software allows overclocking RAM and VGA card. This allows to optimize the hardware for more efficient mining.

For example: MSI Afterburner,…

  • Ethermine: Used to check how many coins you have mined, for ETH.

  • TeamViewer: Option to install or not. This software will help you monitor and manage the machine remotely. If there are any problems, you can handle them.

How to calculate mining profit

First, you need to know where mining profits come from? As I explained above, miners when mining coins will have to perform two tasks: Confirm transactions and Create new blocks on the blockchain.

  • Khi hoàn thành xác nhận giao dịch, miner sẽ nhận được một phần coin từ Phí giao dịch (Transaction fees) mà những người thực hiện giao dịch trả cho thợ đào đó.
  • In addition, when a block is generated, that miner will also receive coins from it. This amount of coin is the motivation for daily miners to plug in and participate in mining.

To calculate mining profit, you visit specialized websites to calculate profit for mining machines such as WhatToMine or CryptoCompare.

Here I will use CryptoCompare to calculate mining profit: www.cryptocompare.com

Step 1: Select Top Lists ⇒ In the Other section, select Mining Calculator.

Step 2: Select the coin you want to mine and the specifications of the miner.

For example: I will mine ETH with Antminer G2 with the following parameters:

  • Mining Efficiency: 220 Mh/s ± 10%
  • Power Consumption: 1200W

Therefore, I will also fill in the corresponding information in the blank box and get the same results as the table on the right.

According to the results of calculating the profit of mining ETH with the above parameters, I will receive a profit (excluding electricity costs):

  • $17.23 per day.
  • $120.59 per week.
  • $516.83 per month.
  • $6,288.15 per year.

This number will be multiplied many times if you have a larger Hashing Power (more miners or more powerful mining machines). Some things you need to keep in mind when calculating mining profits:

  • Mining profit will be able to change over time as it depends on the number of coins mined and the value of that coin. If the coin increases in price, the mining profit also increases and vice versa.
  • The amount of coins mined also depends on the Diff (or difficulty) of the block. When the coin increases in price, the demand for mining will also increase, the Diff will increase and the amount of coins mined will decrease.

If you still have questions about the calculation of mining profits, for example: What if the power is lost while mining? How is the cost of mining coins calculated?… Please refer to the article below.

Reference: How to calculate mining profit & frequently asked questions

Should I mine junk coins?

First of all, you need to know, the “junk coins” I am talking about here are only coins that were born just for the purpose of FOMO, or have bad motives, scams, or simply, I am talking about unpopular coins or coins. unknown information.

Back to the question of whether to dig junk coins, in my opinion not for the following reasons:

  • Junk coins often do not have high liquidity, worse after mining, there are no, or very few exchanges that accept transactions.
  • Chances of getting scammed are very high.
  • Mining garbage is like BTC, it takes time, money, and effort. So why don’t you dig popular coins for sustainable profits, but dig risky coins?

But anyway, if you have adventure blood, you can still spend a little time and effort to earn a little more of these coins, because not all coins become worthless, but sometimes there are some very few real projects, but no one noticed. At this point, you can find “gold in the sand”.

What methods do attackers often use to take advantage of users’ computers to mine coins?

In the trend of cryptocurrencies being more and more accessible, hackers also create a lot of fake websites, applications, and software. If you are new, it is easy to click on these links.

The hacker will then be able to obtain emails or personal information, and then send emails containing malicious code. They infiltrate the CPU of the user’s computer, click on the attachments in the mail, and mine Bitcoins from the infected computer, or worse, steal the property.

Therefore, if you receive any suspicious emails, do not click, please quickly delete them to the trash.

04 effective mining experience

Identify sources of capital, goals

As I said, mining has many forms, so it is necessary to determine the source of capital and goals at the beginning to avoid waste.

If you want to make mining your main business, you need to invest a lot in equipment. But if you want to join as a side business, or find a job in your spare time, just a phone is enough.

Learn the market

To know which coin to dig, you need to spend some time researching the market, you will know the prestige and profit of each coin, thereby making a reasonable plan.

Besides, understanding the market also helps us to know other needs and ways of playing. Maybe mining is just paving the way, and we are suitable for other ways of playing?

Emotional control

It is difficult to say what is the right way to sell coins after mining, because the market is always fluctuating. Maybe after digging out, you sell right at the top, but there are also cases, you sell right at the bottom.

It is at these times that you need to control your emotions and come up with an appropriate profit-taking strategy. No matter which direction the market moves, make sure you don’t regret your profit taking.

Avoid scams

In a profitable market there will also be risks, the most common is probably sticking to the malicious code I mentioned above. So you need to be careful about security, avoid clicking on strange links.

Summary

The last article helped you understand what mining is, the overview of mining as well as what to prepare to mine. If you have any other questions, please leave a comment below to discuss with Idolmeta.net!

 

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