Bitcoin: How to Make Money by Mining Cryptocurrencies
Bitcoin, Ethereum, Ripple and hundreds more: cryptocurrencies are becoming increasingly popular. Inspiring once mistrust or mockery, they now arouse curiosity and interest. One of the peculiarities of cryptocurrency is mining, a process that allows anyone to participate in the creation of these crypto-currencies and recover some in exchange. But what exactly are cryptocurrencies? What is mining and how to do it? Is it a profitable operation to mine Bitcoin? can you make money mining cryptocurrency? So many questions we will answer.
What is a cryptocurrency?
A cryptocurrency is an electronic money that is exchanged via a decentralized, secure, peer-to-peer computer network that is not subject to any central authority. This network operates autonomously thanks to an open source software whose security of exchanges is guaranteed by blockchain technology. All information and transactions are therefore stored and verified in a moving database present on a network of interconnected servers and computers.
This is a virtual cryptocurrency mining profitability that, as its name indicates, is encrypted. That is to say that only its owner can make use of it because it holds the code, which can take various forms, but generally that of a personal information. The best-known cryptocurrency is bitcoin mining, can you make money mining altcoins which is credited to Elon Musk, the boss of Tesla. But there are many others, such as Ethereum, Litecoin, Ripple … Each has defined a maximum amount of currency to put into circulation. For example, there will never be more than 21 million Bitcoins in circulation.
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How to mine cryptocurrencies? is bitcoin mining profitable?
Mining is a process of securing transactions in a block that completes the blockchain. Encryption is performed by very complex mathematical calculations performed by miners’ computers. The latter are thus essential to the mechanism of cryptocurrencies and help secure the currency they contribute to create.
To easily explain what is the mining of a cryptocurrency, the security expert Andreas M. Antonopoulos does the anology with sudoku. “To describe the mining, we could use the example of a huge sudoku contest where participants start a new grid as soon as someone finds a solution. It would be easy enough to check that a completed grid is full. But it will take a lot of work to finish it! Best cryptocurrency mining hardware. The puzzles to solve in the bitcoin network are based on cryptographic hashes and have the same characteristics as these sudoku grids: they are very difficult to solve but it is very easy to verify that a solution is good , and their difficulty can be adjusted “.
As an individual wishing to undermine a cryptocurrency , it is better to join a community to join forces. Because unless you have a very large amount to invest, the mining will be too difficult to achieve alone. This community will provide you with software. Once installed, just let the sofware and let your computer run.
Once a block is completed, the benefit is shared among the community members in proportion to the power of calculations they have provided. Currently, 12.5 bitcoins per block are distributed, more than 110,000 euros at the current rate (1 December 2017). Understand that you only touch yourself a tiny part of the amount, to the extent of what you have contributed. This may ultimately represent less than one euro cent.
Make money by mining Bitcoin (or another cryptocurrency), can you make money mining bitcoin?
But beware, the mining may look attractive on paper, but is not for everyone and many precautions are to take. First, it requires a significant material investment. Your computer must be extremely powerful to provide enough computing power to get paid.
It is the processor and the graphics card that are put to the test. It is even advisable to use specific computer hardware for mining to hope to produce a rather interesting yield. The price range is of course very wide, a computer dedicated to mining can be assembled for less than 1000 euros but will pale face computers with a six-figure price.
Make money by undermining cryptocurrencies, difficult for individuals
Then, we must think that the energy consumption of such an activity is absolutely phenomenal. Beware of the electricity bill so. If you are a tenant and you pay rent with charges included, do not expect to get away with it cheaply, your landlord will truly hallucinate by seeing the amount on the bill and there is no chance that you will do not have to pay the bill. Power consumption is really an important factor, we insist on this because it is often relegated to the background while it is essential. According to New Scientist, bitcoin mining consumes about as much energy as Ecuador over a year.
The profitability of the cryptocurrency mining in question,
As you understand, mining costs a lot of money in equipment and electricity. You absolutely can not be sure that it will be profitable for you and it is better to think twice before starting. Those who can get by are people with a significant source of natural energy they produce themselves (solar, wind, geothermal, hydraulic), but very few individuals are concerned.
In fact, many miners are losing money today, a situation they accept because they think the loss will be offset by the increase in the value of cryptocurrency over time. In any case, it is strongly discouraged to start now in the mining of Bitcoin or Ethereum if you are particular because their value is already very high. Instead, we have to bet on promising cryptocurrencies that have not yet taken off. Generally, debates take place within communities to identify what cryptocurrency is worthwhile on the moment.
Finally, it appears that cryptocurrency mining is a risky business, even when joining a community. It requires a huge investment in computer equipment and electricity to generate more than a few cents, and the return on investment is not assured. If you decide to try your luck, it is better to target cryptocurrency still unknown and just waiting to grow.
How to make money mining cryptocurrency 2018?
If you believe that the value of a cryptocurrency may increase, it may be better to buy foreign currency directly than to use a mining method if you are an individual. Currently, profits are generated by very large networks or companies that have specialized in mining, with initial investments of up to hundreds of thousands or millions of euros.
Less risky alternatives: getting others to work for you
It should be noted that other solutions exist. Energy rental or computation rental are types of subscriptions taken from mining plants. Subscriber money is used to invest in improving the cost/benefit ratio, by lowering power consumption or increasing the rate of mining. Productivity increases and you get a larger share of revenue, while the cost of your subscription stays the same throughout the term of the contract. Cryptonomos offers this kind of services.
Another interesting initiative is that of Unity Ingot, which is a kind of wallet of cryptocurrencies. By buying from Unity Ingot, your funds are used to finance the mining of various promising cryptocurrencies. A portion is also used for the purchase of Bitcoins, deemed to be a cryptocurrency trust. If the value of the cryptocurrency mined and in which it has been invested increases, the value of Unity Ingot also rises.
This can be a good solution because you do not have to deal with almost nothing and the investment is spread between several cryptocurrencies to limit the risks: if a fall, the others can compensate. If you think that the general ecosystem of cryptocurrencies is solid, Unity Ingot seems so interesting. To learn more, you can consult our folder dedicated to buying and investing in Bitcoin.