Cryptocurrencies are definitely here to stay. Developed countries such as Sweden, where the government’s regulatory and supervisory body of the Swedish Financial Supervisory Authority, has legitimized the fast-growing industry by publicly proclaiming Bitcoin and other digital currencies as a means of payment.
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And on a par with Sweden, you can mention Denmark, a country in which the government does not charge taxes for the trading or mining of cryptocurrencies.
That’s why, whether you’re a newbie to the world of cryptocurrencies or have long since invested in these digital assets, chances are you’ve ever heard of cryptocurrency mining.
Today we will tell you the basics about blockchain mining and tell you exactly how to find the best cryptocurrency to mine.
And true to our convictions, we will not tell you a single coin to mine, as we believe in the importance of diversifying.
Digital currencies saw breakneck growth in 2017, and people around the world began exploring different ways to benefit from this young and thriving industry. Naturally, the first wave of cryptocurrency enthusiasts opted for speculation as a mechanism to make money. However, the enormous volatility of this market left many of them empty-handed.
Others chose to get into cryptocurrency mining. In other words, add new blocks to the chain and be rewarded with digital currencies.
Of course, adding blocks is not a simple process. And while your LEGO skills won’t help you, the information you’re about to read will. Are you ready?
Buy Mining EquipmentWhat is cryptocurrency mining
To understand the mining process, and find out which is the best currency to mine, it is important that you are clear about some basic concepts about cryptocurrencies. Digital currencies rely on cryptography to secure transactions and also control the creation of new cryptocurrency units.
Cryptocurrencies run on different blockchains: public distributed ledgers programmed to record virtually everything that has value, including financial transactions. Each transaction is a piece of data stored in a particular blockchain block.
Cryptocurrencies are created through the mining process. The process involves miners solving complex computational problems to release blocks, and then being rewarded with new coins.
Instead of a financial institution making sure transactions are legitimate, miners, people running mining software, do this work.
Mining is not a constant activity. In addition, there is a limited amount of digital currencies that can be mined. For example, the total supply of Bitcoin consists of 21 million units. Once the last Bitcoin BTC is mined, no more coins will be added to the system. This logic not only applies to Bitcoin, but to most cryptocurrencies that use a Proof of work (PoW) consensus algorithm.
During the bear market of the year 2018, mining became less and less profitable for individual miners. Even for large companies, such as Bitmain, one of the biggest names in crypto mining, it fired 50% of its workforce at the time.
That year, mining activity operated below the profitability threshold, but fortunately the 2019 price recovery helped some miners stay in the game.
Finding the best coin to mine will not be an easy task. Will it be Bitcoin? Maybe Litecoin?
The cryptocurrency market is very volatile, so it is vital to keep a close eye on market fluctuations, as well as other factors that influence the profitability of mining. What makes a cryptocurrency profitable
There are many factors that come into play when determining whether a cryptocurrency is worth mining. Here are some of the factors you should consider when determining the profitability of the currency you are looking to mine: Cryptocurrency price
The price of the coin is the main component that determines the profitability of the mining process. If the value of the coin is high, you can expect more profits from the rewards and therefore easily cover mining expenses such as hardware investment and electricity costs.
However, if the cryptocurrency is in a bearish position, you may find yourself in a difficult situation. Half reward
From time to time, cryptocurrencies that rely on PoW halve their block reward to moderate inflation and increase their long-term valuations.
For example, the last Bitcoin Halving occurred in May 2020 reduced the mining reward from 12.5 BTC to 6.25 BTC. And while that could translate into a higher Bitcoin price later on, it also makes life difficult for miners. Block generation
The creation of new blocks is done using mining nodes according to the Waves-NG protocol and the FPoS algorithm. In simple terms, the more blocks that are generated, the greater your chances of getting a block reward. Increase in the number of miners
The number of miners has increased dramatically in recent years, and this makes it extremely difficult to mine profitable coins. It might be a good idea to step away from those cryptocurrencies full of big players and focus on niche opportunities. Mining Hardware
Your mining equipment also plays an essential role when looking for lucrative mining options. If you plan to invest in a Bitcoin Miner ASIC hardware, you’ll need a few thousand euros to get started. And since computers can get quite hot, you should consider a thermally regulated environment with low-cost electricity. Factors affecting mining profitability
Different types of mining
There are several ways to mine cryptocurrencies. For each method, the mining process is a little different. Here are the main ways to mine coins:GPU mining
GPU mining is the most popular method of cryptocurrency mining. It is effective, cheap and offers an excellent speed rate, because it is based on the use of ASICs, application-specific integrated circuits, which are essentially mining machines.
Join the Cardaniers community, we will help you get good results in your investments in Cryptocurrencies:
You will receive in your email training so that you learn to operate in Cryptocurrencies and increase your profits. We will share with you the most relevant news in the crypto world so that you can make investment decisions judiciously. We will share with you our own investments so that you can replicate them and achieve the same results as us. >>>CLICK HERE TO JOIN.
CPU Mining
