Among so many crypto alternatives, which one to select to mine taking into account the risks and capitalization values in the market?
After the popular and leading until now, Bitcoin, many other virtual currencies have been born.
Part of this great digital range is made up of Monero, Ether, Dash, Litecoin, DeepOnion, Dogecoin, Zcash, Ravencoin, Grin etc. The list goes on and therefore doubts may arise in this regard, since many are profitable to mine.
And as this profitability will be maintained for years to come, it is important that you prepare to know everything about mining and its types. In addition, we will show you what aspects to take into account to select the best cryptocurrency.
Mining cryptocurrencies and their functions
First of all, what is mining? Simple, a set of processes for validating the transactions of a cryptocurrency within the Blockchain.
As you already know, the way to mine will depend on the system used by the blockchain or algorithm of each cryptocurrency. You should know how each asset works, as they all have their own characteristics.Mining cryptocurrencies is a profitable activity that leads to a more secure and stable network, how to choose the most suitable cryptocurrency for mining? Click To Tweet
Mining cryptos basically serves two essential functions. We explain:
- Confirm or verify transactions on the ledger or blockchain to guarantee their validity. Each verification contributes to the stability, transparency and security of the network.
- Issue or extract new cryptocurrencies, product of the work of mining.
Get to know the most important features of Minar
Mining cryptocurrencies is a very lucrative activity that is worth knowing about. Since it has several very interesting features:
- There are two consensus systems depending on the type of virtual currency, the PoW or Proof of Work. The second is called PoS or Proof of Stake.
- Miners or nodes around the world validate transactions and organize blocks using complex mathematical processes.
- Mining requires powerful, high-performance specialized hardware for cryptocurrency mining.
- Miners are remunerated by validating transactions, in order to encourage their work, developing a more reliable and secure environment.
- This activity generates a great electricity demand, so some countries have restricted or banned mining.
Types of Cryptocurrency Mining
There are many ways to get cryptocurrencies, but mining offers 4 types to evaluate according to your needs and goals. See.
1. Mining with CPU
This kind of mining was used and very popular since the beginning of the activity. It works by using your computer’s processor and software to mine cryptocurrencies.
This system is convenient, although not very fast or sustainable over time. Due to the excessive use of a simple CPU, it is necessary to let it cool and added to this you have a high electrical expenditure.
It is also characterized by lower incomes. This method is still used for mining, but has a low return on investment.
2. Mining with ASIC
The most used way to mine by those lovers of technology and speed who want cryptocurrency mining.
These are special equipment with a high power platform, which have an “Integrated Circuit of Specific Applications” (ASIC).
There is some suspicion among members of the mining community who demand the prohibition of this machinery. The reason is that those with slower methods don’t have many opportunities in the face of this fast system.
3. Mining with GPUs
The GPU stands for “Graphics Processing Unit”, which offers high performance for mining. They have a graphics card,processor, motherboard and cooling system. This equipment represents a high investment.Minar con GPU consta de un equipo especial de alto rendimiento, generador de una alta demanda eléctrica. Click To Tweet
They can cost up to more than 3000 dollars; they generate great profitability, but also a high energy expenditure.
4. Mining in the cloud
Cloud Mining is a friendly process in which you avoid the purchase of expensive mining equipment and excessive electricity consumption. It’s about having a company do the work for you.
An expert ally that, equipped with a platform and through a commercial relationship, provides the operation service. In addition to maximizing your production,there are reliable and cost-effectiveoptions.
How to choose the right cryptocurrency to mine?
Now that you know the ways to mine,you should evaluate which type of cryptocurrency is the most suitable for you.
The most important thing is its profitability, since your efforts should not be in vain. Choose intelligently, but guided by these factors to take the right path.
In the crypto world there is great volatility in each asset. That is why it is important to understand that the cost of mining a cryptocurrency can be higher than the current market price.
An indispensable rule is that the cryptocurrency to choose to mine is of total legality in your country. In some regions, mining has restrictions and can lead to a problem.
Consider the electrical aspect, since the cheaper the energy, the greater the profit.
In addition to taking into account the price of electricity, it is essential to analyze the cost of special equipment for mining cryptocurrencies.
If you decide on a GPU system, you already know that you will have to spend thousands of dollars on hardware. If you opt for a cloud platform, the expense would be much lower and very efficient.
Mining cryptocurrencies is an activity that, in addition to generating profits, involves objective analysis. You must be clear about your goals to make a wise decision as to which method to use.
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