Cryptocurrency mining can be performed by anyone with access to the internet and suitable hardware, which potentially means that there are billions of dollars worth of coins out there in the world just waiting to be mined! However, not all cryptocurrencies are created equal – some are easier to mine than others and have different mining strategies associated with them. In this guide we will look at the most common cryptocurrencies and the best hardware to mine them with.
According to the equipment, there are three different forms of mining from a technological standpoint:
- GPU Mining, i.e. Mining Coins Using Graphics Cards.
The miners are responsible for the mining and the mining software is called “mining software”, “miner”, or simply “miners”. The mining software is needed to connect a computer to a blockchain and manage processing, in addition to paying all related costs.
- CPU Mining, i.e. Mining Coins Using Central Processors.
The miners are responsible for the mining and the mining software is called “miner” or “miners”. The mining software is needed to connect a computer to a blockchain and manage processing, in addition to paying all related costs.
- Asic Mining, i.e. Mining Using Application
The miners are responsible for the mining and the mining software is called “miner” or “miners”. The mining software is needed to connect a computer to a blockchain and manage processing, in addition to paying all related costs.
Ways to Mine Crypto
Depending on the process, mining is categorized into three categories:
- Individual, or Solo, Mining.
This type of mining entails mining using your own hardware and is usually done using the Bitcoin’s software program. This can be done with a complex system setup such as a GPU or by connecting to servers, but it usually means that you have to buy all the equipment. In addition, you will have to set up your own pool, verifying the transactions and hashing them with your CPU/GPU and then uploading them onto the blockchain.
- Collective Mining in Pools.
This type of mining involves mining using your own hardware but in cooperation with other miners, which means that the amount of profit is slightly smaller. In addition, the costs are made lower because it is not necessary to purchase all the necessary hardware.
This type of mining entails mining using an ASIC on a server somewhere else, which means that the amount of profit is higher and that you cannot see how much your bitcoins are worth after they are mined. The downside is that you do not have physical ownership of the mining equipment.
The biggest difference among the three is that individual miners must constantly maintain their equipment, while collective miners and cloud miners can be relatively passive in their maintenance, depending on which system they use for mining. For example, if a solo miner has a large number of ASIC rigs running on a cloud server and does not monitor them continuously, then it is still considered solo mining because the cloud miners have to pay for rent and electricity to keep the equipment operating.
However, if a cloud miner has the same number of ASIC rigs running on the cloud server but does not host it but instead rents it for mining, then it is considered collective mining.
- GPU Mining, i.e. Mining Coins Using Graphics Cards.
The biggest difference between this and CPU mining is that graphics cards tend to be more expensive than CPUs and are harder to find. The actual number of graphics cards that are out there and available is much lower, making it harder to mine. GPU mining is now replaced by asic mining (see below).
- CPU Mining, i.e. Mining Coins Using Central Processors.
The biggest difference between this and GPU mining is that CPUs use a small amount of electricity compared to GPUs, and they are very cheap. The actual number of CPU’s out there and available a virtually limitless, making it easier to find equipment to mine with CPUs rather than GPUs. CPU mining is now replaced by cloud mining (see below).
- Asic Mining, i.e. Mining Coins Using Application-Specific Integrated Circuits (ASICs)
Asic mining is the most recent form of mining and enables large scale mining with a single device. It enables a big miner to use cell phone chargers, power supplies and motherboards as processors and manage hardware through an application that connects to the local computer through an ethernet cable. Asic mining is only available for a few coins, like Bitcoin, Z-cash and Ethereum.
The biggest difference between this and CPU/GPU mining is that Asics are very expensive and faster at processing hashing algorithms compared to GPU/CPU. In addition, they can only mine one type of coin.
There are three main categories of hardware needed to perform cryptocurrency mining: CPUs, GPUs and ASICs. Mining on a CPU can be done by any computer, whereas GPU mining needs a graphics card. On the other hand, ASICs are necessary for CPU/GPU mining and can’t be used for anything else.
CPUs and GPUs differ from each other in terms of their expensive electricity consumption and possibilities to mine different altcoins. GPUs, also known as Graphic Processing Units, are dedicated chips that are built specifically to mine cryptocurrencies. The most famous examples of GPUs are the Radeon series, but many other manufacturers also produce GPUs.
A GPU is best utilized in a mining setup using an appropriate mining software. However, there are also some dedicated GPUs that can be used for cryptocurrency mining. For example, in late 2017, AMD released a special Radeon RX Vega line of dedicated graphics cards designed specifically for cryptocurrency mining.
CPUs are much less powerful than GPUs and generally not suitable for GPU to mine altcoins. Instead, they are often used to mine Bitcoins. The advantage of using CPUs to mine cryptocurrencies is that they could be owned by anyone with a computer as well as a small electricity bill. However, there is one website dedicated to CPUs for mining cryptocurrency, called Minergate.
Final Thoughts on Different Types of Crypto Mining
There are a variety of ways to mine cryptocurrency. Each method has its own advantages and disadvantages, and each requires different skillsets. From solo mining with your own hardware to cloud mining with shared resources, it is important to understand the pros and cons of each approach before making an investment.
BitminerFactory is brought to life by Darrell Houghton, our astute publisher. With a deep-rooted passion for crypto and crypto mining spanning many years, Darrell’s unwavering enthusiasm fuels his daily quest for knowledge. He is eager to share the pivotal news stories of the day while also providing his own analysis and commentary with Bitminer Factory’s readers.
