Tag: Mining coin

Cryptocurrency is a market that brings a lot of profit to its participants. There are many forms of participation in the cryptocurrency market, among which, coin mining is one of the forms chosen by many people because of its simplicity and profitability. In the article below, ecoinomic.io will explain what coin mining is and something surrounding coin mining.

What is coin mining?

Coin mining is about leveraging the power of mining machines to solve the complex algorithms of a coin. This is the process by which miners must simultaneously confirm transactions on the blockchain system and create new blocks to add to the blockchain. During mining, miners will confirm transaction information such as the number of coins, the send/receive time, and the incoming/outgoing addresses between users. After that, the above information is put into a block. When the block is full, a new block will be created.

What is coin mining for?

Mining plays an important role when directly involved in the operation of the blockchain. A blockchain would not work without miners. To take it easy, let’s review how blockchain works:

• The blockchain system consists of transactions made and transaction information recorded into each block.
• To be able to record transaction information, blockchain requires a common consensus mechanism.
• Some blockchains use a Proof-of-Work (PoW) consensus mechanism. This means that network participants must perform a certain job to be allowed to record transaction information into the block. Commonly, this work is to solve an algorithm on a computer. The people who solve this algorithm are miners. This algorithmic work is called mining.

Forms of coin mining

Free mining by phone

This is the simplest form of mining but is not popular. Mining applications on the phone are mostly games. Therefore, participants who mine coins on their phones can both be entertained and have extra income. However, precisely because of its simplicity and benefits, the amount of money earned from coin mining on the phone is usually not much.

Mining with miners

This is the most popular form of mining and is chosen by many people and considered work that makes money. However, it requires participants to have large capital as well as the sector that is less affected by government regulations on cryptocurrencies.

For example, China bans its people from mining BTC. Therefore, Chinese miners have to move to another country to continue mining BTC.

Popular coins such as BTC, ETH, or LTC cannot be mined with a phone, but require specialized and expensive hardware equipment.

After The Merge Ethereum event, miners could no longer mine ETH with miners because the Ethereum blockchain no longer runs on the PoW consensus mechanism, the new coin was born based on the PoS mechanism.

Using Cloud Mining Services

Similar to today’s cloud storage services, Cloud mining is a service that helps miners to mine remotely without the need for complex equipment or machines. Mining activities through Cloud mining include 2 parties:

• Service provider: Provides miners and sells hash rates remotely to buyers. Currently, some cloud mining service providers on the market can be mentioned as Minergate, Hashing 24, Hashflare, Genesis Mining …
• Service users: are investors who spend money to rent or buy mining equipment or hash rate remotely and receive the corresponding amount of coins according to the contract.

Structure of coin mining machines

A basic miner must have the following components: CPU, VGA, RAM, Hard Drive, Mainboard, memory chip, power, and the Internet.

1. CPU: this is responsible for distributing VGA graphics processing cards for miners.
2. VGA: this is the most important part of the miner and is directly involved in mining. The more powerful the VGA, the better the ability to mine coins.
3. RAM: RAM for mining does not need to be too large, just enough to combine with CPU, and Mainboard, and run some basic mining applications.
4. Hard drive: needn’t invest much, investors can use an SSD hard drive, with 80 or 120G memory.
5. Mainboard: Mainboard also does not require a huge investment, however, it needs to have maximum compatibility with VGA and CPU for mining to be most effective.
6. Memory chip: the memory chip also needs to be compatible with VGA, the important factor when choosing a memory chip is to see how much overclocking capacity it has.
7. Power: this is an important component of an excavator, which is responsible for powering other hardware to work. The quality of the source directly affects the stability and longevity of the miner.
8. Internet: The Internet does not need to be too terrible, as long as the network is stable.

See also: What to Mine without ETH?

How to calculate coin mining profit

Upon completion of the transaction confirmation, the miner will receive a portion of the coin from the transaction fees of the person making the transaction. Besides, when a block is created, miners also receive rewards depending on each network. This is the main mining motivation of miners.

There are several dedicated websites to calculate mining profits, such as WhatToMine or CryptoCompare.

In fact, coin mining returns will change over time as it depends on the number of coins mined and the value of that coin. If the value of the coin increases, the profit also increases.

Besides, mining difficulty is also the main factor affecting the profitability when mining coins. As the network has more miners involved in validating transactions, the mining difficulty will also increase to ensure the rewards for each block are identical. The increased mining difficulty reduces the speed of mining, causing miners’ profits to decline.

Conclusion

In the Mining coin section in the News category, Ecoinomic.io provides the latest information on mining activities, and cryptocurrency mining companies.

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