Cryptocurrency Mining Types

Mining was rather simple to perform in 2009 since just a few people knew about bitcoins at that time. Besides, it costed less than a dollar, therefore just enthusiasts dared to mine it. It was possible to get a reward by new unit creation on average per day.

The price of bitcoin rose to hundred dollars by 2013 and the number of miners increased to such a degree it took months waiting for the reward. Then there appeared the first pools where the miners united to quickly create a block, sharing the reward proportionally between the participants. And then powerful ASICs, designed for efficient bitcoin mining, appeared.

Today, mining bitcoins at home has become unprofitable. However, there are also other cryptocurrencies that are still available for mining. Their mining principle is almost the same, that’s why it’s better to explore mining essence and determine the approach which can be followed while earning first coins.

Mining process

From a technical point of view, depending on the equipment, mining can be divided into 3 types:

1. GPU mining, i.e. mining using graphics cards.
2. CPU mining, i.e. mining using central processors.
3. ASIC mining, i.e. mining using application-specific integrated circuits that work on certain algorithms.

Based on the number of devices, mining can be called amateur to some extent, when there is a small number of graphics cards in the computer tower or just one rig. Rig is a frame with 6–10 graphics cards connected to one motherboard (with a cheap processor and a minimum RAM) through the risers and powered by 1-2 power supplies. Also, amateur miners include those who perform processor-based mining, sometimes without a discrete graphics card at all, although GPU mining capabilities are much higher than CPU.

Those involved in the mining process and those who don’t want to limit themselves to small earnings anymore, gradually increase the scale while collecting more rigs or buying ready-made ones, which already forms an entire farm. This is no longer amateur mining, but rather industrial mining. It becomes harder for such farmers to mine cryptocurrency within an apartment since in addition to other reasons cooling requires more space within industrial scale. In such a case they find suitable premises, which can be safely called the whole crypto mine.

The owners of many ASICs also belong to industrial crypto miners. Most of them move to China, where they accommodate in huge hangars located in the mountain provinces. Both equipment cooling as well as electricity cost which make it necessary for selecting a certain crypto mines location are rather important in this case.

Mining ways

Mining is divided into 3 types depending on its method:

1. Individual, or solo, mining. This is independent mining on your own equipment, without joining any pools. In this case, all the coins you’ve mined, as well as transaction fees belong to you as a deserved profit. Equipment power is important for individual mining since a large hashrate is required to ensure the computational complexity. Solo mining is beneficial for mining relatively fresh cryptocurrencies.
2. Collective mining in pools. A pool is a server combining the computational miners’ power. It is a common computing network, which is engaged in new blocks creation. The coins mined are divided among miners, according to their own share in the process. Pooling has become required due to the increasing network complexity of popular cryptocurrencies.
3. Cloud mining. Here, computing power is rented from a service that mines on an industrial scale. Miners no longer need to set up their own farms and maintain them. Instead, they pay for industrial capacity and mine on the equipment of a crypto mine, using it to obtain coins. Cloud mining makes it possible to participate in mining without large investments.

Each mining can be considered a passive income source to some extent, because a lot of effort is not required for this. It’s better to configure the process, providing continuity and efficiency, and get the coins earned. The main thing here is considering such important aspects as:

• Possible damage, which means it’s required to take care of a reliable warranty on the equipment
• Room cooling and farm noise reducing, if it operates at home
• Power supply stability as well as high-quality wiring.

To increase profitability, it is worth monitoring the prices of cryptocurrencies more often in order to switch to more promising coins in time.