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 Bitcoin rate 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, then sharing the reward proportionally between the participants. Then there have been created powerful ASICs intended to efficiently mine Bitcoin. Now it’s unprofitable to mine bitcoins at home. But there are also other cryptocurrencies, which mining is available to everyone. Their mining principle is almost the same, that’s why it’s better to explore mining essence as well as determine the approach which can be followed while earning first coins.

mining types

Mining process

Mining can be divided into 3 types depending on the equipment from the technical point of view:

  1. GPU mining, i.e. video cards-based mining.
  2. CPU mining, i.e. processor-based mining.
  3. ASIC-based mining on special equipment intended to mine cryptocurrencies that work on certain algorithms.

It’s possible to call mining amateur to some extent, based on the devices number, when there is a small number of video cards in the system unit or one rig. A rig is a frame with several video cards (usually 6-8 pieces) connected to one motherboard (with a cheap processor and a minimum RAM) through the risers and powered by 1-2 power supplies. Besides amateur miners include those who perform processor-based mining, sometimes without a discrete video 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) hereby forming the whole farm. This is rather industrial mining than amateur. 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 mining or solo mining. This is an independent own equipment-based mining, which doesn’t require collective participation in the 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 hash rate 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 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 you rent the computing power from a service that mines itself on an industrial scale in contradistinction to the previous two mining methods which use their own equipment. In this case, you no longer need to start your own farms and maintain them. It is enough for you to pay for someone else’s power and mine some industrial crypto mine equipment while getting the coins mined. Cloud mining makes it possible to join the production without large investments.

cryptocurrency mining

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.

It is worthwhile to follow the cryptocurrency rate more often for increasing profitability in order to switch to more promising coins in time.

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