What Is Cryptocurrency Mining?
Ever wonder how cryptocurrencies such as Bitcoin are created? Creating a digital currency is a lot more puzzling when compared to physical cash. Fiat currencies are regulated and operated by a central authority responsible for issuing or destroying bank printed notes.
Since cryptocurrencies cannot be printed like fiat currencies, there is a digital network where the cryptocurrency can be ‘mined’ in order to bring new crypto coins into circulation. This guide will take you through the basics of what is cryptocurrency mining, why it is crucial, and how you can invest in cryptocurrency with or without mining them.
What is crypto mining, and why is it done?
On the basis of how does cryptocurrency work are crypto halving and crypto mining. The latter is done through specialized computers that allow miners to bring new coins into circulation. It is the backbone of cryptocurrencies as miners ensure the transactions made on the cryptocurrency network are legitimate and secure from any sort of attacks or dysfunction.
How exactly do miners do this? Well, to mine a Bitcoin, you have to use your computer to solve a complex series of algorithms. Once a crypto coin is mined, it is added to the blockchain, and the miner is rewarded with a coin. However, the process is extremely time consuming and consumes a lot of electric power as well. Though, it is essential in order to preserve the integrity of the decentralized blockchain.
The more the currency is being mined, the more secure it will be. Crypto miners play a primary role in making a cryptocurrency network safe from attacks or alterations. The only way someone can reverse a Bitcoin transaction is by having 51% of the entire network’s hash power. Albeit, as the hash power is spread out amongst miners worldwide, the cryptocurrency remains secure.
The primary purposes of cryptocurrency mining
- Bringing new crypto coins into circulation
- Recording or confirming transactions of each crypto coin that is mined
- Securing the crypto network
An important thing to keep in mind is that crypto mining is not the only way to obtain cryptocurrencies. Here at Zeply, we allow users to instantly purchase, sell, and secure Bitcoins with 0% cryptocurrency transaction fees. If you’re interested in cryptocurrency trading, purchasing them through a legitimate source, such as our Zeply app, could be a smoother and more accessible option for you.
How to mine cryptocurrency
Mining crypto coins is an exhausting process that demands time and a whole lot of computing energy. To put things in perspective, the carbon footprint of Bitcoin mining is said to be equal to a large South American country. Miners use specialized computers that are built and designed to mine Bitcoins considering the amount of energy they require.
It is possible for someone who wants to mine Bitcoins to do so through their computer or laptop, but it may not be profitable. Instead, you might actually end up wasting electricity and making little to no money at all. However, if you’re invested enough to purchase a specialized Bitcoin mining computer paired with the right software and hardware, you could join a mining pool and make significant profits.
In case you’re wondering what a mining pool is, it’s a group of miners that combine their computational powers to speed up the mining process. Once the group is able to mine a crypto coin, they divide the rewards amongst each other. The benefit of joining a mining group is that the likelihood of mining Bitcoins and gaining faster rewards is much higher compared to mining as a sole individual.
Is mining the fastest way to get cryptocurrencies?
How fast you can obtain a crypto coin through mining depends on how much computational power you’re investing towards it. For instance, as a solo miner, it may take much longer to mine a cryptocurrency when compared to mining in warehouses and mining pools.
In case you’re wondering what mining warehouses are, they’re massive ‘hashing centres’ where tons of specialized computers are set up to mine crypto coins. These warehouses depend on computing facilities featuring high-density hardware, low-reliability electrical infrastructure and off-the-shelf enclosures. They’re often built in old warehouses.
The truth is that the fastest way to get your hands on crypto coins is not through mining. Instead, you can simply purchase crypto coins through a crypto exchange.
Here at Zeply, we allow users to easily buy, sell, and even store Bitcoins securely in crypto wallet using a single crypto app and account. Our website is designed in a user-friendly manner and aims towards providing the essential tools and guidance needed to make your Bitcoin trading journey as smooth as possible.
If you want to buy cryptocurrency, our crypto exchange lets you use traditional currency to get it. You can even buy crypto with credit card, and we are working to let you buy crypto with PayPal soon.
Is crypto mining profitable?
Primarily it’s important to understand that there are multiple variables to consider when mining a cryptocurrency. For someone who’s a beginner, it might be better to simply purchase crypto coins instead.
For instance, let’s take Bitcoin as an example. Mining a Bitcoin requires specialized hardware, specific software, and a lot of electricity. If you decide to purchase the necessary equipment and tools to mine Bitcoins, you’ll have to make sure that you mine enough Bitcoins to cover your ongoing costs and previous expenses.
Factors that make mining profitable
The three factors that make mining profitable for miners are cheap electricity, low cost yet efficient mining hardware, and a good mining pool.
Suppose you’re considering investing in Bitcoins through a crypto exchange rather than mining Bitcoins and bearing the expenses that tag along with it. In that case, we’re happy to offer our services as a user-friendly crypto exchange.
What makes Zeply an excellent place to buy, sell, and store Bitcoins is that we don’t have any transaction fees. Secondly, we offer secure storage for your Bitcoins. And lastly, we aim to provide our users with valuable insights to make the most out of their crypto trading or investing journey through live crypto charts and the latest crypto news.
Final thoughts on crypto mining
Crypto mining plays a primary role in the stability and security of cryptocurrencies. However, the process is not as simple as it sounds. To mine Bitcoins as a solo miner, you should be prepared for the time, effort, and electricity costs that tag along with it.
Yes, you can always join a mining pool or invest in great specialized hardware to increase your chances of profiting from Bitcoins. Albeit as a beginner, the easiest and safest way to purchase and secure Bitcoin would be through a renowned crypto exchange.
Being a secure and user-friendly crypto exchange, our aim at Zeply is to make Bitcoin transactions as easy and straightforward as possible. We take pride in our website and services that are designed while keeping our user’s needs and convenience in mind.
Crypto Mining FAQ
Whether or not Bitcoin mining is worth it depends on several factors. Firstly, the hash rate depicts how hard it would be to mine a Bitcoin. A higher hash rate means it’s more difficult to mine Bitcoin because there are either larger sums of miners or fewer miners that are highly efficient. This means that the reward on mining you’ll receive will be less. Similarly, it also depends on how much you’re willing to invest in mining and whether or not you can afford the costs and expenses that go into it.
The span in which a Bitcoin is mined remains steady at 10 minutes. This is regardless of how many miners are working towards mining Bitcoins. So far the power used to mine a single Bitcoin is also set at 72,000 GW (or 72 Terawatts) on the average power usage that is provided by ASIC miners. However the time taken for a solo miner to mine a Bitcoin differs greatly when compared to the time taken by a mining pool or warehouse. The more computational power a miner puts towards mining a Bitcoin, the faster he can achieve his mining goal.
Being a decentralized currency makes Bitcoin’s concept a threat to the dominance of fiat currencies and governmental control. However Bitcoin transactions cannot be completely illegalized as the transactions cannot be tracked. While people can view the transactions on Bitcoin being made, it isn’t possible to track where the transaction was made from and who made it.
However, some places have made mining cryptocurrencies illegal. Luckily, there aren’t many laws illegalizing it in major countries including the UK and US. The easier way to get your hands on cryptocurrencies without mining them is through crypto-exchanges.
One of the easiest cryptocurrency to mine is Vertcoin. The coin uses a Lyra2RE proof-of-work algorithm to verify transactions and release coins. However it’s best to focus on cryptocurrencies that are relatively more common and have a greater chance of making you profits. Investing in the wrong crypto currency would be like gathering gold dust rather than gold nuggets, meaning the value difference is massive.