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Unless you’ve been living under a digital rock, you’ve probably heard of
cryptocurrencies like Bitcoin and Ether, and the blockchain technology that makes them possible. You might even have dabbled a little yourself and come across the practice of ‘mining’ for these currencies. Here we take a look at what crypto mining is, how it works, and even how you can get in on the action.
What’s in a name?
Crypto, like its more commonly used cousin ‘cryptic’ (as in those particularly tricky crossword puzzles) refers to something that is written in code. During World War II, cryptography involved the use of ciphers and tools like the famous
Enigma machine. In the digital age, information is encrypted slightly differently, but the principle is essentially the same.
Blockchain
The arrival of blockchain technology – in which a single document or ledger containing every single transaction is reproduced over a whole network of computers – meant that encrypted information could now be used to stand as currency. (
Blockchain technology is much more than just an accounting system, but for the purposes of this article we’ll be focusing on its use by cryptocurrencies.)
Instead of a bank or other body keeping track of who holds x amount of money at a given time, everyone on the blockchain could do so for themselves with that shared ledger. And because cryptocurrency works off of a digital signature rather than tracing back to an individual, this meant payments could now be made and received completely anonymously, and across country borders, with ease.
But where do Bitcoin, Litecoin, Ethereum, Ripple and other cryptocurrencies actually come from? How is their value created in the first place? That’s where crypto mining comes in.
What is crypto mining?
Essentially, cryptocurrencies are ‘mined’ by solving complex mathematical problems. Find the answer to complete the ‘block’ or help to verify transactions on the blockchain and add those transactions to the public ledger, and you may be rewarded with a certain number of newly-created coins in return. As with a real-world gold rush, you might get results through time and persistence, or just happen to strike it lucky.
With an established cryptocurrency like Bitcoin, which has a finite number of available coins, those problems have now become so difficult to solve that you need a huge amount of computing power to mine them. As a result, most mining is now done by vast dedicated servers, in China in particular. In the early days when the problems were less complex, it was possible for miners to use their home computers and some simple software to mine Bitcoin, and specialized mining ‘rigs’ are still available for those set on pursuing the dream. Mining for Bitcoin has become prohibitively expensive for the average individual, especially because it now takes vast amounts of energy to keep all those machines and cooling fans whirring – one of the biggest criticisms of the currency at the moment.
Can I still get in on the action?
Although it’s still very difficult for individuals to compete with the large industrialized Bitcoin miners, many still choose to pool their resources in mining pools – splitting any profits they may make.
More importantly, though – Bitcoin is
by no means the only cryptocurrency out there. It might be the one that made the blockchain famous, but it’s also had its fair share of problems – the difficulty of mining new coins being but one of them. Many alternative cryptocurrencies – or ‘altcoins’ – make their way onto the stage each year, promising to deliver a more equitable and efficient platform. Those that prove themselves to be well-designed attract interest, people buy into them, and as a result, their value starts to grow. Here are some of the most interesting for someone wanting to mine crypto at home, courtesy of
Tech Brain:
Monero
Regarded as one of the most advanced anonymous digital currencies,
Monero is actually designed to make it hard for industrial scale mining to work well, so it essentially favors the little guy. Based on a proof-of-work algorithm called CryptoNight, it’s relatively painless to mine Monero on your PC at home simply by installing the relevant software.
Vertcoin
Like Monero,
Vertcoin is resistant to mining hardware used by large cryptocurrency mining operations. You choose the mining pool that best fits your computing power, input the hardware you are using (CPU or GPU) and get to work with their one-click graphical user interface (GUI). Note however that Vertcoin currently only supports AMD and NVIDIA graphics cards.
You may like to read,
What is 256 Bit Encryption in Cryptography?
SHA-256 (Secure Hash Algorithm): Detailed Study
5 Best Cryptography Tools Online
Ways to Encrypt Data - [AES, DES, RSA, ECC Encryption]
Dogecoin
Inspired by the popular meme,
mining for Dogecoin is best accomplished by joining a mining pool, as faster search capacity will make finding and confirming new blocks more likely – but you can go it alone. You’ll need to download the official Dogecoin desktop wallet and choose the mining software best suited to your computing power.
While you don’t need any peripherals or rigs to mine these coins, investing in some extra fans to keep your PC cool and a graphics card to speed up computing will give you an edge. Other than that, time, patience and a little luck are all you’ll need!
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