Cryptocurrency is still one of the most vibrant and fascinating markets to get involved with. This looks likely to become even truer in the future, with many people pointing out that digital currency is set to go truly mainstream.
As crypto coins are starting to be accepted as valid forms of payment by more places and digital ways of paying for goods is also becoming the norm now, cryptocurrency could get even more attention as a result. This could well see more investors come into the sector and the whole picture get a lot bigger and more exciting as a result.
If you plan to get involved with digital currency soon, you may assume that buying coins is the only way to go about it. While this is the most popular way, you could also mine cryptocurrencies. Although it is not easy to learn, it is not impossible either.
The best bet is to learn what crypto mining is first and whether it is really worth the time you put into it. Whether you use this beginner’s intro or take a look at our guide below, it is the best first step.
Cryptocurrency Mining Explained
This type of mining involves no physical effort and is all done via computers. In crypto mining, you are simply using your computer set-up to verify other people’s crypto transactions and listing them in the publicly verified Blockchain for that currency. Once you have done this, you get rewarded with some of the digital currency in question to hold onto or sell.
While you can mine for coins alone, many people band together into mining pools. This can be a fairer way to go about it, as everyone in the pool will see some rewards from the joint effort involved. But how does it all work specifically? In short, you first need to have the right equipment in place – this means a high-powered computer mining rig to carry out the complex equations involved. As a result, most mining set-ups contain top-end graphics cards, fast internal CPU processors and specific ASIC units for mining.
Crypto Mining – The Pluses
The good news for any potential miners out there is that it does come with some big plus points. A major one is that you can end up with valuable cryptocurrency as a reward for your efforts. As long as you have kept your mining expenses in check, you should be able to sell this on for a decent profit. A look at Bitcoins run to the $20,000 mark in 2020 shows what type of money could be made, if you had mined for Bitcoins and then been able to sell the ones you earnt at this price.
Mining for digital currency can also come with smaller fees, compared to simply buying some coins through a broker. You will save on any deposit, transfer or trading fees which buying may incur for example. Mining for crypto also means that you can get involved easily with new coins, if major names like Bitcoin are dropping value or not available to buy. By having more choice of which coins to get involved with, miners have much more versatility when it comes to crypto investing.
Crypto mining – the downsides
Although there are lots of things which make mining worthwhile, there are a few downsides to consider. Firstly, the competition is pretty fierce now. You can easily find yourself struggling to make a profit when up against some of the top-level mining operations out there.
You should also be aware that the computer set-up you will need uses lots of power. This could be too expensive for you and see you struggling to make a profit. When you also add in the costs for cooling your rig, your expenses can soon mount up. Mining rigs are also very noisy and this could make it not worthwhile, if you will be living close to it.
Crypto mining is another option
There is no doubt that mining for cryptocurrency will cost money, take time, and not be easy to profit from. It is also true however to say that profits can be made and that it also comes with many plus points as well. Ultimately, whether to mine for coins rather than just buying them is a personal choice. It will all depend on if you wish to take on the effort and risk for the potential bigger rewards.