Cryptocurrency mining will celebrate its 10th year of existence in 2019. It’s certainly no fad, but it’s also far from being a popular practice. The very concept of mining with high-end computer hardware is starting to trickle into mainstream consciousness, though. If anything, the evidence is in the scarcity of Nvidia and AMD graphics cards and the inflated pricing that has washed through retailers worldwide. The pricing has caught the attention of PC gamers, leaving them puzzled and asking why it’s happening.
What you may not know is the technology surrounding mining isn’t just limited to consumer graphics cards. We’re beginning to see PC game platforms that allow you to mine when you’re away from your system, and exchange that digital currency for new games. There are even new Pokemon GO-style games hitting the app stores that are outdoor scavenger hunts with cryptocurrency as the ultimate treasure.
With that in mind, it seemed like the perfect time to start explaining this craze (I’m going to call it that because it shows no signs of disappearing) to gamers and hardware junkies considering riding the wave. It’s admittedly going to be a challenge! As John Oliver recently exclaimed during HBO’s “Last Week Tonight,” cryptocurrency is: “everything you don’t understand about money combined with everything you don’t understand about computers!”
So I hope you’ll stick around for each new guide and explainer. Don’t hesitate to reach out via the social media links at the bottom of this article with questions or suggestions.
Should you decide to grab the knowledge and journey down the rabbit hole, I’ll be publishing guides for a variety of things like:
- What’s a mining pool and how do you choose the best one?
- What is NiceHash, and should you use it?
- Wallets vs Exchanges: How to safely store your cryptocurrency
- The risks of mining: profitability, power costs and GPU lifespans
- How to setup Awesome Miner + MiningPoolHub to mine the most profitable coins
- Mining with your graphics card versus your CPU
- Algorithms and coins: Choosing the best match for your hardware
- Using a stripped-down version of Linux called HiveOS for a dedicated mining rig
- TBD: Your suggestions here!
WHAT IS MINING, ANYWAY?
Bitcoin is making headlines in mainstream media on a daily basis, and deservedly so. It’s the grandaddy of all cryptocurrency and, with few exceptions, tends to dictate the profitability of all other alt coins beneath it. On a value-per-coin level, it’s worth far more than any other digital currency in existence — and there are more than 1000 of them. Stuff like Litecoin, Dogecoin, Electroneum, Ravencoin, Ethereum, and GRAFT.
I won’t delve too deeply into the history of Bitcoin or its hordes of both unique and flash-in-the-pan spinoffs, but I do want to point out that you can’t actually mine Bitcoin with regular computers anymore. It requires specialized and expensive hardware called ASICs. However, you can mine other coins and convert them to Bitcoin through a variety of exchanges and services. You can also earn Bitcoin by “lending” your computer’s processing power to services like NiceHash which pay out in Bitcoin. But that’s another rabbit hole for another time!
What is mining though? It’s somewhat misunderstood as the process of “finding coins” but it’s more complex than that.
Understanding The Blockchain
Each of the hundreds of crypto coins in existence rely on the core concept of the blockchain. Cryptocurrency was designed to be decentralized, secure and unalterable. So every single transaction is encrypted. Once that encrypted transaction happens it’s added to something called a “block” until a fixed number of transactions has been recorded. That block then gets added to a chain — the blockchain — which is publicly available.
These transactions leave no trace of who is behind them, however, because privacy is also a pillar of cryptocurrency. The location of the transactions isn’t centralized, either, so that it can’t be manipulated or controlled by one person or entity.
Since these blocks are heavily encrypted, they’re sort of like complicated math puzzles that only powerful compute-capable hardware can solve. Enter your CPU, or your Radeon and GeForce graphics cards. The process of solving the math puzzles on these blocks and adding them to the public blockchain (think of it as a ledger) is roughy what mining is.
Miners verify the transactions, ensure they aren’t false, and keep the infrastructure humming along.
The reward for doing so — a miner’s fee if you will — is payment in that block’s coin. The payment is based on how much their hardware contributed to solving that puzzle. Where do the coins come from? By design, that’s exactly how the coins are created. The block is solved and coins and distributed fairly to miners. This increases the coin’s supply.
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