This post is for people who want to start generating cryptocurrency through mining. I have found that mining is a relatively safe way to generate cryptocoins without taking too much risk (compared to trading, for example).
Starting from the beginning
Fintech (finance and technology) or Finance 2.0 is defined as the technology that helps to carry out legal acts related to money on a efficiently, simply and safely way at reasonable costs. These are some of Fintech applications:
- Operational tools and means of payment (local and international transfer of funds)
- Personal and business finance management (bank accounts, capital management)
- Financial and investment advice (crypto-currency mining)
- Cryptocurrencies (Bitcoin, Ether, Litecoin, Ripple, Monero, Dash, Steem, etc.)
- Security and identification of persons
- Customer knowledge through 'big data'
Finance 2.0 is transforming the financial and economic paradigm for both people and business, demonstrating that there is another way to manage money. Its strength rely on faster, safer and cheaper solutions.
What is cryptocurrency?
Cryptocurrencies are based on a consensual computer network that creates a new global payment system and fully digital global currencies. It is a decentralized peer-to-peer (P2P) network driven by its users without a central authority or intermediaries (central banks, governments, traditional banking system). From the user's point of view, cryptocoins are the money to be used on the Internet and in real life as well!
Talking about Bitcoin (BTC), which is the oldest cryptocurrency, is the first implementation of a concept known as "cryptographic currency", first described in 1998, which proposed the idea of a new type of money that uses cryptography (advanced encryption techniques) for control its creation and transactions, rather than a centralized authority (central bank). The first specification of the Bitcoin protocol and proof of concept was published by Satoshi Nakamoto (his real identity is a mystery to this day) in 2009.
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What is cryptocurrency mining?
Cryptocurrency mining is a productive process in which economic resources are invested in computational capacity in order to validate and process real time cryptocurrency transactions and to guarantee the security of the network. This processing capacity is usually measured in MH/s, GH/s or TH/s.
The miner receives a "reward" or a "bounty" (profitability) for his participation in the cryptocurrency computer network through his contribution of data processing capacity, necessary for the payment network to operate safely. Mining will continue to be required until the last cryptocurrency has been issued. In the case of BTC, on May 7, 2140, according to information I found on the Internet.
How does mining work?
Anyone can become a miner through an investment in computer skills (data processing capacity). The mining computer infrastructure is involved in the validation, processing and confirmation of the transactions of the cryptocurrency network. Such transactions are very complex to calculate and process as they are based on an encrypted mathematical algorithm, therefore, personal computers are not in the capacity to carry out this process efficiently, so it requires specialized hardware and software to carry out mining without setbacks and in the most efficient way.
Image credits by weusecoins.com
How do I become a miner?
To start mining it is necessary to make an investment in the purchase or rental of computer equipment of a certain data processing capacity measured in MH/s, GH/s or TH/s which works in the mining process generating profitability. By the way, you can do in-house or cloud-based mining. Currently, I prefer the second alternative, since I do not have advanced computer skills.
From now on, I will focus on cloud mining exclusively.
What are the expenses?
Flat fee ($0.00028 to $0.00035 per GH/s/day) to cover operational costs (energy, security, personnel, etc.) of the mining data center. This usually applies for Bitcoin (SHA256 and/or Scrypt). Mining of other cryptocurrencies, such as ETH, ETC, LTC or DASH does not generate charges. The maintenance fee are deducted from the daily payout, its value is defined by each mining farm, by the way.
What's the expected annual return?
The expected annual return is > 60 %. Which depends mainly on the currency being mined, its exchange rate and the mining difficulty established by the algorithm that governs each cryptocurrency.
How do I get the payouts?
Profits from cryptocurrency mining are paid on a daily basis (usually if greater than BTC 0.001) in your virtual wallet. The generated profits can be reinvested in mining or be withdrawn through a Visa or MasterCard debit card issued for these purposes.
Digital wallets I recommend
- Bitpay - a debit card for purchases or withdrawals can be requested
- Criptopay - a debit card for purchases or withdrawals can be requested
- Exodus - handles various blockchain assets
- Blockchain Bitcoin Wallet
- Jaxx (stores several types of cryptocoins)
- Mycelium
Cloud mining farms I recommend
- Genesis Mining - Iceland based mining farm, this is the world's biggest one. Using this code M4cqp1 you get 3 % off your hashpower purchase.
- Hashflare - Estonian based mining farm, they are working on a P2P bank called Polybius Bank as well. Using this code A577E63F you get a 10 % bonus of your hashpower purchase.
- Hashing24 - Scotland based mining farm, they are owned by BitFury, one of the biggest mining hardware makers.
All of these are reliable, I'm using all of them right now, the payments are timely and the performance is good.
I think was better to be brief in honor of each person's time. I hope this quick cryptocurrency mining guide has served its purpose, serve as an introduction to this fascinating world.
I would love to hear your comments, I will respond them as soon as possible.