How to mine cryptocurrencies: What you need to know

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How to mine cryptocurrencies: What you need to know

Post by theDarkGoatisBAAAAD » Fri May 18, 2018 12:19 pm

So you want to try your hand at minting crypto tokens.

If you’re in this for the profits, stop right now. Unless you’re willing to risk a lot of money and swim with the big fish, you need to first resign yourself to the possibility that you might not even make back what you paid for your mining hardware.

Why would you want to mine then? That’s a question you’ll have to answer for yourself. Perhaps you want to gain a better understanding of how mining works—there is no better way than by doing. Or maybe you feel buying a GPU miner is a lower risk entry into cryptocurrencies than simply dropping the $4,000 to $7,000 on tokens—you can always sell the graphics cards if everything goes to zero.

Mining and hashes
“Mining” in the context of cryptocurrencies usually refers to offering your computer resources to help verify transactions in a distributed ledger.

In a system based on a proof-of-work algorithm like Bitcoin, Ethereum, and Zcash, computers solve difficult mathematical problems designed to require them to guess answers until they find the right one.

This is usually through a hashing function of some kind, with the algorithm specifying what solutions should look like to be valid. The speed with which your mining rig is able to calculate solutions is therefore often measured in hashes per second.

SI unit prefixes like kilo (k) and mega (M) are used for faster speeds, so kH/s is a thousand solutions per second, and MH/s is a million solutions per second.

Different distributed ledgers may use the same hashing algorithm. Ethereum and Ethereum classic use Ethash, while Zcash and Bitcoin Private use Equihash. ... urrencies/

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