Mining


As you're reading the content of this page please consider pressing the start button in the box below. This will us a small amount of your computer, phone or tablets processing power to mine Monero on behalf of Portsmouth Crypto.

Loading...


Contents:


What is Cryptocurrency mining?


Mining is the process of verifying and validating transactions on a cryptocurrency network. Computers work to solve a problem and once a solution is found it is combined with a hash of all the transactions in a given period and added to what is known as the blockchain. Once the computer which generated the correct solution shares that solution with all the other computers mining on the network is is agreed and the public ledger is updated accordingly.

The cryptocurrency network rewards the computer which generated the verification with new blocks of cryptocurrency. It is this reward mechanism which incentivises people to connect their computers to the network and provide sufficient computing power to prevent any opne party taking control of the network. Newly minted or "mined" coins can be held, exchanged or sold at the miners discretion, thus limiting the supply of new coins to a given market.

In short, mining is proividing computing power for verification of transactions and network security, rewarded with new coin and transaction fees.


A brief history of Cryptocurrency mining


In the beginning there were only a handful of people running the bitcoin software. The ran it on standard home PCs and the software only required the use of their CPU to run. Over time, as the network grew and people sought to gain as many bitcoins as they could, software was developed which enabled people to make use of their GPUs. This lead to a higher hashrate and a greater chance of gaining a block reward. As more people began to GPU mine it became apparent that it would be better to mine as part of a group, where anyone in that group who succesfully mines a block would then share that reward with other participants based upon the amount of work they'd contributed.

Once pools began to be used it became harder and harder to mine solo. It also increased the risk of a pool of miners gaining 51% of the network hashrate though the driving force behind many of these early miners was to create and build the network, so 51% attacks were avoided by people choosing to mine at other pools, rebalancing the network.

Eventually FPGAs were developed which provided more hashing power at a lower cost than GPUs and it became harder and harder to mine Bitcoin with a GPU and all but pointless with a CPU. The network hashrate increased and the amount of computing power required to take control of the network increased dramatically, but not nearly as quickly as they were going to.

In january 2013 Avalon became the first manafacturer to bring ASICs (Application Specific Integrated Circuit)to market. This changed the game for ever. Suddenly there was no point mining with CPUs or even GPUs. FPGAs didn't last long as the market began to be flooded by ASICs from various companies.

The rest is history. Mining pools have risen and fallen. Companies have come and gone. For a long time Bitmain have been the dominant force in cryptocurrency ASIC mining, though in recent history a new company, partnering with Samsung, have begun to produce chips which threaten Bitmains loing term dominance of the market.



How to mine Bitcoin


To mine Bitcoin you're going to need three things: A wallet to store your coin. A pool to mine at. A device capable of generating enough hashes with a small enough power draw that it's not a total waste of your time.

The wallet you choose depends on your needs and what you're comfortable with. You can mine straight to an offline paper wallet, or one of our BitStashers Laser Etched Metal Wallets, for true security. The most common method is to choose a mobile wallet. Desktop wallets also exist which are worth using, though it is highly recommended that you avoid using online wallets where you don't control your private keys.

Your choice of pool is your own and since they rise and fall, to avoid having to update this page regularly, I'm going to suggest that you simply use Google search to find which pools are avilable and what hashrate they have on them. This will determine the frequency of blocks found and your share of the payout. In theory, over a long enough time span, with no other factors considered, you'll earn the same at a small pool which finds fewer blocks as you will at a larger pool which finds multiple blocks per day. Keep in mind the need for preventing pools aqcuiring near 51% of the network hashrate. If you see a pool getting close choose another pool and sacrifice the more frequent block rewards for fewer but with a larger pay out, for the strength and security of the network.

There are many various ASICs available to mine Bitcoin with new ones hitting the market frequently. When buying one you will need to consider whether you will run it at home or in a data centre, near home or, as many miners do, abroad. You will also need to consider at what point you will sell your mined Bitcoin to cover your electricity or hosting costs. Many factors affect what returns you get from mining, how ever it should be noted that participation in the network adds to its decentralisation and therefore its power and value.


How to mine other crypto currencies


There are many different cryptocurrencies which use a variety of different algorythms to provide their proof of work. Litecoin was an early fork from the Bitcoin codebase which used Scrypt as opposed to Bitcoins SHA256 algo. Eventually, when it became worth while, ASICs were produced for Scrypt as well, making it unprofitable to mine with a GPU. Several more ASICs have been produced in recent times to run on various algos, including X11, CryptoNight and others.

Sometimes, when an ASIC is produced, a development team and community may choose to fork their coin to a different algo to avoid the ASIC issue which can lead to centralisation of blockchains. It is a widely held belief in the cryptocurrency community that people should be able to mine with standard (or slightly modified) home equipment, on GPUs, to avoid centralisation and monopolisation of a given network, or the power behind mining overall.

To mine cryptocurrencies that rely on CPUs or GPUs you will need software suited to the task. One of the easiest ways to get started is to use the software provided by Nicehash, a longstanding company who act as middlemen between those who want to buy hashing power, to support the blockchain of their choice, and those who wish to sell computing power in return for payment in Bitcoin.

If there is a specific coin you wish to mine you will need software that is suited to the coins algo, and a pool to mine at. Google searches will yeild the results best suited to your equipment and preferences.

Some people choose to build "mining rigs" to mine greater amounts of crypto and these are computers with multiple GPUs running at once. I founded Orion Rigs in March 2018 in response to growing demand for dedicated mining equipment. We provide not just the rig itself, but education packages suited to introducing people to mining, hosting options and, eventually, pools to mine at. Having mined on and off with a variety of equipment, for a variety of coins, on a variety of mining pools, and in partnership with a friend who has done the same, we offer a service which is the full package for anyone considering involving themselves in Cryptocurrency mining in the Hampshire, West Sussex and wider South of England area, though we're also happy to work with customers where ever they are.



Pools


There are a large number of pools where you can mine various cryptocurrencies and they come and go as time moves on. For this reason alone, and as will be explained below, you cna't just set a miner running and forget about it. You need to be aware of the state of the pool you're mining at and where possible have failsafes in place for your miner to switch to in the event your chosen pool goes offline, which again can happen for a variety of reasons including maintenence, server outages or DDoS attacks.

A simple Google search with the name of your coin of choice and "mining pool" "mining software" etc will get you all the information that you need.

At this time, and with no promises made by myself with regard to performance now or in the future, multipool.us is one of the longerst running pools avilable though they only cater to SHA256, Scrypt & X11 algos now and so are no use for GPU mining. Nicehash is a quick easy option for mining with a GPU and avoids the need to find a pool but isn't specifically pool mining in its own right.


What do you mean mining isn't a free meal ticket????


It should be noted that mining is not a set and forget, get rich quick way to make free money. Its profitability depends upon a number of factors and any of these factors can and do change frequently. Anyone claiming to be able to guarentee specific returns in fiat currency on mining equipment or hosted mining packages either doesn't understand mining or is being dishonest, so beware.

Mining is a fun activity and the rewards for supporting the various crypto networks can produce profits which, from time to time, might shock you. It is worth investing in though you'll only get the most out when you understand what you're investing in.

Please don't let the uncertainty of minings returns dissuade you from participating though. Although as in all investments, should you choose to buy equipment specifically for the purpose, there is an element of risk, the security of these fledgling cryptocurrency networks is greatly improved by the increase in the number of participants. You're not just being rewarded in newly mined coins when you mine, you're helping build a decentralised future and are therefore part of a movement, something new and exciting which is going to change the way society functions.