Crypto Mining 101: What is Cryptocurrency Mining and How to Get Started!
Crypto currency mining is a financial trend that everyone wishes to hop on, as it seems like the relevance of cryptocurrency on the modern market is only going to grow. Read this blog if you wish to know more about the process of crypto mining or are thinking of investing in a cryptomining rig and are looking for a perfect setup that will give you the desired return on investments.
What does crypto mining mean?
Crypto currency mining is the process through which additional amounts of cryptocurrency enter into circulation and find its owners. For mining to happen, a powerful personal computer solves a cryptographic mathematical equation and sends the data to the blockchain. The miner that performed the action is awarded cryptocurrency. The process is called mining as an analogy to the gold mining that allows new money to be discovered.
How does cryptocurrency mining work?
For mining to work, the computer has to solve the equation by verifying data blocks. The first miner to arrive at the solution and get a verified hash is the one rewarded with the cryptocurrency.
Mining cryptocurrency keeps the market running; therefore, the miners get paid to keep it running. The mathematical equation verified in the mining process is based on the previous transactions in the network. The miner acts as a person who puts the pieces of the puzzle together and announces the solution to everyone else in the network. All of the verified data blocks are interlinked into what essentially is blockchain technology.
The computer that does the guessing has to be powerful because the more guessing it does, the more likely it is to arrive at the right solution. Therefore, if you want to start a cryptocurrency rig, it is best to invest your money into a reliable system that would help you efficiently solve the equations required for mining.
How To Set Up a Crypto Mining Rig?
Interested in how to start mining? The setup for mining is basically an advanced personal computer, at least if we are talking about an individual rig. If you wish to know more about the setup of complex cryptocurrency data centers, you can read our article on the topic here.
Naturally, not every computer will sustain the demands for crypto mining because the computer has to come with a very powerful CPU or ASIC. Your regular cheap computer is not likely to do the best job for crypto mining, but a powerful gaming PC is a great place to start because it often has amazing GPU, CPU, and graphic cards, all of which are important elements of a cryptomining rig setup.
If you are thinking of mining, you will more likely invest in a brand new computer setup. One thing to prepare yourself for is that it is never going to be cheap. The good thing is that you can think strategically and use your budget wisely, investing more in the components of mining trig that are essential and saving finances on other components. Let's dive into the necessities of a crypto setup.
CPU vs. GPU vs. ASIC: The Essentials Of The Cryptocurrency Rig
First things first, there is a lot of confusion regarding these essential components of the rig, on whether they are interchangeable and which one you should choose. Let us clarify the confusion.
It should be noted immediately that the real choice for the crypto setup in 2021 is between GPU and ASIC because the regular CPU can no longer sustain the crypto mining in its current demanding state.
CPU
CPU is the central processing unique to a personal computer. Over a decade ago, it could easily sustain Bitcoin mining, but this has no longer been the case for years because the complexity of blockchain operations is growing exponentially. The CPU can no longer help you mine the most popular cryptocurrencies, such as Bitcoin, Litecoin, and Ethereum, and, frankly, nor can it help you with most of the cryptocurrency underdogs in the market. Since the CPU is no longer the critical component of a crypto setup, you may simply go with a good one without overspending on it.
GPU
GPU is a graphic processing unit of a personal computer that is in charge of digital rendering. It is similar to a CPU, but it is way more powerful and functional than the former. The GPU is fast and efficient and is currently a key element of the mining rig setup. It is suitable for most cryptocurrencies on the market, but the technical characteristics of different currencies vary, so it is best to choose the graphic unit that is most suitable for mining your specific currency of interest. While GPUs are now the gold standard of crypto mining, it is actually hard to predict whether they will remain as such because blockchain operations will continue getting more complicated.
ASIC
ASIC is an application-specific integrated circuit of a modern personal computer. It is a chip that is customized for a specific use and usually does not have a more general purpose. ASIC is the latest tendency on the cryptomarket that will likely overpower GPU because it is more powerful. You need to invest in ASIC if you are invested in the future of the cryptocurrency or if you are looking to mine the most complex and expensive cryptocurrencies, such as Litecoin or Bitcoin, even though the mining of these specific currencies might not be the best decision for an individual miner.
Other Components of A Mining Rig
- Motherboard: A key component of literally any PC, your motherboard is very important for your rig. Choose the one that goes best with your GPU or ASIC and the one that has an optimal graphic card layout for you.
- Storage Drive: A basic component. Choose based on reliability and the amount of data you will need to store.
- Graphic Cards: You will need to use multiple graphic cards that should be reliable, stable, and energy-efficient.
- PSU: PSU is a power supply unit that supplies power to your graphic cards. The number of graphic cards you use will determine the number of PSUs you will need. Choose good-quality ones, but the key is to not overspend.
Wire and Cable: This is an overlooked important component of a crypto setup. You will need high-quality, reliable system cable and power cables, such as PCIE GPU riser cables, CAT5E or CAT5, THHN/THHW, XHHW, tray cables, and many others. This blog will help you make an informed choice of wire and cable for crypto. If you are looking to buy reliable and durable cryptocables, we have a curated collection prepared for you at Nassau National Cable.
