Cryptocurrency mining is - generally speaking – finding new blocks and connecting them to the already existing chain (so-called blockchain). The word "mining" refers to gold mining. A block is a place of storing information about all new transactions and space of generating new coins. To find a new block, you need to solve the so-called cryptographic problem, which in the case of Bitcoin is based on the double hash function, SHA-256. It's about finding a string of characters, i.e. hash, that fulfils the corresponding equation. Because the cryptocurrency protocol is open sourced, you can check which problem is solved at any given time. The "starting" data are the transactions and the previous block's hashes. Miners, who find a solution, announce it on the network, and the nodes, participating in the process, check its validity. If they accept the solution, the new block is considered to be used. The person responsible for it receives a certain number of coins.
Therefore, it can be said that mining cryptocurrency is nothing more than carrying out and implementing complicated mathematical calculations. The most popular methods of mining are Proof of Work and Proof of Stake.What is the Proof of Stake method?In this case, the mining of virtual tokens is not about solving mathematical equations and depends on the number of coins kept on the crypto wallet. This algorithm determines, which miner will confirm the transaction and receive a commission from it. The algorithm's decision depends on many factors, including the number of coins in the wallet. Simply speaking - the more coins a person has, the greater the chance of making a profit from mining. You don't have to buy the right equipment to start mining with the Proof of Stake method. All you need is a laptop or a personal computer. It is necessary to install the full wallet on your hard disk (which has the blockchain on it - every transaction from the beginning of the given coin is saved in this blockchain). Then it needs to be synchronized with all the data, which - due to the huge size (several dozen gigabytes of data) can take up to several days.
How does the Proof of Work method work?In this case, the mining of coins involves the implementation of appropriate mathematical calculations, using devices called mining machines. A personal computer or even a graphics card can play the role of a mining machine. The efficiency of these machines is measured in hashes per second (H / sec). Mining machines are built based on a set of graphics cards (and therefore graphics processors) or dedicated ASICs.
Bitcoin mining - is it profitable?The answer isn't simple. Before you buy a mining machine, try to assess the profitability. The price of the machine and electricity costs (which can be higher than the profits) are the basic factors that should be determining your decisions.
The most popular mining machinesThe choice of the most popular mining machines depends on many factors. Effectivity (high hashrate), efficiency or price - these are the features, which should describe a good and efficient crypto mining machine.
The strongest mining machines:Antminer R4 - considered by many users to be one of the best bitcoin diggers for people working at home. Its hashrate (mixing frequency ratio) is 8.6 TH / s, which can be considered an extremely good result in this price category (the value of such equipment is around $1 000). Avalon 6 - even though this mining machine doesn't achieve such fantastic results as the most famous models (hashrate 3.50 TH / s), it's characterized by high efficiency and a relatively low price. It costs about $550. The fact that it works quite quietly is also a big advantage. It is therefore ideal for people who are involved in mining Bitcoins for a hobby. Antminer S9 - a mining machine, which is supposed to meet the requirements of even the most demanding investors, focused on a large return of investment. It allows the miner to achieve a hashrate of 14 TH / s, with relatively high performance. This is the reason for the excellent results. The price of this mining machine, however, is quite high and is around $3 000. Dragonmint 16T - is considered to be the most powerful machine of its kind on the market (for hobbyist miners). Due to its efficiency, it achieves impressive results, but its price is relatively high. Dragonmint 16T costs around $2 700.
The decision shouldn't be made hastily. The cryptocurrency mining isn't always profitable. The costs of mining machines and electricity are the main factors to be considered.