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August 21, 2018

What you Should Know About Mining the Top 7 Cryptocurrencies

cryptocurrency mining blockchain

Sections:

  1. A bit about Bitcoin (BTC)
  2. The silver to Bitcoin, Ethereum (ETH)
  3. What is cryptocurrency mining?
  4. So, how does Cloud Mining work?
  5. Building your crypto assets through Remote Mining
  6. DIY Mining Rig: mining Bitcoin, Ethereum and other altcoins
  7. What you need know mining Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Bitcoin Cash (BCH), Litecoin (LTC), Monero and DASH?
  8. Risks associated with cryptocurrency mining
  9. Trading cryptocurrency instead…
  10. Storing your cryptocurrency

Every country has its own fiat currency. For example, South Africa has the South African Rand (ZAR), while the United States has the US Dollar (USD). Fiat currencies are generally exchanged at banks for investment purposes and worldwide transactions. In today’s Digital Age, money can be transacted through online banking via the internet.

The financial sector, therefore, drifted from visiting banking institutions towards simply sending and receiving money from beneficiaries online. The development of the world’s first cryptocurrency, Bitcoin (BTC), along with the cryptocurrency industry’s most popular altcoins – Ethereum, Ripple, Bitcoin Cash, Litecoin, Monero and Dash – was bound to streamline this global process.

Today, the blockchain is the world’s most secure system for transactions. Each cryptocurrency transaction is recorded in the blockchain’s public ledger. Using ‘cryptography’ software, the blockchain is able to provide secure and verifiable transactions. Using mathematical algorithms, cryptography secures and authenticates every transaction on the blockchain.

But, the main question lies in the “best way to make money in cryptocurrency”. Many believe this can be done by mining cryptocurrency. Though cryptocurrency mining has its perks and quirks. Coindirect delves into what you should know about mining the cryptocurrency industry’s top coins on the cryptocurrency price charts.


A bit about Bitcoin (BTC)

Bitcoin serves as the ‘digital gold’ standard among all alternative cryptocurrencies – predominantly known as ‘altcoins’. Unknown inventor of Bitcoin, Satoshi Nakamoto, developed Bitcoin as an electronic peer-to-peer cash system without a central entity. Bitcoin is, therefore, decentralized to avoid third-party interference from central banks or authoritative groups who control money supplies. 

bitcoin btc

Each Bitcoin transaction is recorded in a public ledger called the ‘blockchain’. The blockchain uses a secure system, called ‘cryptography’, to provide secure and verifiable transactions. Using mathematical algorithms, cryptography secures and authenticates every transaction on the blockchain.

2013 was a favourable year for Bitcoin as the cryptocurrency started to gain high traction around the world. This led to rapid Bitcoin price surges, which resulted in a massive growth in Bitcoin value. In 2010, the price of 1 Bitcoin increased by 1000%; rising from $0.008 to $0.08 for 1 BTC. By the end of 2013, the value of Bitcoin digital coins ranged from $650 to $800.

The past 5 years saw Bitcoin grow by more than 66,723.41%. In 2016, its value soared to nearly $800 and by the end of 2017, the price of Bitcoin surged pass the $8,000 mark, sitting at $8,200. Today, BTC holds a market cap of $111,878,063,497.


The silver to Bitcoin, Ethereum (ETH)

ethereum eth

Second to the digital gold, Ethereum was co-founded and released by Vitalik Buterin in 2015.

Ethereum is an open-source platform which introduced the concept of smart contracts to the crypto space. Soon after its launch, the silver to Bitcoin quickly climbed to the 2nd highest market share on the market cap. In 2016, the value of Ethereum was $10 with a market capitalization of more than $1-Billion. Today, ETH holds a market cap of$30,396,043,850.

For years, mining cryptocurrency was regarded as a safe and accessible way to increase crypto buyers’ return on investment.


What is cryptocurrency mining?

Cryptocurrency mining has proven to be a lucrative way of increasing the value of one’s digital assets. However, cryptocurrency mining doesn’t come low-priced.

Mining cryptocurrency requires specialized, powerful computing equipment and software to solve complex algorithms to compete with other peers on the network. Miners, therefore, attempt to solve a block using cryptographic functions. The first to crack the complex equation would be eligible to get a rewarded for generating a new block on the blockchain. This can be done through 3 processes:

  1. Cloud mining
  2. Remote mining
  3. Mining Rig


So, how does Cloud Mining work?

Many describe the cloud mining software as “user-friendly” and “intuitive”. But, mining Bitcoin at home has become extremely unprofitable. Taking into account the difficulty of this, cloud mining was developed.

Cloud mining is, essentially, the process of using hardware power to mine cryptocurrency. The best part about cryptocurrency cloud mining is that cryptocurrency buyers can mine cryptocurrency without the need for a large investment in mining hardware or technical knowledge. 

cryptocurrency cloud mining

When it comes to cloud mining, cryptocurrency miners buy a part of the hardware’s mining power owned by a mining service provider. Here, the service provider controls all hardware configuration, maintenance, and the selecting of the most efficient mining pools.


Building your crypto assets through Remote Mining

Remote hosting is recommended for highly experienced miners who prefer control over their mining hardware. Similar to cloud mining, the hardware is hosted in a remote data-centre, and the miner controls its setup and configuration.

remote cryptocurrency mining

Of course, the cryptocurrency mining company requires a fee for maintenance and electricity usage. In this way, the miner can also control any risks associated with the maintenance kit and hardware shipment.

With remote mining, a community of miners may come together to combine their computers in an aim to increase their crypto profitability and income stability. This is also known as a ‘mining pool’.


DIY Mining Rig: mining Bitcoin, Ethereum and other altcoins

The world’s first decentralized cryptocurrencies, Bitcoin and Ethereum, are also the world’s most popular cryptocurrencies mined. However, new altcoins are constantly being added to the blockchain and cryptocurrency market price charts.

cryptocurrency mining rig

Since December 2017, Bitcoin and many altcoins such as Ripple, Bitcoin Cash, Litecoin, Monero and Dash have experienced cryptocurrency price surges. For this reason, mining continually had a magnetic draw on for investors interested in cryptocurrency.

If you’re considering building your own mining rig, a complete mining kit consists of graphics cards, a processor, power supply, memory, cabling and a fan.


What you need know mining Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Bitcoin Cash (BCH), Litecoin (LTC), Monero and DASH?

With cryptocurrency mining comes investment and maintenance fees, as well as expensive equipment and processing power required to solve complex mathematical equations on the blockchain.

  1. Bitcoin (BTC) Mining
    bitcoin miningDeveloped as an open-source software, mining Bitcoin using consumer-level hardware will return minimal to no BTC profits. This is why most Bitcoin miners prefer to invest in cloud mining services such as Hashflare. Cloud mining services generally have stores of mining rigs with the highest quality of mining power required to build up a crypto reserve. Though, investment costs are high and returning a profit can be a slow process.
  2. Ethereum (ETH) Mining
    ethereu
    Ethereum was developed as a decentralised platform that runs on smart contracts. With many investors joining the crypto mining game and the difficulty level on solving equations enhancing, many have started using. ETH is the second biggest cryptocurrency after Bitcoin. It’s, therefore, no surprise that it will net you the second biggest gains.
  3. Ripple (XRP) Mining
    ripple miningRipple is an open-source, XRP ledger with a currency exchange, real-time gross settlement system (RTGS) and remittance network. Unlike Bitcoin and other cryptocurrencies, Ripple mining is not possible. The only individuals who can generate XRP are the ones who actually created it.
  4. Bitcoin Cash (BCH) Mining
    bitcoin cash mining
    Bitcoin Cash, a hard fork of Bitcoin Classic, increases the size of blocks to allow for the processing of more transactions. Many miners are burning Bitcoin cash to drive up the value. In the Bitcoin Cash network, the reward currently stands at 12.5 BCH per block. That’s if you have a powerful BCH mining rig. Mining BCH can be profitable if you invest in an ASIC miner – a specialised computer built strictly for the purpose of mining. One of the best ASIC miners is the ‘Antminer S9’, which holds a hash rate of 12.93 TH/s and power consumption of 1375W +- 7%.
  5. Litecoin (LTC) Mining
    litecoin mining
    Litecoin is built on a peer-to-peer network and enables instant transactions to anyone around the world at nearly 0% fees.
 Litecoin was developed with the idea to be mined using your average CPU. However, LTC was also optimized for efficient cryptocurrency mining with GPUs. The Litecoin currency is not supported by ASIC hardware. This makes Litecoin perfect for first time cryptocurrency miners.
  6. Monero (XMR) Mining
    monero mining
    Monero is an open-source digital currency that essentially focuses on fungibility and decentralization. There is no agreement about what hardware works best for mining Monero. However, Monero uses a proof-of-work (PoW) called ‘CryptoNight’. This is designed for making mining with generic computer hardware, seamless. The mining algorithm lowers the performance gap between GPUs (graphics cards) and CPUs (regular computer processors), making ASICs an unnecessary expense and lowering the barrier to entry.

The best way to mine Monero is to, therefore, buy a few affordable, quality CPUs and stack them together.
  7. Dash (DASH) Mining
    dash mining
    Dash is an open source peer-to-peer cryptocurrency that allows for instant and private transactions, as well as a self-funded, self-governed organizational structure. Dash is mined using specially designed, Dash-competent ASICs. CPU and GPU mining is not cost effective for Dash, due to its slow mining results.


Risks associated with cryptocurrency mining

Many attacks – scams and hackings – on the cryptocurrency sphere has caused many investors to question whether or not they should continue mining their digital assets. However, with cryptocurrency being decentralised, the volatility of the cryptocurrency industry should come to no surprise. It’s a risk that users of crypto and the blockchain knowingly take. That’s why it is important to do your research before investing money.

There have been many cryptocurrency exchange hacking over the last few months. Nonetheless, cryptocurrency mining has its risks too:

  • Dishonest mining pool organizers: dishonest administrators of your mining pool could steal coins from your profits, or simply take everything and close the mining pool.
  • Cryptocurrency mining hackers: if a hacker gets into your cryptocurrency mining pool, the hacker could empty your cryptocurrency wallet.
  • High electricity mining costs: if you compare the electrical costs required for mining crypto or the cost of the mining hardware to the amount of profit you make at the end of the day, investing in cryptocurrency mining may not be worth it.
  • Drop in cryptocurrency values: a plummet in the cryptocurrency market will, respectively, cause a drop in the amount of BTC or altcoin values you hold.
  • Broken cryptocurrency wallet: your BTC and altcoin mining investments can be lost if your wallet hard drives breaks.

Factoring in these mining risks, Coindirect has launched a safe and convenient way for users to diversify their cryptocurrency portfolio – Coindirect Exchange.


Trading cryptocurrency instead…

Cryptocurrency can be traded in real time against other digital currencies on cryptocurrency exchanges like Coindirect. Coindirect lets users deposit fiat currency directly from their local bank account including bank transfers, PayPal, TransferWise, supported fiat deposits and M-Pesa. Credit card payments are coming soon.

Bitcoin and altcoin holders can securely profit from crypto by trading 15 different ETH, USDT, XRP, LTC, DASH, BCH and BTC trading pairs in countries like the United Kingdom, Canada, Australia, New Zealand, Singapore, Saudi Arabia, Malaysia, India, Pakistan, United Arab Emirates, South Africa, Nigeria, Kenya Ghana and many more to sell their coins directly to buyers in their country.

cryptocurrency trading pairs

The Coindirect Exchange includes 15 different ETH, USDT, XRP, LTC, DASH, BCH and BTC trading pairs.

You already have access to our integrated exchange with 50% off trading fees until the end of October 2018 (0.1% on crypto to crypto trades and 0.4% on fiat to crypto trades).


Alternatively, the Coindirect
peer-to-peer marketplace allows its users to buy and sell crypto directly from and to local buyers and sellers at 0% fees, without having to convert.

peer-to-peer marketplace

The Coindirect Peer-To-Peer Marketplace includes Bitcoin and over 40 altcoins, including ERC-20 coins.

Of course, should you profit from cryptocurrency trading or mining, you would need to store your Bitcoin and altcoin values somewhere…


Storing your cryptocurrency

Buying Bitcoin or altcoins are, of course, an important first step in investing in cryptocurrency; the second being storing one’s digital assets for safe-keeping.

Bitcoin and altcoin wallets can be used to store, buy, sell send and receive cryptocurrencies from across the world using a cryptocurrency wallet address – even if you are offline. Your cryptocurrency wallet address is similar to an email address. People will send cryptocoins to the digital coin wallet address you provide them with. Think of it as a bank account without any third-party control.

Coindirect provides secure access to an online cryptocurrency wallet that supports Bitcoin and over 40 altcoins including ERC-20 coins with cold storage and two-factor authentication (2FA) for triple protection.

cryptocurrency wallet

The Coindirect Wallet supports Bitcoin and over 40 altcoins, including ERC-20 coins.

After testing out the Coindirect platform, Coin Insider further confirms that users trading on the Coindirect cryptocurrency exchange will further receive their own online wallet for their personal use.

 

Start by setting up a cryptocurrency wallet with Coindirect and invest in Bitcoin and over 40 different altcoins to choose from. Access our integrated platform and #OwnTheFuture with Coindirect.

Disclaimer: This article should not be taken as financial advice. Never invest what you can’t afford to lose as the cryptocurrency market is volatile. Always research as much as possible before buying any coin.