You may have heard that it is possible to mine cryptocurrencies. Mining is a process of offering resources to a cryptocurrency network in exchange for a reward. Each network requires different types of resources and can offer different rewards based on network rules. For example, Bitcoin and Ethereum networks use computational resources from miners. This effort requires very powerful energy intensive graphic processors (GPU) to compete for recurring rewards. Other mining projects such as PKT Cash can be mined using bandwidth and a computer processor (CPU), such as a computer, server or mobile phone. While mining requires some technological understanding, it is not as complex as it may seem. Here are the steps to mine cryptocurrency so even as a beginner, you can quickly get started and begin earning.
Invest in a Cryptocurrency Mining Setup
In order to competitively mine cryptocurrency, you will need a powerful computer. Different cryptocurrencies require different equipment to be successful. In general, the more powerful the equipment, the higher the yields. Therefore, the first step is to invest into the best valued equipment for competitive mining.
Bitcoin and Ethereum require powerful GPU equipment to be profitable. There are a lot of resources available to determine the best equipment for mining Bitcoin and Ethereum, such as hardware providers like Bitmain and Canaan.
If you are operating powerful GPU or CPU mining equipment, it is important to invest in heat and noise control equipment. Powerful mining machines generate a lot of heat. Proper ventilation and efficient fans are crucial for keeping the hardware cooled and avoiding overheating or wasted energy costs. Soundproofing equipment can also help reduce fan noise.
When mining bandwidth, purchasing a PKT Cube is an easy option instead of building and managing computer hardware. This plug-and-play device makes it easy to monetize your unused internet bandwidth and earn PKT every 60 seconds. The PKT Cube is whisper quiet and comes with turnkey, pre-installed software called PkteerOS that simplifies the process.
Installing Your Mining Software
The next step is installing an operating system and crypto mining software. The specific software required depends on the particular cryptocurrency you want to mine. For example, when mining Bitcoin or Ethereum, there are several free and paid options available, including CGMiner, BFGMiner, MultiMiner and Awesome Miner. Additionally, apps like BetterHash and CudoMiner can make the process even easier.
When mining PKT, the PacketCrypt mining software is free. Simply follow the instructions on the PKT website to install the software on your CPU device.
An alternative option to earn cryptocurrency is to sell idle resources by cloud mining. With cloud mining, miners borrow mining equipment from platforms that offer the service, such as Genesis Mining. Therefore, the miners do not have to buy expensive mining equipment or worry about maintenance and software installation.
Installing a Cryptocurrency Wallet
Miners need a cryptocurrency wallet to receive mining rewards. A wallet can either be a physical device, such as a hardware wallet, or a software installed wallet. When choosing a wallet, it is important to ensure the wallet is compatible with the cryptocurrency you are mining. Some wallets are specifically designed to store certain cryptocurrencies and may not be compatible with other coins.
When installing a wallet, it is crucial to save your private key. A private key is a secret passphrase that unlocks your wallet. Anyone who gets access to your private key will have access to your cryptocurrency, so it is important to keep this in a safe place that will also be accessible when you need it, such as in a safe or other private location.
PKT requires a specific wallet for mining bandwidth. The PKT wallet can be found here; however, the PKT Electrum wallet cannot be used for mining.
How to Choose a Mining Pool and Start Mining
Most cryptocurrencies can either be mined solo or in a mining pool. For beginners, choosing a mining pool is recommended. A good mining pool should have a strong track record and reputation. If you are mining Bitcoin or Ethereum, joining a good pool will give you a competitive advantage and is crucial if you want consistent payouts.
If you are mining PKT, it is important to choose your mining pool configuration based on your upload bandwidth speed. If you have a lot of bandwidth, you can choose to multi-pool mine by connecting to numerous pools. You can test different PKT mining pool configurations here.
Although not recommended for beginners, one can also opt for solo mining. Solo mining is done independently so you do not have to share any profits with other miners. Solo mining is possible with Bitcoin, Ethereum and PKT; however, this type of configuration requires significant technological experience and is a much larger financial investment.
Keep Track of How Much You Mine
Bitcoin and Ethereum miners need to keep track of their yields to know whether their pool is profitable and their strategy is working. Mining pools use different interfaces, so there isn’t one universal way of keeping track of what you mine. However, with most Bitcoin and Ethereum mining pools you only need to go to the website’s home page and enter your public wallet address to get all the information you need. Similarly, with PKT, you can enter your wallet address into the PKT World explorer to view your daily earnings.
Some pools have mechanisms in place to send what you mine to your wallet address once it reaches a specific balance (for example, 0.01 ETH). For PKT, you will get paid every 60 seconds regardless of what you earn in that time period.
Additionally, some mining pools and crypto mining websites have calculators that can be used to get rough estimates on long-term profitability. Here is an example of a Bitcoin profitability calculator:
Is Crypto Mining Worth It?
Mining cryptocurrency has two distinct purposes: supporting the network and generating income. In order to mine, there is often upfront and ongoing overhead cost that the miner must incur, including energy, software and hardware costs. Also, the rewards earned by the miner may not always be worth more than the overhead in a given period. This may mean that you are mining at a short-term loss.
There is also the possibility that the cost to mine is less than the current market value of the cryptocurrency. This means that you are mining at a profit because the digital asset was accumulated at a discount to its current trading price. This discount-to-market-value ratio may also be calculated in the future, so what was a loss at one time, can reach profit in the future. For example, a Bitcoin miner in 2010 may not have been profitable because of the low value of the coin. But in 2022, those same coins are worth far in excess of the original mining costs. As a result, the Bitcoin miner that was mining at a loss in 2010, most likely has generated substantial profits as of 2022.
Since it is impossible to determine the future value of a cryptocurrency, it is recommended that miners also consider the value of supporting the networks they mine. If a miner believes in the value of supporting the network today, then the short-term profitability is of less importance. However, you must also avoid investing too much into crypto-mining before understanding the risks associated with mining. It is recommended to research the volatility of cryptocurrency markets and have a clear understanding of your pathway to potential profitability.