What is digital currency mining (Mining) and how can it be done?

Digital currency extraction or mining is one of the methods that activists in this field use to earn money. Next, we will talk more about mining.

As cryptocurrencies and their news enter the mainstream of people's lives, more and more people are becoming interested in the new and somewhat strange world of blockchain. Many of these people are drawn to cryptocurrencies because they have heard that they can make money. What is digital currency mining? In this article, we want to discuss about one of the methods of earning profit from cryptocurrencies, which is mining. Also, we examine the types of mining methods and the equipment required for it. If you are one of the people interested in making profit from digital currencies, stay with us with this article.

 

What is digital currency extraction or mining?

Most people think of cryptocurrency mining as simply a way to create new coins. However, cryptocurrency mining involves validating transactions on the blockchain network and adding them to the distributed ledger. Most importantly, cryptocurrency mining prevents double-spending in a distributed network. As with physical currencies, when a member spends cryptocurrency, the digital ledger must be updated by debiting one account and adding to another.

However, the challenge with digital currency is that digital platforms are easily manipulated. Therefore, the distributed ledger allows only valid miners to update transactions in the digital ledger. This gives miners an additional responsibility to secure the network against double spending. Meanwhile, new coins are generated to reward miners for securing the network. Since distributed ledgers lack centralized authority, the mining process is crucial for validating transactions. Therefore, miners work to secure the network by participating in the transaction validation process, which increases their chances of earning new coins. This process involves solving complex mathematical equations (hash), which is done by computers or special systems.

digital currency mining training; From zero to one hundred in 2021

In order to extract digital currency, you must choose a suitable and profitable method based on the desired currency according to the contents that will be described below. Also, provide and deploy the equipment needed to set up a mining system. Electricity consumption is one of the important points in the extraction process. According to the laws, it is forbidden to use subsidized and household electricity for mining operations. In order to operate in this field, you must receive a license from the Ministry of Safety and Electricity with an export tariff from the Ministry of Energy. Other items mentioned in the equipment section are all necessary and important items that must be prepared.

The easiest and best way to calculate mining profitability is to use a mining calculator . By entering the requested values ​​(such as the processing power of the devices, the amount of electricity consumed and the cost of electricity consumed) into this calculator, you can calculate your approximate income. Also, along with the calculated income, consider the initial and side costs and get the return time of your investment. Be sure to start with an open mind and take everything into consideration.

In the following, we will talk more fully about how to mine digital currencies and important points in this field.

How is the digital currency mining process?

Cryptocurrency mining(Cryptomining) is a process in which cryptocurrency transactions are verified and added to the blockchain's digital ledger. During the cryptocurrency mining process, volunteer coders, called cryptominers, compete against each other to solve complex mathematical problems using high-powered computers. Each problem uses cryptographic hash functions associated with a block containing the transaction data of a cryptocurrency. The first miner to solve each equation is rewarded by allowing the transaction to take place. This reward is a small amount of that cryptocurrency. When a miner successfully completes the math equation and verifies the transaction information, the data is added to the blockchain ledger.

Cryptocurrency mining requires computers with special software designed to solve complex cryptographic mathematical equations. In the early days of this technology, cryptocurrencies like Bitcoin could be mined with a simple home computer CPU. However, over the past years, due to the increase in the level of difficulty in mining most cryptocurrencies, it is impossible to use normal CPUs for mining. In addition to high-performance computers, miners should have a dedicated wallet for the desired cryptocurrency and join a mining pool to maximize their profitability. Also, the mining operation requires a permanent connection to a secure internet.

What is the equipment needed to extract digital currency?

To extract digital currency , equipment and software are needed, which have different types according to the type of cryptocurrency and the desired scale for extraction. For example, to mine Bitcoin, the following equipment is needed:

• Special mining device ( ASIC ): It may be economical to use CPU, GPU, etc. for other cryptocurrencies, but ASIC devices should be used for Bitcoin. Conventional or mobile systems are not suitable and profitable tools for mining.
• Appropriate and economical electricity: One of the important issues to consider for Bitcoin mining is electricity. Mining devices consume a lot of electricity. For this reason, you should think of special measures to be able to carry out extraction in terms of safety and legality. Note that according laws, it is prohibited to use subsidized domestic electricity.
• Cooling system or fan: Mining machines are constantly on and perform high activity. For this reason, to improve efficiency and increase lifespan, they have a serious need for a cooling system.
• Stable Internet: Bitcoin mining operation requires a connection to a stable Internet network that does not have outages. Internet speed is not very important.
• Cryptocurrency Wallet: To store your mining earnings, you need a wallet that matches that cryptocurrency. Bitcoin wallet software is readily available for free.

To do Bitcoin mining, you need to use a mining software. Most Bitcoin mining devices have the required software by default. However, for some reasons some people use these software. The most reliable Bitcoin mining softwares are: CGminer, BFGminer, EasyMiner, MultiMiner, etc.

Digital currency mining methods

Technically, it makes sense that those who have the most powerful and fastest systems will earn the most. Most computers have the ability to mine, but they are not efficient enough to be profitable (earn more than the cost of electricity and other side costs.) We will introduce and explain different methods for mining digital currency below:

Mining digital currency with graphics card or GPU

It is possible to run cryptocurrency mining algorithms on almost any computer. A modern computer has a CPU (central processing unit) and a GPU (graphics processing unit). If the CPU is the brain of the computer, the GPU is the part used for mining. Modern GPUs like the GTX 3080 are decent and powerful options that make mining profitable. Even in places like the US where electricity costs are usually high.

What is graphic card mining? How is it done?

The graphics processing unit in computers, which is called GPU for short, is actually the same as the graphics card. Graphics cards are even more powerful than CPUs in performing some processing calculations, and for this reason, they have been considered for mining. In general, graphics cards are very suitable for mining cryptocurrency from some blockchains such as Ethereum.

In recent years, the two major graphic card manufacturers, AMD and Nvidia, have been in close competition for the supply of powerful cards. As a result of this competition, we now see that some of the models of these two companies have extremely high processing power, and for this reason, they have attracted the attention of miners. Meanwhile, Nvidia cards are somewhat more popular. Of course, this was not the case in the past, and AMD cards performed better.

Currently, in order for miners to use the maximum ability of graphics cards for mining, they overclock these cards. That is, they improve their power in different ways. This work must be done according to certain principles, because otherwise it can damage the device. Because it is detailed and complicated, we will not teach you how to mine with a graphics card here, but you can follow this tutorial in other "Cryptocurrency Academy" articles and also get to know the best graphics cards for cryptocurrency mining.

Mining digital currency with home computer and CPU

The use of CPU for mining was more popular in the early days of this work. However, many believe that the use of CPUs today has very little efficiency due to the slowness of the mining process and the high costs of electricity and the cooling system, as well as the increase in the difficulty of the network.

From the very beginning when a cryptocurrency like Bitcoin was introduced, its creators announced that the CPU of computers should be used to mine this digital currency. But later, experts in this field realized that better output can be obtained from other computer parts such as graphics card. This was the reason why mining computers were gradually introduced. Computers that did not look much different from a normal PC, but some of their parts such as CPU and GPU were very powerful.

What is computer mining? How is it done?

In the early days of introducing Bitcoin, it was possible to mine this currency through CPU. But over time, this became more difficult and miners realized that using multiple graphics cards at the same time could be very beneficial. For this reason, computers were made that were not only very expensive, but also had high consumption power.

Currently, the computers that are designed and built for cryptocurrency mining are called mining rigs . These computers have the same components as other PCs, but usually appear much stronger in the graphics card section.

Cryptocurrency mining with ASIC

As Bitcoin mining grew in popularity, companies such as Bitmain and Antminer sprung up, building and selling special purpose computers with mining capabilities. These ASIC (application specific integrated circuit) computers dominated the network and people collected hundreds of them, formed mining farms and started mining. ESIC systems are so specialized that they often only have the ability to mine a specific currency. Because of this, a software update can render an ASIC system obsolete overnight.

All in all, ASIC systems and GPUs are used more than anything else today, depending on the cryptocurrency we want to mine. It is possible to use home computers and mobile phones to mine some cryptocurrencies, but in general, due to the weakness of these systems, it causes damage to them. Most of the existing advertisements recommending the use of home systems for mining are profit-seeking and fraudulent.

Mining digital currency with hard disk

Mining Bitcoin or Ethereum using expensive graphics cards brings a lot of costs, because in addition to the cost of buying cards, the cost of electricity consumption must also be paid by the miner. For this reason, when Chiacoin was introduced with the ability to extract from hard drives and SSD memories, it was quickly noticed. This cryptocurrency, which is mined using a new method called Proof-of-Space, has presented itself as an environmentally friendly alternative to Bitcoin and Ethereum.

In the hard disk or SSD mining method , the miner will have a chance to win Chia cryptocurrency every day, because only 4608 Chia blocks are created per day. But on the other hand, you should consider hardware depreciation in this method. It is commonly said that with a 512 GB SSD, you can only mine Chia cryptocurrency for up to 40 days.

Mining digital currency with mobile

Many users want to know if it is possible to mine digital currency with smartphones. In answer to this question, we can say very simply: yes. But there are many reasons why we do not recommend mobile mining. The main and important reason is that mobile mining has a very low yield and is not economically justified. For example, the reward you receive for mining Bitcoin on an Android phone for a year is so small that you can easily limit it. Also consider that the depreciation of your phone will increase a lot due to mining and its life will end much earlier.
Mining digital currency with iPhone mobile

There are many programs for mining cryptocurrency on iPhone phones. But note that even though iPhones have high processing power, they are not suitable for mining and do not provide good results. So finally, if you want to mine digital currency , it is better not to think about using mobile phones for this.

Free cryptocurrency mining

There are many ways to mine cryptocurrency for free. Of course, one thing you should pay attention to is patience. Because most of the sites where you can mine cryptocurrencies for free reward their users for long periods of time.

Free digital currency mining with mobile

There are applications that provide the possibility of mining all kinds of cryptocurrencies such as Litecoin for free on mobile phones. You can easily find these programs with a simple search.

Mining digital currency with a laptop

Home computers and laptops provide the possibility of mining digital currency , but the important thing is that the processing power of these devices is limited. Maybe in the past it was possible to mine Bitcoin with a powerful laptop, but now it is almost impossible or has very low returns. You might be able to mine a small amount of bitcoins in the long run with your laptop graphics card, but overall it's not worth it. If you want to start mining with a laptop, note that your device's hardware must be strong. Besides, it is better to go to other cryptocurrencies (other than Bitcoin).

Mining digital currency with the game

We already said in the article we published in "Cryptocurrency Academy" that it is possible to mine Bitcoin and other digital currencies by playing games. We even introduced many games for computers and mobile phones, by playing them you can earn a certain currency within a certain period of time. The reason this method is popular is that it is free and fun.

Types of digital currency mining

Digital currency mining can be done in three ways:

• Individual mining: This mining method is based on the miner's personal equipment and is done independently without the need for collective participation in the mining pool. In this case, all the coins you have mined belong to you. In individual mining, equipment power is very important. Solo mining is efficient for mining relatively new cryptocurrencies.
• Collective mining in mining pools: A pool is a server that combines the computing power of miners. It is a collaborative computing network that works to create new blocks in the network. The mined coins are divided among the miners according to everyone's contribution in the progress of the work. Due to the increasing complexity of the network of popular and long-standing cryptocurrencies, it is necessary to form a pool for their extraction.
• Cloud Mining: Here you rent computing power from a service that is itself mining on an industrial scale. Unlike the previous two methods that use their own mining equipment. If you use this method, you will no longer need to set up a mining farm and maintain it. You rent a rig for a certain period of time. During that time, all the revenue that rig earns (minus electricity and maintenance costs) will be transferred to your digital currency wallet. In recent years, Cloud Mining has become very popular because it allows people who don't have a lot of money to buy equipment to participate. There are usually two forms of cloud mining, free and paid. Free options usually have problems such as very slow extraction speed, other additional conditions, etc.

What are the best digital currencies to mine?

While Bitcoin is the oldest cryptocurrency and has a very high value, it is not a good option for most people to mine. Mining this currency is complicated and the difficulty of its network is constantly increasing. Bitcoin mining is only profitable on a large scale. For mining on a small and personal level, it is better to go for cryptocurrencies that are not so well known and are easier to mine.

To choose a cryptocurrency for mining, you should pay attention to things such as recent price fluctuations, market size, the project's purpose and applicability, and the records of its developers. Finally, according to these things, calculate the return time of your investment and start mining if it is justified. There are many altcoins that are just a scam project and mining them will bring you a lot of problems. So be sure to do a thorough research before choosing a cryptocurrency to mine.

What are the best mining software?

There are many programs that can be used to mine digital currency . In this section, we name only a few of the most famous mining programs and introduce them:

• CGminer program (CGminer): If we want to introduce the most popular program for mining Bitcoin, we must mention CGminer. Although this program does not have a graphical interface and runs in the CMD environment, it has many features such as overclocking and fan speed control.
• BFGminer program: This program is very similar to CGminer, except that it does not support graphics cards and is only suitable for ASIC and FPGA devices. This program also does not have a graphical user interface, but it has a function that starts the mining operation with the use of a button.
• EasyMiner program: This program is functionally similar to the two programs above, but it has a graphical user interface and is therefore more suitable for novice miners. With this program, you can directly mine or connect to a mining pool.
• Multiminer program (MultiMiner): This program is developed based on BFGminer, but has a graphical user interface. After installing the program, your hardware will be detected and relevant information will be displayed. MultiMiner supports both graphics cards and ASIC and FPGA devices.
• BitMinter program: BitMinter program is actually a Bitcoin mining pool that has its own dedicated program. Therefore, in this program, you are faced with a mining pool that you can join and start mining.
• GUIMiner program: One of the most powerful Bitcoin mining programs is called GUIminer. The user interface of this program is very clear and suitable, and it provides the possibility of mining cryptocurrency with CPU and GPU. This program is not suitable for ASIC devices.

Mobile digital currency mining program

As we said, mining with a phone is not cheap, but if you want to get acquainted with the applications that exist for this task, here are five of them:

• DroidMiner app : DroidMiner app can mine cryptocurrencies like Bitcoin, Litecoin and Dogecoin. This program is available at a price of $0.99 and according to the claims of people who have used it, it drains the phone's battery very quickly.
• Electroneum app: The Electroneum app has been downloaded more than a million times and is very popular. By installing this program on their phone, users can mine Electroneum cryptocurrency.
• MinerGate app: This app is actually a mobile version of the desktop MinerGate app. Users who have already used MinerGate on their computers will probably welcome the release of this application on mobile. This application supports different cryptocurrencies and has a digital wallet.
• NeoNeonMiner app: To mine digital currency with NeoNeonMiner app, you need to join a mining pool. This program, which has an attractive user interface, supports most of the popular cryptocurrencies such as Bitcoin, Litecoin, etc.
• Pocket Miner app: Pocket Miner app only supports Litecoin cryptocurrency. This program uses the processor of the Android phone optimally to have the best efficiency.

What is a digital currency mining calculator?

The mining calculator helps you find out the hash rate of the algorithms and see which coins are supported by these algorithms. The mining calculator calculates the amount of rewards, costs and mining profit for you.

It is necessary to use a digital currency mining calculator because it makes you not enter the mining process without preliminary investigation and you can better understand the potential of your mining device.

What is a digital currency mining license? How to receive?

Since 2018, cryptocurrency mining has been allowed in our country. But people who want to work in this field must obtain the necessary permits. Otherwise, their activities will be prevented and they will face punishments. This license is issued by the Organization of Industry, Mining and Trade, but currently, due to the lack of electricity and successive outages, the issuance of any license in the field of cryptocurrency mining has been canceled.

Conditions and how to obtain digital currency mining license

One of the important points that you should know before applying for a digital currency mining license is that it is not possible to issue a license in the name of several real or legal persons, and people who want to apply for a license together must hire a company for this. To register.

The validity of the issued licenses is 6 months, which can be extended by presenting relevant documents. The source of energy supply for mining devices must be determined. It will be possible to supply electricity through the national electricity network or electricity generation methods (such as the construction of a private power plant) within the framework of existing regulations. Also, the people who apply for a license must have a total power consumption of their mining devices of 100 kilowatts or more.

What is a digital currency mining machine?

You may ask what is a digital currency mining machine ? This device, which is also called a miner, is a set of hardware that is used to mine cryptocurrency. Mining of digital currencies requires very high processing power, which miner devices provide.

Introduction of digital currency mining machines

Currently, there are various models of cryptocurrency mining machines on the market, each of which has its own characteristics and is used for one or more specific types of cryptocurrencies. In general, the main hardware for mining includes the following:

• Central processing units or CPUs
• Graphics processors or GPU (same as graphics card)
• Application-specific integrated circuits or ASICs
• Programmable Digital Integrated Circuits or FPGAs

The price of mining machine in different types

As we said, different devices have different features and their hash power is different. For this reason, there is a wide price range for these devices. For example, a normal device such as Whatsminer M1 microbit miner is sold at the price of 7 million Tomans, but the Inosilicon A11 Pro ETH 2000Mh/s miner, which is very powerful, costs about 750 million Tomans. All in all, novice users who want a device with decent processing power should spend between 30 and 50 million Tomans.

What is data mining?

Data mining, which is also called data mining, is a process that uses intelligent algorithms to extract correlations and useful patterns among a large amount of raw data. It means to extract knowledge from a set of data.

Calculation of electricity consumption for mining

One of the important points that must be considered before buying a miner is the power consumption of the device. You should consider that miners consume a lot of electricity and the amount of consumption of each of them is different from the other. In order to be able to calculate a miner's monthly electricity consumption, you must first know the electricity tariff. By visiting the website of the Ministry of Energy, you can see the electricity tariff for low consumption household subscribers. In the relevant table, it is mentioned that in hot or non-hot months, as well as in different regions, how much should be paid per kilowatt hour per month.

Then you need to go to the specifications of the miner and see the amount of electricity it consumes. You must multiply the energy consumption of the device by the number 24 and then by the number 30. That is, if the energy consumption of the device is equal to 5000 watts, we first convert it to kilowatts, which equals 5 kilowatts. Then we multiply the number 5 by 24 and then by 30, which equals 3600. This means that the amount of electricity consumed by your device per month is equivalent to 3600 kilowatt hours. Now, referring to the consumption table, you should see how much the price of each kilowatt hour is calculated for you. With another simple multiplication, you can get the final amount of miner's electricity consumption during a month.

How to buy a mining machine and where to buy it?

Currently, there are many online stores that sell various models of miner devices. You can compare the different features of these devices online and then buy the device you want.

What is bitcoin mining?

Bitcoin mining is actually the process of extracting bitcoins. But if we want to explain in simple language, Bitcoin mining means that people as miners (extractors) provide the processing power of their mining devices to the network so that the security of the network is maintained and Bitcoin transactions are also confirmed. In exchange for this work, mining people are given a reward, which is the same as Bitcoin.

Frequently asked questions about mining

Now that we know what digital currency mining is and how it is done, probably other questions have occupied your mind. In the following, we give short answers to some of these frequently asked questions:

What does digital currency mining mean?

Digital currency mining is the process of validating and confirming transactions made in the blockchain network, and users are rewarded for doing this work from the blockchain network.

How to obtain a digital currency extraction or mining license?

The necessary license to extract digital currency is issued by the Organization of Industry, Mining and Trade and includes the requirements that we have mentioned in full in the text of the article.

How to start mining digital currency?

In short, digital currency mining consists of five steps (after obtaining the necessary permits): 1. Buying suitable computer hardware 2. Setting up a cooling system 3. Creating a wallet 4. Download extraction software 5. Join a mining pool

Is it possible to make a profit through Bitcoin mining?

Miners ensure the security of the Bitcoin network during transaction validation operations and receive Bitcoins in return. If the value of bitcoins received is more than the cost of mining them, miners will make a profit.

last word

In this article, we said what digital currency mining is and what are its different types. As you may have noticed, there are different ways to learn how to mine cryptocurrencies . In this article, after introducing mining and its process, we reviewed the currency extraction methods and discussed the types of mining. One thing to remember is to create a cryptocurrency wallet. First decide on the type of digital currency you want to mine and then simply choose a suitable wallet to store them. If the coin you choose to mine is bitcoin, ethereum, litecoin, or any such popular currency, otherwise you need to research and read about them well. If you have a question or experience in the field of digital currency miningIf you have, share it with us and other dear readers of Crypto Currency Academy .

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