Mining

Mining is a term used to extract Bitcoin, for example. Many cryptocurrencies use mining for security and stability. You can engage in mining on your own or through so-called Pool Mining .

Are you one of those people who is fascinated by cryptocurrency? Then there are probably a number of concepts that are part of your vocabulary, which others may not even know the meaning of. One of these concepts is mining .

In recent years, cryptocurrency mining has become very popular. Not only among Norwegians, but all over the world. With mining, you have the opportunity to make quite a lot of money, so it is not surprising that very many people try it.

In this article, we will take a closer look at cryptocurrency mining. After reading this text, you will have a better understanding of what cryptocurrency mining is all about. In addition, you will be better equipped to get started with it yourself!
What is mining?
First of all, we have to answer the following questions: What is mining?

When it comes to mining cryptocurrency, you depend on having access to a computer. It is the computer that does most of the work in the process that comes with mining cryptocurrency.

However, we are not talking about a regular computer. What you need is a computer designed specifically to power a network of blockchains. If you are familiar with cryptocurrencies from before, then you know that many cryptocurrencies are built on blockchains. This happens during mining:

The computer uses its power to find the answer to mathematical challenges. These challenges are usually related to the transactions carried out internally on this network.
This process leads to the production of new currency units.
The computer ensures that possible inflation remains at a very stable level. The reason for this is that the tasks that are performed are quite advanced.
Once the mathematical challenges are solved, the person who has the computer (who is probably you) will be rewarded with cryptocurrency.

Mining is, in other words, a fairly extensive process.

Different expressions that describe the same process
However, mining is not the only term that can be used to describe this process. In fact, there are different expressions that it is completely inside to use.

It is not to be underestimated that the Norwegian crypto community has borrowed many words and expressions from English. But attempts have nevertheless been made to make Norwegian words for the same expressions.

In practice, this simply means that mining is actually an English loanword. In Norwegian, you can use the following terms when talking about mining cryptocurrency:

One is engaged in «mining».
They engage in “cryptocurrency extraction”.

In other words, there are at least three concepts for one and the same process. Both mining, mining and cryptocurrency extraction refer to exactly the same thing in connection with cryptocurrency.
How to get started with mining
Once you have gained control over what mining is all about and what expressions you need to be aware of, then you can begin the process of getting started with mining.

Mining may sound quite complicated, but it’s not really just a matter of getting to grips with it properly before embarking on the rest of the process. To get started with cryptocurrency mining, you just need to install a mining program on your device.

In addition to the miner program, you depend on having a graphics card that is powerful enough to make your computer suitable for mining. However, it is not just graphics cards that you can use for this. Your options are as follows:

GPU (graphics card, a very popular method because it has proven to be very efficient).
FPGA (a circuit that can be used for cryptocurrency mining, there are some who have developed this to use it for cryptocurrency mining)
ASIC (hardware specially designed for cryptocurrency mining)
CPU (computer processor. This was a very popular method before, but today not many people use this method anymore)

When it comes to which alternative you should use, it often depends on which cryptocurrency you should use in mining.

GPU and mining
GPU is, as I said, an external graphics card that you get for the computer you are going to use in connection with mining. This is a very effective method and it has made it very popular with most people.

However, not all alternatives work equally well for absolutely all cryptocurrencies. In practice, this means that GPU is a better alternative to some cryptocurrencies, but it will not work equally well with all.

If you are going to use GPU in connection with mining, then you should engage in mining of different altcoins, because these are the cryptocurrencies GPU works best on. Here are some examples of altcoins you can use GPU to recover:

Ether ( Ethereum ).
zCash .
zClassic.

ASIC and mining
ASIC is a hardware that some have developed specifically for cryptocurrency recovery . This hardware works in exactly the same way as the GPU. This means that some cryptocurrencies are better suited than others.

As we saw above, the GPU will work well in connection with the extraction of various altcoins. On the other hand, we have ASIC, and this is a hardware that is compatible with a bit of everything. In practice, this means that it can be used for both altcoins and the opposite of altcoins.

Here are some examples of which cryptocurrencies ASIC will be a good match with:

Bitcoin .
Bitcoin Gold.
Litecoin .

Bitcoin is the most popular form of cryptocurrency, so it speaks for itself. Litecoin, on the other hand, can be considered an altcoin, which shows that this is a hardware that can be used for various forms of cryptocurrency.
A mining rig
One method that is perhaps even more effective in getting started with cryptocurrency mining is simply to obtain a mining rig. But what do we really mean by a mining rig?

A mining rig is a common term for everything you need to get started with cryptocurrency mining. If you get such a rig, then you get everything you need in one place and do not have to go around looking for what you need. A mining rig contains the following:

A motherboard.
Operating system.
Remind.
Graphics card.
GPU.

In other words, if you are planning on extracting cryptocurrency using a GPU, then getting a mining rig can be a very good idea. Then you save yourself a lot of time and stress.

If you want to mine Bitcoin or other cryptocurrencies, you need a solid mining rig, but you can also participate in Pool Mining where you contribute with machine power and solve mathematical problems together with others (cheaper alternative). Binance offers Pool Mining to its users.
Advantages and disadvantages of mining
As with cryptocurrency in general, there are both advantages and disadvantages to mining.

Some will probably be of the opinion that the advantages outweigh the disadvantages of this process, while others may think that the disadvantages are not worth the general process. Which group of people you belong to, however, is entirely up to you to decide.

Below we will take a closer look at some of the advantages and some of the disadvantages that you may be asked above in connection with mining cryptocurrency.
Benefits of mining
If you ask someone with a long career in the crypto environment if you should start mining cryptocurrency, then that person will probably come up with a long list of good reasons to start with it.

Because it is not to be underestimated that there are actually quite a few reasons to try mining cryptocurrency. And many of these reasons are very good too!

The biggest motivation for doing mining for most people is probably that you have the opportunity to make good money from it. However, this presupposes that you use good elements that play on a team with you, such as a powerful graphics card.

We can also not fail to mention that this is a process that will teach you very much different. In addition, the cryptocurrency market is dependent on people engaging in cryptocurrency mining , so that cryptocurrency is still a thing of the past. So it’s very much positive here!
Disadvantages of mining
But it is also inevitable that there may be some disadvantages in mining cryptocurrency. Here are some of the disadvantages of mining:

Noise from the computer. This is because the graphics card works harder than it does in connection with other activities if the computer and the graphics card are used for, for example, surfing the Internet.
The computer will also produce a good deal of heat, because the graphics card works hard over an extended period of time.
You may find that your electricity bill is slightly higher. In the worst case, it can be very much higher than normal.
You may also have difficulty obtaining graphics cards, as this type of card is not used exclusively for cryptocurrency mining.

Since mining is a process where the computer works very hard, the sound from the computer is more or less inevitable. It is not just the noise level that will be noticed.

You will also notice this in connection with the electricity bill.

In practice, this means that it is not certain that the gain will be very large, if most of the gain ends up going to pay the electricity bill, which suddenly became a good deal more expensive. It’s obviously very awkward, but unfortunately it’s just the way it is.

There is also a real possibility that you will not always get a new graphics card just when you need it. The reason for this is that it is not only miners of cryptocurrencies who use graphics cards. This is also something that is used by gamers for when they are going to engage in gaming.
Mining can be both profitable and unprofitable
When you are engaged in cryptocurrency mining, it is important that you are aware that this is a process that can be as profitable as it can be unprofitable.

As mentioned in the section on the benefits of cryptocurrency mining, mining can be a good source of income for those who do it. But it is important not to be dazzled by an illusion, because it is not just joy and grief either.

Mining cryptocurrencies can be profitable, but you have a long way to go before that happens. In addition, it will take some time as well, after you have started mining. The equipment you need for mining is not cheap, so you need time to earn what you invested in it.

In addition, it is the case that mining cryptocurrency can lead to an increased power consumption, since this is a process where you are dependent on access to a powerful computer. This leads to the total amount on the electricity bill increasing, and it must of course pay. Many must use the gain for this.


Any gain is taxed
There is also another thing that is very important to keep in mind when dealing with cryptocurrency, and that is that you have to pay taxes because mining cryptocurrency is considered to be a possible source of income.

In other words, those who engage in cryptocurrency mining are forced to enter this in the tax return. And there is a relatively extensive work behind it.

You will want to make sure you keep track of how much you have earned on the recovery at any given time. This will make it easier to calculate the value when it is that time of year.
How to start mining
If you want to start mining, there are some things you need to get in place. Today, most people have a computer or similar at home, so what you need is:

GPU, ol
You can possibly get yourself a mining rig

Once you have all this in place, there is only one thing left. And that is to get a cryptocurrency wallet where you can transfer what you earn on the recovery.

Mining for beginners
Mining

Mining for beginners

22.09.2021
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Mining is a term you should familiarize yourself with if you are interested in cryptocurrency…

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