What is mining? How is bitcoin, litecoin or solo mining done?

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What is mining? How is bitcoin, litecoin or solo mining done?
What is mining? How is bitcoin, litecoin or solo mining done?

The Internet, which was created by US military scientists to transmit highly classified information, now provides users with almost unlimited possibilities. Here they communicate, meet, live and even earn money. More recently, the newest system has appeared, with its own currency and rules - this is "Mining". It quickly gained popularity, as it practically does not require constant presence and participation. So what is mining really? What does it need and how does it work? What is the best way to set up a business: join a community or do it yourself, investing only your own funds and efforts?

What is mining?

What is mining?
What is mining?

What is this system of online earnings? If we talk about the literal meaning of the word "mining", then this is the extraction of various minerals. But on the internet it's a process of gettingvirtual cryptocurrency. It covers not only finance, but also various elements of programming. In this case, almost everything depends on the installed video card and processor.

The answer to the question of what mining is and how to make money on it depends on how much you are aware of the operation of your own computer equipment and the process of transmitting information over the Web. The basis in this system is the generation of individual parts of bitcoin (cryptocurrency) by building a hash.

In other words, the essence of mining lies in the fact that many unconnected computers solve various mathematical computational problems through a special program. As a result, bitcoins are created, which are transferred to the miners themselves for the work done.

History of occurrence

The most interesting thing is that, despite the global recognition and popularity, bitcoin mining has a rather dark past. Even now, practically no one knows who exactly and when exactly invented this financial-computing system. In addition, over the past few years, many versions of possible origins have appeared. However, there are also undeniable and generally accepted facts.

It is believed that for the first time it was possible to earn several units of this cryptocurrency back in 2008. Initially, the miner was someone Satoshi Nakamoto, a Japanese. Although some argue that this is just a fictional person, but in fact the first earners were several people at once. At that time, a certain file appeared on the Web, which carefully described the structure, protocols andprinciples of operation of a peer-to-peer system. And in 2009, the first full-fledged client was introduced.

Within a fairly short time, this type of income has a lot of fans and followers. But it is worth noting that in some countries, such as, for example, Thailand, cryptocurrency mining has been banned.

Basic rules

As in every professional system, there are several forming principles that make it so unique and interesting. So, what is mining, you can understand by reading its main provisions:

  • litecoin mining
    litecoin mining

    There is no centralized control in the virtual currency mining system. Therefore, it cannot be blocked or subdued.

  • The system is anonymous. Users are not required to provide official personal data. This makes it impossible to trace any transaction.
  • Mining on video cards works according to the originally specified algorithms. Because of this, it is impossible to create more bitcoins than necessary.
  • Transactions cannot be reversed and all information about them is stored in a shared database. In doing so, it uses the blocks that arise in the process of creating bitcoins.
  • Earnings are provided by the resources of a separate computer. At the same time, the mined bitcoins can not only be exchanged within the network for various goods and items, but also converted into real money.

Specialized equipment for mining

Mining on video cards
Mining on video cards

One of the main rulessuccessful and profitable business - investments. After all, if you do not provide a good start to the business, then all efforts will practically be in vain. That is why bitcoin mining requires significant investments in equipment. In this case, you can go in two ways: buy a specialized ASIC complex or buy all the elements separately. The first method will give you the opportunity to get more performance, and the second one is much cheaper.

ASIC is a specialized system created by student Yifo Guo. Its value and high efficiency lies in the fact that it solves one specific problem - calculating hashes. In addition, it is quite compact and unpretentious. But it is very difficult to get such a system, because it is quite expensive, and the order will have to wait up to several months.

Standard bitcoin mining equipment

If you choose a more budget option, then you will need the following tools for mining:

Farm for mining
Farm for mining
  • Motherboard.
  • Video cards (preferably several).
  • Powerful processor.
  • Power supply.
  • High capacity hard drive and extra memory.
  • Cooling system.
  • Riser extensions for additional graphics cards.

The challenge is to keep it all up to date with the latest technology and trends. A lot of? What did you want? What is mining without investment? Zero without stick.

Required settings

Bitcoin mining uses not only the latest computer equipment, but also specialprograms. For example, Bitcoin or CGMiner. But! For them to work correctly, you need to set the appropriate settings. This will greatly improve the productivity and efficiency of the process.

Mining setup is very important, requiring some adjustment of the equipment operation:

  • I is the load intensity of the graphics card. It is recommended to increase from 9 to 20 points, depending on the power of the equipment used.
  • Thread-concurrency. This is the number of calculations.
  • G is the number of threads. It is optimal to set the value from 2 to 10.
  • Gpu-engine. The frequency of the graphics core depends on it. The optimal size is 900-1500.
  • Gpu-powertune. Power consumption of the used video card. Value from -20 to +20.
  • Gpu-fan. Fan cooling. Recommended to be set at 85%.
  • Gpu-memclock. This is the frequency of the RAM of the video card - 1500.

This is almost all the necessary parameters. They directly depend solely on the power of the selected equipment.

mining setup
mining setup

Litecoin mining

Bitcoins are not the only virtual money that can be mined using special equipment. This is due to the fact that over time, it becomes more and more difficult to mine cryptocurrency, due to many features. Therefore, more and more new financial units are being invented. Litecoin mining, like bitcoin mining, has the same principle of operation. But there are a few significant differences here:

  1. Technologycalculation of blocks depends less on the video card than on the amount of memory and the power of the processor used. Therefore, you can use completely ordinary computers, with little to no money for additional equipment.
  2. The difficulty of mining litecoins, unlike bitcoins, can not only increase over time, but also significantly decrease. This allows you to mine more litecoins on the same hardware.
  3. The process of calculating this cryptocurrency is much faster, which means that the user earns much more real money.

Despite the obvious benefits, compared to bitcoins, litecoin mining has begun to lose ground. It's almost as hard to earn money now.

Solo mining

Bitcoin mining
Bitcoin mining

The name of this online earnings is fully consistent with its essence. Bitcoin solo mining is all about solving various cryptographic equations alone.

The process of mining virtual currency is carried out by pooling, where several tens, or even hundreds of people, united by one network, build the correct hash. Also, those who have their own mining farm can work independently.

Each option has its pros and cons. It is worth noting that one can significantly save on organizations, since pools take a certain percentage for each transaction. However, solo mining requires sufficiently powerful computer hardware. And only a fairly we althy person can afford it.

Pros and cons

Before engaging in such a popular activity, you should carefully weigh the pros and cons. The advantages of this method include:

  • He does not require personal intervention. You can just download the program and calmly go about your own business while the computer earns. And the higher the mining speed, the more money will be.
  • Production depends only on the capacity of the equipment used.
  • All mining programs are carefully checked for viruses, and therefore they are absolutely safe for your computer.
  • Each pool has an affiliate program, thanks to which you can invite friends and earn a certain percentage on this.
  • Payments can be received in several ways, while you can withdraw absolutely any amount, even a small amount.

The disadvantages of this program include:

  • Every year the mining process becomes more and more complicated, therefore it requires more and more powerful equipment.
  • Cryptocurrency is also affected by external global money markets.
  • There are some internal problems, for example, there is no clear regulation of the exchange of litecoins and bitcoins.

Most Popular Cryptocurrency Payout Systems

mining software
mining software

Pay Per Share. Here, a fixed payment for each transaction is accepted. Great for intermittent mining. The only downside is the rather high commission.

RBPPS. It differs in that the reward is credited only after checking the correctnesscomputing. Accordingly, the commission here is quite low.

PPLNS. This is payment for the last few operations that took place in the last round. Used for continuous mining. The system works only for found and accepted blocks.

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