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Mining crypto currency - what is it and how to make money on it

With this note, I open a series of articles on the mining of crypto-currencies. In this heading, we will look at all methods of mining crypto-currency, the equipment that is needed for this, and we will also conduct various comparative analyzes. I hope you will enjoy.



Mining - from the English word mining (mining of minerals) is a certain type of activity aimed at supporting distributed computing, as well as creating new units, for which remuneration is paid in the form of new units of a certain crypto currency, including Bitcoin.

I note that mining is not the only way to generate new blocks. There are two more ways:

Forging (building) - the creation of new blocks is based on the confirmation of the shareholdings of any crypto-currency, for which a fee is charged in the form of units of crypto-currency and commission fees.
ICO (Initial Coin Offering) - investment in new, not yet issued, crypto-currencies.
Both alternatives will be discussed in more detail in other articles. And now about the mining.

Mining crypto-currency is a big broad subject and within one article it will not be possible to cover it. There is a huge amount of crypto-currency and for extraction of each a certain algorithm and special equipment is applied. It should also be noted that not all coins can be mined by mining.

Evolution of mining. Types of equipment for mining
If to consider as an example the most popular crypto currency for today - Bitcoin, then initially when the currency only appeared in 2009, computer CPU processors were used to generate new blocks, and the hash-sum of the new block could be calculated manually using paper and a pen . This period lasted about 2 years.

In 2011, the era of mining on graphics processors GPU graphics came. Video cards are much better at generating new blocks. It was at this point that computers with several video cards began to appear, the so-called Rigi (rig). At the same time, entire farms appeared that unite dozens and hundreds of rigs.

In the epoch of mining on GPU accelerators, there were joint mining sites on the Internet - Pools, and single solo mining was a thing of the past, as it became risky and expensive.

In 2013, it's time for mining on FPGA chips - their performance is comparable to GPU-cards, but they are more energy efficient.

With the increasing complexity of calculations, the Bitcoin mining and other crypto-currencies based on the same algorithm became ineffective. Therefore, in 2012, the release of specialized processors - Asikov (ASIC), intended solely for the calculation of Bitcoin hashes - began.

So began to appear companies that carry out mining on an industrial scale, placing their huge farms in the area with cheap electricity. Some of them are engaged in selling part of their capacity, renting them. So appeared cloud mining (Cloud Mining).

All of the above applies more to the Bitcoin crypto currency. But in addition to it there are a number of crypto-currencies that can be extracted on the CPU and on GPU-processors.

For example, with the help of GPU-processors it is possible to produce such popular crypto-currencies as Ethereum (ETH) and Ethereum Classic (ETC), Zcash and Zclassic and many others.

Available mining on GPU-processors
Mining on video cards is more interesting for ordinary users, since having a small amount of money can start in this thread. Yes, what can I say, some of the mines and one video card. Only in this case you can forget about high incomes.

All miners on GPU-processors can be conditionally divided into two camps:
Camp "red" - those who prefer video cards on AMD chips.
Camp "green" - prefer the video card on NVIDIA chips.
Video cards on these chips have their own peculiarities in mining, different productivity when mining different crypto-currencies, as well as features in the selection of components when assembling rigs.

On the selection of components, read the corresponding section on mining.

Alternative ways of mining
Here it is worth mentioning about the gaining popularity of a more exotic kind of mining - using hard disks, as an example - the Burst crypto currency.

In this case, technology Proof-of-Capacity (PoC) or "proof of capacity" is applied. Accordingly, it is important the capacity of hard drives participating in the mining and their number. So far, this technology is only beginning to gain momentum, but a small profit can already be obtained.

Another type of crypto currency is currency, which uses the Proof-of-Stake (PoS) principle - "proof of storage", which is carried out during their storage on the wallet due to the duration of this period. That is, the equipment does not produce any calculations, but simply stores the currency in the wallet. But to take part in the PoS-m

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