Traditional banks have their own internal processes of verifying transactions. They use a centralized approach, which primarily means they confirm the transactions in their ledgers and records. Users are then shown these records via bank statements as an assurance that the transactions have taken place. Cryptocurrencies, however, use a decentralized approach of verifying transactions. Nodes or computers which are interconnected from all over the world are used to verify cryptocurrency transactions. This is done through a process referred to as mining. Someone who mines is referred to as a coin miner. Verifying cryptocurrency transactions requires solving complex mathematical equations and this is why specialized hardware is needed for mining.
Here are 5 steps for becoming a coin miner:
Buy mining hardware
A coin miner refers to a specialized computer that has the minimum specifications needed for mining. Examples of popular miners are Antminer S9, Antminer S9 v2, and AvalonMiner 741. The notable specs to look for in the hardware are the hash rate and power consumption. Hashrate refers to the speed at which the computer takes to compute an operation. The higher the hashrate, the faster the miner will mine cryptocurrencies. The most ideal hardware is one with a high hashrate but with a low power consumption.
Download a coin mining software
Once you have bought your Ascii mining hardware, your next step is buying and installing the software you will use for mining the cryptocurrencies. There are many pieces of software to choose from but they can be categorized into two broad categories, GUI based and command based. The GUI bases software is perfect for beginners who do not want to be worn out by entering several commands on a blank screen. Command based software is ideal for more advanced users who are accustomed to using Unix and other command-based applications.
Join a coin mining pool
Even though it is not mandatory, joining a coin mining pool will increase your chances of earning more. Mining rewards are usually paid to the coin miner that first solves a puzzle and this simply means that coin miners that have a higher mining power stand a better chance. When you join a pool, you combine your different coin mining power and then share the proceeds.
Create a wallet
Once you have your hardware and software all set, the next thing you want to do is create a cryptocurrency wallet. This is a digital wallet that will use to store all the coins you mine. If you go for a hot wallet (one that is online), remember to secure it with MFA/2FA. You could also go for a hardware wallet for even more security.
Join a coin miner exchange
At some point, you will want to either sale or start trading with your cryptocurrency. In order to achieve this, you will need to set up an account with a good exchange. It is better to have the exchange account set up in advance so that it saves you time when you decide to sell some of your coins. Even though your exchange will give you a wallet, do not be tempted to leave your coins there because you do not own the private keys of your exchange’s wallet.
Even though the process of coin mining is quite complex, almost anyone can do it. All you need to get started is buy the right hardware and software, set it up, and let the coin mining run on autopilot. As long as you do it right, being a coin miner can be a great way of making a consistent passive income. Remember to do the math though because it will be counterproductive to earn some money only to end up spending most of it on power bills and hardware maintenance. That’s the balance that you need to strike as a coin miner. Be diligent.