Method

What mining methods are there?

There are four main methods most programmers use to mine cryptocurrency – cloud mining, CPU mining, GPU mining and ASIC mining. The choice between the four mining depends on budget and how hands-on a miner wants to be.

Cloud mining is an automated process usually relying on a third party with the required computer systems powerful enough to perform at the standard required to solve massive mathematical tasks. Miners often pay companies to rent out their mining machine, or rig, to perform the mining for an arranged contractual period.

The earnings generated by the rig go straight to the miner’s wallet. The companies providing these rigs often specialise in cryptocurrency mining and have the means to provide the electricity and cooling systems required to operate huge facilities housing thousands of rigs.

Potential miners wanting to get started using the cloud method need to first find an online host and a payment plan.
The plans vary in costs and offer mining services for anywhere between month-long to lifetime contracts. All that is required is payment, then the mining will begin.

Cloud miningCloud miningUsually a paid offering by a third party with the required computer systems powerful enough to perform the task of solving algorithms to mine for cryptocurrency.

There is also a free cloud mining option, however the drastic difference in mining speeds between unpaid and paid methods means many tend to gravitate more towards payment plans.

What is CPU and GPU mining?

CPU mining played a significant role in cryptocurrency mining during its infancy and is still utilised today, but to a lesser extent. A growing need for processing capabilities means the technique’s utilisation of single processors is fast becoming redundant.

The rate at which revenue is generated with CPU mining means miners must wait much longer to see a return on their investments and more often turn to cloud mining instead.

However, there remains a place for CPU mining in the cryptocurrency mining world, purely for the opportunities it provides DIY miners. Miners capable of performing the task themselves don’t have to rely on paying online hosts, but instead use their own system.

Technically, any desktop PC can mine, though a regular system will yield very little in terms of revenue results and likely overheat and capitulate under the stress.

CPU miningCPU miningThe process of adding transactions to a blockchain by performing and solving algorithms using a Central Processing Unit (CPU).

There are also drawbacks of having to provide a system capable of performing, and the added costs of electricity and cooling. But many still prefer to perform the tasks themselves choosing to accept the lower rates of revenue if it means avoiding paying for online hosts.

GPU miners are like the professional cloud miners in that they use the same rigs, but on a much smaller scale.

Cloud miners have thousands of rigs servicing many mining clients, while GPU miners build their own rigs. This allows them to operate themselves, much in the same way as CPU miners, while also having access to processing power capable of producing more revenue faster.

These rigs are generally quite expensive to build, and made up of multiple elements including processors, graphics cards, cooling systems. But if built correctly and utilised well, these systems can be paid off in a matter of months.

GPU minersGPU minersGPU mining is the most popular method of cryptocurrency mining today, combining elements of cloud and CPU mining for wider access.

What is ASIC mining?

ASIC mining is perhaps the most powerful technique, and generally unattainable for the average aspiring cryptocurrency miner. Rather than using multi-use technology designed for application to all sorts of different tasks, like rigs used for CPU or GPU mining, the ASIC mining utilises Application-Specific Integrated Circuits (ASIC).

These devices are specially designed to perform a single task, and when applied to cryptocurrency mining, they far outperform the other mining techniques.

ASIC miningASIC miningAn application-specific integrated circuit miner is a device that is designed for the sole purpose of mining

ASIC performance capabilities mean only a select few can afford to use this mining technique, potentially putting miners utilising CPU and GPU techniques at risk of being pushed out of the market.

It is possible an ASIC monopoly could take over cryptocurrency mining as hardware becomes more readily available, raising questions surrounding its viability and long-term impact on the cryptocurrency market alongside more traditional techniques.

Cryptocurrency mining techniques are catered for the individual and their specific circumstances, so there is no clear-cut best approach for mining.

A smaller set up relying on less computing power, a single or smaller conglomerate and a smaller financial investment may sway towards cloud or CPU mining.

A large investment, high-powered tech and a dedicated team are more likely to be able to sustain GPU or ASIC mining setups.

Mining: Method

FAQ

How do you mine for cryptocurrency?
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There are four main methods most programmers use to mine cryptocurrency – cloud mining, CPU mining, GPU mining and ASIC mining. The choice between the four mining depends on budget and how hands-on a miner wants to be.

What is cloud mining?
arrow arrow

Cloud mining is an automated process usually relying on a third party with the required computer systems powerful enough to perform at the standard required to solve massive mathematical tasks. Miners often pay companies to rent out their mining machine, or rig, to perform the mining for an arranged contractual period.

What is CPU mining?
arrow arrow

CPU mining played a significant role in cryptocurrency mining during its infancy and is still utilised today, but to a lesser extent. A growing need for processing capabilities means the technique’s utilisation of single processors is fast becoming redundant.

What is GPU mining?
arrow arrow

GPU mining is the most popular method of cryptocurrency mining today, combining elements of cloud and CPU mining for wider access. GPU miners are like the professional cloud miners in that they use the same rigs, but on a much smaller scale.

What is ASIC mining?
arrow arrow

ASIC mining is perhaps the most powerful cryptocurrency mining technique, and generally unattainable for the average aspiring cryptocurrency miner. Rather than using multi-use technology designed for application to all sorts of different tasks, like rigs used for CPU or GPU mining, the ASIC mining utilises Application-Specific Integrated Circuits (ASIC). These devices are specially designed to perform a single task, and when applied to cryptocurrency mining, they far outperform the other mining techniques.

What is the best mining method?
arrow arrow

Cryptocurrency mining techniques are catered for the individual and their specific circumstances, so there is no clear-cut best approach for mining. A smaller set up relying on less computing power, a single or smaller conglomerate and a smaller financial investment may sway towards cloud or CPU mining. A large investment, high-powered tech and a dedicated team are more likely to be able to sustain GPU or ASIC mining setups.

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