Cryptocurrency mining in 2022 in questions and answers
What is virtual currency, who are miners, and why do they buy video cards? ” Healthy Food Near Me” tells simply about the complex

Mining (from the English mining – mining) earnings of cryptocurrency due to the capacity of the equipment. People who are engaged in this activity are called miners, they use the power of personal computers or specialized farms to earn money. The equipment works with hashing, selecting it for transactions that are in the system. Hashing means entering information of any length and size in the original string and returning the result of a fixed length given by the hash function algorithm. In the context of cryptocurrencies such as Bitcoin, transactions after hashing at the output look like a set of characters of a length determined by the algorithm.

Healthy Food Near Me, together with a systems engineer from an international IT company, Ahmed Azhazh, revealed this issue in detail, from its origins to the present day. This material has been compiled for informational purposes only. We strongly recommend that you approach the issue of earning in this way with all caution and care. Before starting, we recommend that you understand the configuration of the equipment and its technical features. Also, once again, we remind you of the possible risks. If you are financially literate and familiar with the peculiarities of the market, then perhaps this type of income is just for you.

History of cryptocurrency mining

The first miner was the creator of bitcoin, Satoshi Nakamoto. Information is circulating on the Web that before the launch, he secretly managed to mine a large fortune. However, these are just rumors. According to official information, Satoshi was able to mine only 750 coins. The pioneers mined “crypto” using the central processor of a computer. This method turned out to be ineffective, since large capacities were required. So the era of video cards and ASIC boards began. As for the latter, entire companies have been opened in the USA that specialize in the production of this equipment. In particular, we are talking about ASICminer, Avalon and Butterfly Labs.

Every year they update the lineup to keep up with the development of technology. Mining equipment has come a long way and continues to develop and improve to this day. Today, most professional miners invest heavily in GPU and ASIC farms, as well as in mining conditions, cooling system and uninterruptible power supply. Technology does not stand still and history is being written every day.

How cryptocurrency mining works

The process of mining cryptocurrency is quite entertaining. The equipment of the participants in the “digital race” searches for a certain number from a huge array of information. These are not some abstract tasks, but in particular confirmation of transactions (transfers) of funds within the system. These tasks are formed into blocks. Decryption of information in the block is carried out by the selection method – for this, the system needs such gigantic computing power. The miner himself, even if he has large hardware capacities, cannot find such a number.

That is why single systems are combined into mining pools, which are a server that distributes the tasks of finding the number among all participants. In this system, everything is very transparent and understandable. You can track absolutely any transaction. The only information that remains hidden from prying eyes is the data of wallet owners.

What does it take to successfully mine cryptocurrencies?

To begin with, you should draw up a detailed business plan, the key point of which will be electricity. This resource largely determines the economic benefits of the process. Also, if you want to install a whole farm, then you need to solve the issue of soundproofing and cooling, because without this the equipment will quickly become unusable. Accordingly, there must be a large area. This is true if you want to start mining immediately in large volumes. At home, a video card is enough. However, the choice must be approached with all seriousness and awareness. You will need to buy exactly the equipment that will guarantee the greatest efficiency with the lowest maintenance costs. It is also worth choosing equipment that will be technically “too tough” – after all, it must be regularly monitored for smooth operation.

Home computer hardware

For each cryptocurrency, it is worth selecting components individually. We have compiled a generalized set, which is quite universal. So, to assemble a rig with your own hands, you need:

  • Six to eight video cards,
  • Motherboard,
  • CPU,
  • RAM,
  • physical memory,
  • Power Supply,
  • Risers,
  • Wi-Fi adapter,
  • Корпус.

In addition to the number of video cards, their quality also affects the efficiency of digital money mining. The optimal requirements are as follows: DDR 5 memory, at least 2 GB, 256-bit bus. For example, for Ethereum mining, the expert recommends equipment from NVIDIA and AMD.

Specialized equipment

This category includes ASIC miners (they are ASICs). The principle of operation of these devices is to optimize calculations according to a special algorithm. These devices have a huge hashrate. Their appearance completely replaced the miners on video cards from the SHA-256, Scrypt, X11, Qubit and Quark algorithms. Other benefits of ASICs include fast startup, increased reliability, and no need for constant updates.

As for the shortcomings, then they should write down the problems with the repair and the limitedness of the supported algorithms. In addition, the noise level from the ASIC is quite high. This means that it is better to place it in a separate room.

Expert Council

For mining at home and small volumes, I would strongly recommend using video cards. Firstly, they can be used to mine absolutely any cryptocurrency. ASIC miners are only able to mine a few types. In addition, the price threshold of the latter is quite high. Not everyone can afford to spend several hundred thousand rubles to build a farm at home. Video cards are much cheaper. However, they will also require a more careful attitude. Also a nice bonus will be the fact that video cards are very liquid in the secondary market. If the market suddenly collapses, part of the funds can be easily returned.

What cryptocurrencies exist in 2022?

According to currency.com¹, there are currently 7 different cryptocurrencies. Most of them are not very popular. The most popular accounts for about 800% of capitalization. Among themselves, all cryptocurrencies are divided by type, use and value.

There are four popular types of cryptocurrencies:

  • Proof of Work (PoW). This type is based on the concept that the unit must have proof of completion of a predetermined task. This concept is based on Blockchain technology. This type includes Bitcoin and Ethereum.
  • Proof of Stake (PoS). These cryptocurrencies are based on the concept of providing proof that legitimizes a unit of cryptocurrency. The process is fundamentally different from PoW. This type includes Dash, Eos and Tron.
  • Tokens. These digital tools are for certain limited purposes. For example, they are used to buy digital assets.
  • Stablecoins. They function as assets that store value. Their value does not change. Tether is considered the largest stablecoin today. Next on the list are Gemini, Paxos and TrueUSD.

In addition to the above assets, there are also central bank digital currencies, governance tokens, and privacy coins. The former are digital versions of the USD and EUR currencies, the latter are designed to give users a say in decision-making, and the third are to ensure the anonymity of transactions. As for “altcoins”, they are not a special type of cryptocurrency. It is simply an alternative name for all coins except Bitcoin.

Expert advice: which cryptocurrency to invest in?

It is unlikely that there will be a person who can give an unambiguous answer to this question. In the last six months alone, several hundred cryptocurrencies have disappeared from the market forever. If we consider this issue in the long term, it is best to focus on the top five. In particular, Bitcoin, Ethereum, Litecoin, XRP and Tether. Please note that these are not permanent assets. Their prices fluctuate regularly, be sure to keep an eye on market trends. If you intend to regularly play on the value of assets, then take a closer look at those cryptocurrencies that are showing rapid growth. For example, in 2020, the Cardano currency grew by 2400%, and Polkadot by 1000%.

Is it legal to mine cryptocurrency?

Over the past five years, legislators have tried everything to do with digital assets. In particular, the following options were proposed: “Legalize mining and turnover on the territory of the Federation”, “Prohibit and establish fines, as well as prison terms”, “Issue a national cryptocurrency”, “Wait until these assets become illiquid”.

Let’s take a look at what we have today. On July 23, 2020, President Vladimir Putin signed the bill “On Digital Financial Assets”², which defines the concept of cryptocurrency, but prohibits its use to pay for goods and services. Accordingly, mining and asset trading are not prohibited.

As for the world situation, the authorities are actively seeking to establish control over the situation. They are struggling with the development of analog money and anonymity in every possible way. However, in many countries, the cryptocurrency was recognized as a means of payment, somewhere – a unit of account, somewhere – a commodity, and somewhere – an investment or virtual asset.

How to evaluate the profitability and risks of mining?

Today, there are a lot of services on the network for calculating the effectiveness of a device in realities. For example, the calculator from NiceHash³ is ideal for this purpose. He will make an approximate forecast based on the data entered.

Here is the approximate profitability of mining several devices of different power, with a hypothetical bitcoin exchange rate of $ 20, taking into account electricity costs of 000 rubles (since tariffs change all the time, the price of electricity is conditional) per kWh:

  • Antminer S19 pro 110 Th / s (terahesh / second) – 22 rubles per month.
  • Antminer S9 13.5 Th / s (terahesh / second) – 500 rubles per month.
  • Whatsminer M30S 86 Th / s (terahesh / second) – 16 rubles per month.

The main risk in mining is associated with constant fluctuations in the exchange rate of mined coins. If you mine bitcoin or altcoins, a fall in the exchange rate can be fraught with a critical decrease in profits, so much so that electricity costs will exceed earnings. Apart from this, there are also some technical risks, as cryptocurrency mining equipment is a very complex device. You need to carefully check the counterparty from which you buy equipment, its history and reviews. Beware of buying on non-core used equipment sites. From the legal point of view, there are no dangers.

Expert Council

The main difficulties for a novice miner arise at the very beginning. Choosing equipment and forecasting profitability are difficult steps best done under the supervision of more experienced comrades. For my part, I would advise you to turn to people who already have experience in this area. If there are no such acquaintances, then thematic forums will always come to the rescue..

Popular questions and answers

Answers the questions of Healthy Food Near Me Ahmed Ajaj, systems engineer at an international IT company.

Is it safe to practice
As mentioned earlier, the process is fully legalized on the territory of the Federation. The only dangers that lie in wait for the miner are domestic issues. In particular, we are talking about the high noise level from ASIC miners. It is better to choose a suitable room in advance or warn the neighbors. I also strongly do not recommend following the path of some craftsmen who connect to the network bypassing metering devices. This practice is punishable. These practices have been repeatedly recorded on the territory of the Federation.
How not to lose virtual money?
I would recommend immediately withdrawing funds after mining coins, as the market rate is constantly changing. The withdrawal fee depends on the frequency of transactions, the selected coins and the conversion method. For example, a direct transfer of income to a bank card account with the ability to cash out at any time is the most reliable and expensive option. The user is required to issue documents for the tax office. An easy way to cash out cryptocurrency is to register on one of the crypto exchanges. A user account with linked data of bank cards and cryptocurrency wallets allows you to convert coins, earn on exchange rate differences and withdraw digital funds anonymously.
Is mining possible without investments?
It all depends on the volumes you are targeting. For mining, the most ordinary PC is also suitable. However, the profit from it will be cheap. Accordingly, if you consider this process as passive income, then the answer is yes, it is possible. If you decide to approach the matter thoroughly and assemble a rig or even a small farm, then the minimum investment will be from 100 to 300 thousand rubles.

Pros and cons of cryptocurrency mining

Ease of start. It is difficult to find a person who would not like to earn extra money without extra effort. For this reason, mining has become so popular in the Federation.
It is enough to purchase equipment, assemble a farm and install software. All that remains is to press start to initiate the mining process.
A variety of currencies and a constant change in the exchange rate allow you to choose the most profitable vector.
Cryptocurrencies obtained by mining can be easily sold, receiving in return the currency of popular payment systems such as QIWI, Webmoney, PayPal and others. VISA / Mastercard bank cards are also a popular direction of exchange.
Risks associated with the purchase of equipment and constant market fluctuations.
The need for start-up capital and a high level of investment. So, the equipment that made a profit a couple of years ago is illiquid today. The cost of new devices has increased several times
Mining takes a lot of electricity. Now in total miners burn more electricity than the inhabitants of Iceland, Ireland and Nigeria combined
  1. https://currency.com/ru
  2. http://www.consultant.ru/document/cons_doc_LAW_358753
  3. https://www.nicehash.com/profitability-calculator?lang=ru

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