How to start mining 2020 from scratch?

How are cryptography and currencies related?

Cryptocurrency is called virtual money, the creation (issue) and redistribution of which cryptographic functions and protocols are widely used. In particular, one or more hashing functions are used to generate blocks of data, and a public key encryption protocol is used to create anonymous addresses (accounts) and transfer coins. This approach gives cryptocurrency fundamentally new properties that traditional (fiat) currencies and specialized means of online payments, such as WebMoney and Yandex.Money, lack.

Who creates cryptocurrency?

Right now, everyone is creating it. The source codes are on GitHub, and most altcoins are similar to each other like twins - both at the algorithm level and in wallet design. Most of these crafts have nothing behind them other than a recognizable name. For example, there are cryptocurrencies named after Putin and Trump.

Cryptocurrency named after V.V. Putin

Why did everyone rush to mine cryptocurrency?

Information sites about cryptocurrencies and thousands of videos on YouTube have appeared. They tell you in detail how to start mining, and are understandable even to a housewife. Convenient wallets for all popular operating systems and online storage of cryptocurrency savings, multi-currency exchanges and pools, affordable investment funds (with investments from 0.001 BTC) and easy-to-learn miners were created.

As a result, the barrier to entry has dropped sharply over the past year. If earlier for successful mining you had to search and analyze a lot of information yourself, launch and configure (or better yet, write) console programs and scripts in Linux, now there are applications with a graphical interface that do almost everything themselves. We will look at several such programs in a separate article.

What is cryptocurrency mining in simple words

There are three main ways to receive bitcoins:

• buying bitcoins on the exchange,
• accepting them for goods and services,
• cryptocurrency mining.

Of course, you can also trade and earn bitcoins on a crypto exchange. If you are interested, then you can find out which cryptocurrency exchange is best to cooperate with - here.

Mining is the process of adding transaction records to a Bitcoin “public ledger” called the blockchain.

What is blockchain (simple explanation for 5 year olds!)

The blockchain exists so that every transaction can be confirmed and every user on the network can access the entries in the “ledger.” This is used to distinguish valid Bitcoin transactions from fraudulent attempts to re-spend money that has already been spent previously.

Mining is the process of keeping records of Bitcoins, carried out using computers. At its core, mining is very similar to accounting. The miner installs a special program for accounting bitcoins on his computer and keeps the computer always connected to the Internet. For this, miners receive a reward in the form of bitcoins.

The blockchain is a kind of public “ledger” that stores a record of every Bitcoin transaction. Internet user has access to this book .

You can view the latest transactions in real time here: www.blockchain.com/explorer.

Blockchain is so called because it is literally a chain of blocks (“chain” or chain is translated from English as “chain”), which are lists of transactions completed over a certain time. When a block of transactions is generated, miners put it through a process that we will describe below.

The mining program applies a complex mathematical formula to the generated block of transactions, calculating for each block a seemingly random sequence of letters and numbers called a “hash.”

A hash is a unique sequence of random numbers of a fixed length.

Here is an example hash code: 7DD987F846400079F4B03C058365A4869047B4A0

A hash not only consists of transaction block information, but also uses some other pieces of data. While it is relatively easy to create a hash from a set of data, it is almost impossible to know what data was used to create that hash. Moreover, each hash is unique, and changing just one character in a block completely changes the hash.

No matter how much data is used as input, the hash will always be the same length. Therefore, the hash works like a digital wax seal.

If someone tampers with even one block of transactions, the hash will immediately change, as will all subsequent hash sequences on the blockchain. This way, every attempt at fraud on the Bitcoin network will be easily detected by everyone who uses it.

How does Bitcoin mining work for 5 year olds?

Essentially, miners serve the crypto community by confirming every transaction on their computers and ensuring that each one is legitimate. They all compete with each other using software written specifically for mining.

When a new block of cryptocurrency is “closed,” it means that the miner has successfully created the correct hash sequence. For this, the miner receives a reward.

Now I will explain everything as if you were 5 years old:

1. Nikita owes Misha 10 BTC. Nikita announces that he is sending Misha 10 BTC to the Bitcoin network.
2. Miners take this information and encrypt it. This is called hashing. To this information they add additional information about the transaction and hash it too.
3. More and more transaction information is then added and hashed until there is enough to form a cryptocurrency block .
4. Miners then add a new block to the blockchain. In fact, only one miner out of all can add a new block, and the selection of the lucky miner is carried out by a complex algorithm. Miners compete with each other for the opportunity to add a new block to the blockchain.
5. Once a new block is added, all other miners check the transaction information in that block. They check the entire blockchain to ensure that the new information matches the old.
6. If everything is correct, then the new block is recognized as valid and is finally added to the block chain. This is called confirmation.
7. The lucky miner receives a cash reward for “closing” the block.
8. And only after this Misha receives 10 BTC from Nikita.

As you can see, everything is not so complicated. The difficulty is created by incomprehensible terminology, which applies exclusively to bitcoins and is not found anywhere else. It is worth adding that the miner does not perform all these operations independently. Instead, operations are performed by a special mining program.

You have to understand that it is very easy to create a hash from a set of data and computers are very good at this. To prevent users from arbitrarily hashing thousands of blocks of transactions and easily mining Bitcoins, the mining process is deliberately made more difficult. This is why cryptocurrency mining is not such a simple matter. The total number of bitcoins is limited, so the more coins or coins are mined, the more valuable each of them becomes.

Attention! Many people often confuse the two concepts of the cryptocurrency world – coin (coin) and token. A coin (coin) is an independent cryptocurrency that is based on its own blockchain. In turn, a token is also a cryptocurrency, but it is based on a “foreign”, ready-made blockchain, which is why it is more dependent on other cryptocurrencies. All the largest cryptocurrencies are independent currencies, including Ethereum, Bitcoin, Monero and others.

Tokens and coins, altcoins and cryptocurrencies: what is the difference (short and simple!)

Why have cryptocurrencies become popular only now?

Initially, cryptocurrency was just an unusual idea that attracted geeks and technophiles with the aroma of high-tech anarchy. Today, virtual coins suddenly turned out to be needed by a wide mass of people. Mainly because they are now offering real money, goods and services for them. Moreover, this is done not only by some seedy cafes and entertainment sites, but also by large companies like Dell and Microsoft - see the box at the end of the article.

In the more than eight years since the advent of Bitcoin, investors have seen in it and its analogues a cyberpunk remake of securities. They created an entire cryptocurrency industry in which they invested billions of dollars in the hope of quickly making even more. In 2009, they didn’t give a penny for a bitcoin (at the first auction it cost 0.00076 cents), but today they are willing to pay two and a half thousand dollars or even more for one BTC. At least, these are the exchange rates at the time of writing this article.

By the beginning of July this year, other cryptocurrencies also began to rise in price - according to the growth in cash injections, interest in them also increased.

Rating of the best cryptocurrencies for mining and investment

The first cryptocurrency appeared back in 2009. At that time, crypto money was not in great demand, so Bitcoin did not attract much attention. However, after a few years they begin to buy and sell it on exchanges. This leads to the emergence of new altcoins and forks of old coins - cryptocurrencies that appeared by dividing the network, for example Bitcoin Cash (BCC) and Ethereum Classic (ETC).

Now, at the beginning of 2020, there are already more than 3,500 cryptocurrencies.

Not all cryptographic currencies have become popular, so some of them are worth nothing and are not suitable for investment. To ensure that investments in cryptocurrencies bring more profit, we offer a rating of cryptocurrencies 2020.

Data for the table was collected from CoinMarketCap.com

It is not surprising that the first two lines are occupied by Bitcoin and Ethereum - they are still firmly in their positions and do not seem to be going to give them up. But everything is clear with them today, so we look at points 3 to 12 - this will be our TOP 10 cryptocurrencies by capitalization.

Many people have probably heard about some of these altcoins (Ripple, Litecoin, Dash, Monero), but only a few have heard about them (Stratis, Waves). In any case, these currencies currently have the highest capitalization, which means they are relevant and in demand, and the likelihood that they will be scammed tomorrow (yes, this can also happen) is extremely low.

Altcoins are now beginning to actively take over the market and many players are looking in their direction, starting to slowly change Bitcoin, which does not have the best effect on its percentage of the total market capitalization.

Catch the wave!

According to two major analytical agencies (IDC and Gartner), the current wave of hype around cryptocurrency began in the third quarter of 2020. Then there was a sharp increase in sales of video cards. It is especially noteworthy that it arose against the backdrop of a decline in the personal computer market. Shipments of video cards grew by more than a third, while shipments of motherboards and processors fell by 4–5%. The conclusion suggests itself: in most configurations several video cards were used, which is typical for “farms”.

“Farms”, or rigs (from the English rig - installation), are homemade clusters with a large number of video cards, which are used as accelerators of vector operations. Usually these are assemblies made from different-sized hardware with a weak processor (since it is little involved in calculations) and a large number of gaming video cards. They are connected to the same motherboard via extension cables - PCI-E slot risers and PCI-E x1 - x16 adapters. This is cheaper than using top-end E-ATX motherboards with a bunch of full-fledged slots and professional accelerators. All the same, the additional functions of advanced cards are in little demand in mining. With the money saved, it is more profitable to connect another video card or buy a better power supply.

Among such installations there are absolutely masterpieces - compact, quiet and energy efficient. Everything in them is done with reserve, the power supply and water cooling systems are thought out in detail, and in general they look like blocks of a supercomputer. Typically, such clusters are assembled to order to solve some serious problems in the field of business, design or scientific research, and mining is carried out only during downtime.

Seven top video cards with shared water cooling. Photo: tomglimps.com

Most typical farms are home-made, assembled according to the principle of maximum economy. Energy efficiency, electromagnetic compatibility of components, stability of operation, wear rates, acoustic comfort - all this remains beyond the perception of the miner who has taken up the construction of the farm. He simply buys more or less suitable hardware with all his money (often used and having hidden defects), and then assembles it on a homemade frame, since it will not fit into any case.

Typical homemade farm

Before you estimate the profit from operating such a farm in a month, or even more so in six months, think about why they sell so many of them. If you trace the dynamics of prices on the same avito.ru, you will notice how quickly they are getting cheaper. The “farmer” will willingly show how many altcoins or dollars his creation “brings” daily, and then try to sell it to you... well, at least for some amount.

How to mine cryptocurrency? (Mining options)

Step-by-step instructions for mining are presented below:

1. It is necessary to assemble the equipment:

• Video card (GPU). It's better if there are several of them.

Fact! Video cards must be selected taking into account their main characteristics. Hash rate is important.

• A computer that has a cooling system. RAM more than 4 GB.
• Selected operating system.
• Good internet signal.

2. Select a specific cryptocurrency. Popular:

• Bitcoin and Litecoin (but cannot be mined with a graphics card).
• Ethereum, Monero.

3. Select a server for mining (pool). There are many of them, differing from each other in their characteristics:

power component.

• Protection.
• Settings.
• Ping.
• Commission (about 1%), etc.

Recommended pools:

• dwarfpool.com;
• nanopool.org;
• www2.coinmine.pl.

4. Selected wallet or exchange. Cryptocurrency accumulation will be carried out on this resource. Before choosing any of the servers, you should read the reviews in detail.

One of the options is mining without investment. This means you don’t have to buy expensive equipment and don’t have to worry about installing it and setting it up. This is called cloud mining. The bottom line is that there is an investment of funds, similar to rent. But it differs in that the equipment itself will not be located at home.

All manipulations: settings, connection are carried out by the service. This is a remote mining method.

The advantage is the ability to use not just one equipment, but several. Also suitable for those who have difficulty with the technical part of the equipment. Its assembly and configuration. In addition, this will save time. But here you need to be careful and not run into scammers.

When the method is chosen and everything is ready, you can start mining!

Why are farms being sold?

The main reason for the craze for farms and their subsequent resale lies in banal self-deception. People are lazy to calculate the total cost of ownership, limiting themselves to estimating electricity bills only based on the TDP of video cards. In reality, in mining, a video card often consumes significantly more than is specified in the requirements for the cooling system. And in the “expenses” column all costs associated with mining should be reflected. These are direct one-time costs (purchase, delivery, configuration of equipment and software), direct regular costs (payment for electricity, Internet, rent of premises) and indirect costs (changing the operating mode of the split system, deterioration of working conditions due to noise, etc.).

Continuation is available only to members

Option 1. Join the “Xakep.ru” community to read all materials on the site

Membership in the community within the specified period will give you access to ALL Hacker materials, increase your personal cumulative discount and allow you to accumulate a professional Xakep Score rating! More details

Where to start mining?

First, visit the NonStopMining website and meet people who have been doing this successfully for a long time.

NonStopMining is a dedicated team of miners that specializes in cryptocurrency mining.

Why is it beneficial to be our partner?

From a financial and ease of participation point of view:

• Around the clock, continuously and indefinitely, you receive absolutely passive income from cryptocurrency mining.
• You do not need to have special knowledge and skills regarding mining and cryptocurrency in general.
• You don’t fool your head about where and what is the best way to buy mining equipment.
• By purchasing any of the pools, you do not need to think about the premises for installing the farm.
• You don't pay for electricity, rent, etc. Everything is already included in the price of the pools.
• You save yourself from mandatory duty/monitoring 24/7 near the equipment.

From a development perspective:

• You become a full-fledged and equal partner, with the opportunity to develop the direction together, anywhere in the world.
• You will 100% receive useful knowledge and experience regarding cryptocurrency, mining and smart investments in general.
• By collaborating with a trending direction that actually has real activities with an actual basis for making a profit - you can forget about various dubious pyramid projects, HYIPs, pseudo-Forex, etc...
• You have in your hands an excellent and promising business direction that you can safely offer to your loved ones and friends.

Do you need reliable passive income WITHOUT the risk of HYIPs? You've come to the right place. Just watch the video below and you will understand everything for yourself.

NonStopMining - join us!

We have selected the best cryptocurrencies by capitalization from 3,500 tokens. Many of them showed a huge increase in value in 2017, but went into a deep correction in 2020. They aroused high interest from the public. Together with you, we will find out which crypto is best to invest money in 2020.

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