Cryptocurrency trading and mining are becoming more popular every day. This, in addition to trading gold and investing in real estate, is one of the most common ways people try to earn extra money for the future of themselves and their families. Well, let’s go in order.
What are cryptocurrencies?
It is virtual money that exists only in longitudinal form. There are over a thousand different currencies on the market of which Bitcoin is the most popular and most valuable. Bitcoin was released in 2009 and was considered to be very successful if its value was equal to the US dollar. However, Bitcoin has long since surpassed that value and soared to heights. Its current market value is over $ 60,000. Despite the fact that this is the most valuable currency, many others such as Litecoin, Neo, Ethereum, Ripple, and many others should not be neglected.
This digital money is based on the blockchain principle, which makes it especially secure for use and transactions because the presence of a third party is not required. Also, there is no central authority.
What can you do with cryptocurrencies?
You can spend them, of course. But to spend them, you have to buy them and multiply them. How can this be achieved? There are two ways to do this – trading and mining. Trading is, many say, simpler and is usually an option for those just starting out with this investment. All you need to do is go to the nearest ATM or exchange office and buy cryptocurrencies that you will store in your digital wallet, no matter if it is hot or cold. A warm recommendation from experienced investors is to use a cool, hardware wallet as this will protect your money from hacker attacks. For trading, it is enough to have a mobile phone and internet access, to choose the platform through which you will do it and the fun can begin.
On the other hand, we have mined. However, many are skeptical about mining, because it seems complicated. Is it really and what is it that in some way repels investors? On reviewsxp.com you can find out more, but also in the text below.
Several types of mining
To get started with mining, you need to know some basics. Namely, there are three types of mining: CPU, GPU, and ASIC. Whatever type you decide upon, that look can be further enhanced by the type of shutter hinges used. Theoretically, you can use the CPU of your computer to mine bitcoin, but in practice, it is very slow and makes no sense in today’s market. That is why it is very often necessary to invest money in equipment, which many, especially those who have just entered the world of investing, are not very happy about. However, if you want to succeed, you will have to do it to increase the hash rate in order to be able to solve bitcoin algorithms, ie transaction blocks, and thus make money.
ASIC (Application Specific Integrated Circuits) is specifically designed to do only one thing: bitcoin miners at a staggering rate with relatively low power consumption. Because these chips have to be specifically designed for the task, they are extremely expensive and time-consuming to produce – but they win at speed.
- High electricity costs
It is known that mining, in addition to equipment, also increases electricity consumption. This is another reason why people give up this type of investment and try to make money.
- Hash rate
The hash rate is the number of operations your hardware can perform every second it tries to break a math problem. The rate is measured in megahash, gigahash and terahash per second (MH / s, GH / s, TH / s). The higher the hash rate (compared to the average rate), the greater the chances of resolving the transaction block. The wiki page where the comparisons were made is a great place to look at the difference in hardware.
- Profitability calculation
This is very useful to know at the outset. Before you start shopping, you can calculate the costs, and even calculate how much you can earn, to keep when you cover the investment costs. So, in the calculator, you can enter parameters such as hardware price, hash speed, power consumption, and the current value of bitcoin in the market.
- Mining pool
If you are a solo player, mining is not for you. Why do we say that? Because you have very little chance of achieving greater success if you do not join one of the mining pools.
- A lengthy process
Many give up mining because it requires a lot of time. It is a big mistake if you think that you will make money quickly, and it is even bigger if you think that you can achieve it with a bad computer. The point is to be the first to hit successfully, not the second, third, tenth.
- Not every cryptocurrency is for mining
Trading is possible with any currency, and mining only with a single one. So inquire before you buy them.
Cryptocurrency mining and trading is a great way to make money if you put in the effort, time, and money. If we look at this as a kind of gambling, there is a possibility that you will lose. Therefore, the best advice someone can give you is to enter only as much as you are willing to lose and not to affect the quality of your life. It is also useful to invest smaller amounts in several different cryptocurrencies so that if one starts to lose value, you do not lose all the money you have invested. If your choice falls on trading, do not hesitate to find one of the many applications that use artificial intelligence to monitor the state of the market and inform you of any changes. This is especially useful for those who do not have much free time or have not yet mastered the world of trading. In any case, you can’t even win if you don’t take risks, it doesn’t matter if it’s trading or mining.