Blockchain mining explained: all the key aspects

The mining activity, especially for Bitcoin, in the last 2 years has had a crazy increase. This continues to rise in conjunction with the cryptocurrency’s increase in price. The purpose of this site is to make the blockchain mining explained.

 Cryptography

When we talk about mining we refer to the activity carried out using specific hardware. These thanks to a high-energy consumption can solve the complex mathematical calculations. These calculations hide behind the cryptography of our cryptocurrencies and thus allow to “coin new coins” adding new blocks to the blockchain chain.

The mining activity, especially for Bitcoin, in the last 2 years has had a crazy increase that continues to rise in conjunction with the currency’s increase in price.

Why mining attracts so much?

Because it actually consists of a passive income. This activity infact allows having a fixed monthly income without spending the whole day to dedicate it. However, this is a highly technical area and therefore before embarking on this world one must be aware of the various implications.

Several Cryptocurrencies, many different algorithms

First thing to know is that now there are several cryptocurrencies, many of which have different cryptographic algorithms. For each algorithm,a specific type of hardware offers best performances. For example, for the Bitcoin,  specific solutions for the corresponding algorithmcalled Antminer exist since several years.

Secondly, the initial investment to make is considerable.

The expenses

The main expenses to face for those who want to enter this world are essentially two:

1. The expenses concerning the hardware. After the last yearboom, several components (such as NVIDIA or AMD video cards) are almost impossible to find and the price increased in many cases by 70% or 80%. Furthermore, must take into account the cost for secondary components such as the cooling system and all theaccessory components. Consider also that the average life of components is between 24 and 36 months, because the intensive usage leads to premature wear.
2. The cost of electricity. This vary a lot, depending on the country of residence.

Blockchain mining explained

For a first rough calculation on the profitability of mining, there are several sites. Whattomine is currently the most accurate. However, it is important to point out that the calculations are highly variable, according to price and algorithm difficulty.