Our last article “What Mining for Gold in the 1800s Can Teach You About Mining for Cryptocurrency Today” discussed setting up a mining operation. Here, we’ll discuss tools you need at first and later once other miners flock to your mining space.
Getting started with the appropriate tools.
Once a 19th-century gold prospector decided where to mine, he then had to stock up on the right tools for the job. For a one-man operation, that would include a shovel, a pick and a pan.
Similarly, crypto miners need three main items to begin crypto mining: an online wallet, a powerful computer and the software that best suits their goals, which is typically free. CGMiner is an especially popular choice for Bitcoin mining, while Minergate enables you to mine for various non-Bitcoin currencies, such as Ethereum (ETH) or Monero (XMR), both mentioned in our previous article on crypto mining.
You undoubtedly already have access to another important item for crypto mining: electricity. Crypto mining requires more electricity than your normal daily life, so be sure to factor this into your ongoing costs.
Then upgrade your tools.
Despite the familiar image of frontiersmen panning for gold, pans were quickly traded for rocker boxes, sometimes called “cradles” because of their size and shape, which filtered out light sand and soil from the heavier gold. In fact, prospectors could choose from all manner of low and high-tech tools to suit whatever version of mining they pursued, such as Long Toms (discussed in our earlier article), which were highly effective for small groups of men working together. Larger company-driven operations even used hydraulics to dislodge gold from rock so they would literally hit “pay dirt.”
Early crypto miners typically used the most basic version of the tool needed for the job: the personal computers they already owned–the equivalent of gold miners’ pans. Once the crypto miner verified a block of cryptocurrency transactions, they received crypto tokens in exchange, the only way new cryptocurrency is generated. As cryptocurrency attracted more attention, so did crypto mining, creating more competition–1 million Bitcoin miners are operating today by one estimate. So all miners need to work more quickly to verify transactions first to receive crypto tokens.
To offer the speed crypto miners needed, “application-specific integrated circuit chips” (ASIC), which has about 100 billion times the capability of personal computers, hit the market. ASIC is to crypto mining today what hydraulics was to gold mining back then. Advanced hardware, like ASIC, makes mining Bitcoin, in particular, possible, and typically costs $1,000-$2,000. Graphics processing unit cards (GPU) costs hundreds rather than thousands and can augment personal computers to mine non-Bitcoin cryptocurrencies.
Keep in mind, just like hydraulics-using gold-mining companies made mining more difficult for solo miners to compete, now crypto miners have professional mining centers to contend with.
Next up.
Our final article in this series is coming soon, all about money and mining!