Every now and then we hear about mining. Its a growing trend in Pakistan and we have now seen investors getting into this. We are approached every now and then on the topic and if its feasible in Pakistan. This is a harder question to answer. It really depends on what hardware you are using, what crypto you are mining is it ASIC ready crytpo or ASIC resistant coin or asset. To understand this further I decided to cover this in length followed by a few general questions that we get in Pakistan through email. This blog will first cover all mining details followed by do’s and dont’s.
What is Mining?
Well in simple terms its cpu, gpu, asic working towards solving a mathematical problem. The first computer that solves the problem gets rewarded, while also securing the network. There are 2 major flavors of this POW or proof of work, and POS or proof of stake there are others such as POI (Proof of Importance) or POB (Proof of burn). I will mostly cover POW and then a bit on POS. But basically miners are the one that make sure that a transaction has happened by including them in a block.
History of Bitcoin Mining:
It is important to understand why mining was invented and how it benefits the users of crypto currency. To understand this we have to look at bitcoin mining first. Satoshi we believe envisioned not only that currency control should be decentralized and distributed but wanted a fair way of distributing the rewards, while ensuring longevity of the crypto itself. In the early days a common question was what happens when the 21 million bitcoin are mined? and this was answered that at that time the cost of bitcoin might be so much that it will sustain the transfers over just the mining fees itself.
While at that time it looked like a long shot most people would just startup the original bitcoin wallet and start cpu mining form it. Every block that was discovered would be rewarded by 50 btc. As the price started increasing people came out with software that would use gpu and its power to mine bitcoin this gave it advantage over cpu in terms of speed. This was followed by ASICS and pooled mining.
There are still coins that can be mine which are cpu only a list can be found here http://cpucoinlist.com/ not sure if they are still feasible, I had written an old blog on how to mine with cpu http://bitinfo.today/cpu-mining/ some of the things maybe outdated but you should be able to search the updated pools and updated software form the coins website. I dont recommend this but if its something you want to use to learn about mining its a good way to start and learn how it works. While all algorithms can be mined with cpu and gpu, you will be left in the dust if you are competing on mining algorithms that are asic friendly. Look in to CryptoNight, Brypt, Prime Constellations, Scrypt-YAC and Dcrypt there maybe others but these the coins that you must look at to mine with cpu.
GPU software was the second step in this evolution where developers found a way to mine the GPU. This allowed for faster speeds and is still very popular in coins such as zcash, etherium and etherium classic. This is still very popular way of mining and if you have expensive electricity this maybe the only possible way to mine. Most people are doing this now a days. In Pakistan we see many people investing in this. The most popular coins that are being mined right now are ethereum and siacoin if you are doing dual mining. However this brings the temperature up for the rig so its better to either single coin or if you live in cold area.
To be continued……