How To Mine Cryptocurrencies

CRYPTO MINING SIMPLIFIED

We want the average Ghanaian to understand or at least have an idea of how crypto mining works and how to benefit from it hence we’re not going to go too deep into technical stuff. Lets use Bitcoin as our example.

Bitcoin Mining Simplified

1 bitcoin is currently worth $1000 +

Bitcoin is digital currency. In Ghana, the closest local example we can think of is mobile money.

Just like mobile money, bitcoin transactions are performed and recorded on superfast computers and servers.

Mtn for example owns such computers which they use for recording transactions (hence the fees they charge)

Bitcoin however is not owned or regulated by any single entity hence relies on computational power from its users for storing and processing bitcoin transactions. The users in turn earn bitcoin for renting out computational power. This is what is known as bitcoin mining.

You can either buy your own mining hardware or purchase mining contracts from companies with huge specialized mining rigs known as mining farms.

At surface level, the mining process is similar for most cryptocurrencies and presently almost all mining farms have the equipment and contracts for all the profitable cryptocurrencies like Bitcoin, Ethereum and Dash.

TAKE A LOOK AT THESE CALCULATIONS BELOW

There are a number of mining farms but from extensive research hashflare is the mining farm we recommend. Their reviews are mostly positive and their fees are low. In the example above, 50 Terahertz of hashing power was purchased at 6000$. The investment will generate an estimated $400 -$500 monthly and will breakeven in approximately a year. All proceeds thereafter is profit. Based on current projections, keeping it running for at least 4 more years after breaking even will generate an estimated profit of $22,416 (GHC 100,872) by then (probably more).

That’s not all. Since 2009 the value of bitcoin has risen exponentially. Many who invested early have made thousands/millions in profit. The value of currency like Bitcoin and Ethereum are still expected to rise over the next few years so you could be making 10 times more profit than projected. All profit will be sent to your respective crypto wallets or to your bitcoin wallet which you can trade for local currency via online exchanges. (Read our post on Our Favorite Cryptocurrency Wallets and Exchanges.)

These companies also run an affiliate program so your investment does not need to come solely out of pocket and not all at once. You can build up your mining portfolio over time. Hashflare gives you 10% of whatever hashpower your friend purchases using your ref link every time they buy hash power. These companies also give out coupons and discounts on occasion so get involved today.

* hash power is simply computational power used in mining cryptocurrencies.

Types of mining hardware/contracts used to mine cryptos

Different hardware is used to mine different currencies and the mining contracts often bear the names of these hardware

SHA 256 is used in mining Bitcoin

Scrypt is used to mine litecoin

X11 is used in mining Dash

Ethhash is used in mining ethereum

Bitcoin is further along in price and mining difficulty, this is why a lot of investors are turning to altcoins (other cryptocurrencies) like Dash and Ethereum. And for good reason too because when calculating return on investment for these 3, Dash is currently the most profitable to mine (takes less time to breakeven & has higher ROI). You can calculate your return on investment (estimated profit) for any cryptocurrency you intend to mine, using the cryptocompare crypto mining profitability calculator.

Another way to make money on cryptocurrency is to trade them (buy and hold some early on when the price is low then sell when prices rise). You can buy and sell cryptocurrencies on exchanges like, localbitcoins, remitano, bitpanda etc and trade cryptocurrency on exchanges like bitrex, poloniex etc. Check out Our Favorite Crypto Wallets & Exchanges.

Investing in cryptocurrency is high risk, high reward, but this is mostly true if you buy very early on. Take care to spread out your capital over a number of ventures if you take this approach in order to hedge your risk. Cryptocurrency markets are highly news driven. You are trading assets in a very fast paced world where new developments are released every day and the political/regulatory setting is still uncertain. If you want to make money trading cryptos, you really need to make sure that you keep yourself up to date about the latest news and developments, both for the coins you are trading and for the industry as a whole. Below are some trusted news sources/useful resources on the crypto world.

http://bitcoin.com/

http://www.coindesk.com/

Cryptoverse

https://bitcointalk.org/

https://cryptocointalk.com/

http://coinmarketcap.com/

The best thing about bitcoin/crypto mining is unlike other etf’s and cfd’s like stock and forex trading, you’re not buying currency and selling it at a profit. You’re actually buying what produces the currency. Your own personal mint of sorts. So regardless of price changes and market fluctuations you keep mining/producing bitcoin/cryptocurrency which you can hold and sell at considerable profit when prices are up.

BEING A CRYPTO MINER IS SPECIAL ALSO BECAUSE YOU’RE CONTRIBUTING TO A TECHNOLOGY THAT’S BREAKING BARRIERS AND CHANGING LIVES ALL OVER THE WORLD

Start mining Bitcoin, Ethereum, Dash and other cryptocurrencies with one of our recommended cloud mining services today.