{"appState":{"pageLoadApiCallsStatus":true},"articleState":{"article":{"headers":{"creationTime":"-12-20T12:34:53+00:00","modifiedTime":"-07-01T19:36:57+00:00","timestamp":"-09-14T18:18:20+00:00"},"data":{"breadcrumbs":[{"name":"Business, Careers, & Money","_links":{"self":"https://dummies-api.dummies.com/v2/categories/"},"slug":"business-careers-money","categoryId":},{"name":"Personal Finance","_links":{"self":"https://dummies-api.dummies.com/v2/categories/"},"slug":"personal-finance","categoryId":},{"name":"Cryptocurrency","_links":{"self":"https://dummies-api.dummies.com/v2/categories/"},"slug":"cryptocurrency","categoryId":}],"title":"Make More Money Mining Cryptocurrency: 10 Ways to Boost ROI","strippedTitle":"make more money mining cryptocurrency: 10 ways to boost roi","slug":"make-more-money-mining-cryptocurrency-10-ways-to-boost-roi","canonicalUrl":"","seo":{"metaDescription":"Want to see more return from your cryptocurrency mining efforts? Use these ten tips to make more money as a cryptocurrency miner.","noIndex":0,"noFollow":0},"content":"In the cryptocurrency mining space, revenue is important, and profit is critical. You do not want to spin your computational hash cycles for zero gain, and you want your investment of time, mining hardware, electricity, and other expenses to pay off. These ten tips will help you become profitable and receive a return on investment (ROI) in your <a href=\"https://www.dummies.com/personal-finance/investing/cryptocurrency-mining-for-dummies-cheat-sheet/\" target=\"_blank\" rel=\"noopener\">cryptocurrency mining</a> adventure.\r\n<h2 id=\"tab1\" >Do your homework before you start mining</h2>\r\nDoing plenty of research and study prior to jumping into the cryptocurrency mining space in any capacity is crucial. It&#;s a complicated arena, with plenty of room for error, and cryptocurrency mining is not a quick walk in the park.\r\n\r\nIf the mining gear you plan to acquire and deploy is not profitable or the market is in the midst of a large downturn, you may be much better off simply buying the underlying cryptocurrency asset you intend to mine from an exchange.\r\n\r\nSetting up hardware and software can be complicated, too, in particular if you decide to build a GPU mining rig from the ground up! Before you start, study.\r\n<p class=\"article-tips remember\">There is no rush! It&#;s better to take your time and get everything right than to jump in without being fully prepared and lose money. Better in fact, if your research leads you to not mine cryptocurrency, than if you do little research, jump right in, and fail. If the cryptocurrency markets survive and is no short-term fad, you have plenty of time to get in and mine. And if they don&#;t? Well, you haven&#;t lost anything, have you?</p>\r\n\r\n<h2 id=\"tab2\" >Time your entry into the cryptocurrency mining world</h2>\r\nThere are good and bad times for cryptocurrency mining. For example, during the bitcoin and cryptocurrency market boom in , mining hardware was practically sold out from many of the original mining equipment manufacturers.\r\n\r\nMuch of the most efficient and cost-effective (profitable) <a href=\"https://www.dummies.com/personal-finance/investing/what-you-need-for-mining-cryptocurrency/\" target=\"_blank\" rel=\"noopener\">cryptocurrency mining equipment</a> was being resold on second-hand marketplaces at prices above the brand-new-from-a-manufacturer price, virtually eliminating any projected gains of mining with that gear.\r\n\r\nAnd, of course, the market declined dramatically starting in late December , and still, at the time of writing, has not fully recovered. (It&#;s still around three to four times its post-December low, though.)\r\n\r\nWhile December would have appeared, to many outsiders, to be a great time to get into cryptocurrency mining, the conditions were actually quite poor, and hardware speculators were extracting as much out of the market as they possibly could.\r\n<p class=\"article-tips tip\">Often, in the bitcoin and cryptocurrency space as with many traditional markets, the best time to enter into the fray may be when the perceived outlook is the worst.</p>\r\nDuring these market downturns, <a href=\"https://www.dummies.com/software/other-software/10-great-ways-use-bitcoin/\" target=\"_blank\" rel=\"noopener\">bitcoin</a> and other cryptocurrencies may trade at a reduced rate, and profitable mining hardware may hit second-hand marketplaces at steep discounts. You may be able to acquire hardware directly from manufacturers during this time as well.\r\n\r\nBaron Rothschild, an 18th-century member of the infamous banking family, reportedly said that you should &#;Buy when there&#;s blood in the streets, even if the blood is your own.&#; What he meant is that it&#;s a good time to buy when a market is crashing; you&#;ll buy the assets cheaply, and they&#;ll recover eventually.\r\n\r\nThe timing of your entrance into the cryptocurrency mining space may very well determine your success. However, you may not want to wait too long, as the old cryptocurrency adage goes: &#;The best time to mine (or buy) cryptocurrency was ten years ago, the second-best time is now.&#;\r\n<h2 id=\"tab3\" >Play the cryptocurrency markets</h2>\r\nMany cryptocurrency miners increase their profits by actively <a href=\"https://www.dummies.com/personal-finance/investing/short-term-analysis-methods-for-cryptocurrency-investing/\" target=\"_blank\" rel=\"noopener\">trading on exchanges</a>, even buying on one exchange and selling on another, exploiting the differences in prices between exchanges in a form of arbitrage.\r\n\r\nHowever, this subject is totally different from cryptocurrency mining, of course, requiring different skill sets, knowledge, and strategies.\r\n\r\nIn many cryptocurrency markets, trading provides needed liquidity, and traders help absorb some of the volatility. Keep in mind that tax liabilities are likely incurred from actively trading. However, a few smart trades a year can multiply profits significantly, and if you do have a tax liability, that may be a good thing (it shows you have made gains on your trades!).\r\n\r\nOnce the conversion has been made from mined cryptocurrency to local fiat currency, the mining ROI calculations for those mined cryptocurrency rewards are locked in.\r\n<p class=\"article-tips warning\">While quickly trading for fiat-based returns is an effective strategy for some miners to boost their ROI, it isn&#;t recommended for everyone. Tread and trade lightly.</p>\r\n\r\n<h2 id=\"tab4\" >Identify low hash rate alternative cryptocurrencies</h2>\r\nIf your ROI and profit calculations for the cryptocurrency you are mining show that you&#;re losing money, you have another option beyond mining through the downturn or shutting down your mining equipment and taking the loss on hardware investments. You can switch cryptocurrencies.\r\n\r\nMiners often study the mining profitability on other cryptocurrency blockchains to see whether they&#;d fare better mining a less popular cryptocurrency. Just because your current cryptocurrency market is in trouble, it doesn&#;t mean all cryptocurrency mining is unprofitable at the same time.\r\n\r\nYou may be able to find a more profitable cryptocurrency. In fact, it&#;s often possible to find a smaller cryptocurrency that offers a better ROI than the larger, better known cryptocurrencies.\r\n<p class=\"article-tips tip\">These smaller cryptocurrencies generally have a lower price per coin on the exchanges, but price per coin is not an indication of profitability. What counts is how much equipment and electricity you need to use to mine each dollar&#;s worth of the coin.</p>\r\nSmaller cryptocurrencies also have lower network hash rates, which means you can contribute a larger percentage of the hash rate and gain a larger percentage of the mining rewards. So, the coins you mine are worth less, but you will likely mine more of them.\r\n\r\nSo keep an eye on other cryptocurrency markets, in particular the ones that you <em>can </em>mine. That is, if you&#;re mining with ASICs, you don&#;t need to watch all the other markets, just the other cryptocurrencies that work with the algorithm your ASIC was designed to mine.\r\n\r\nIf you&#;re mining with a GPU rig, your choices are broader. You will have the flexibility to mine many different cryptocurrencies, using many different algorithms, on low hash rate cryptocurrencies. You&#;ll want to watch what&#;s going on with these other cryptocurrency markets, and of course, before you jump, you&#;ll need to run the numbers and see whether they work for you.\r\n<p class=\"article-tips warning\">Be careful, however, as many small market value and hash rate cryptocurrencies do not have the type of blockchain security that other cryptocurrencies boast. Smaller cryptocurrencies also tend to lose value over time, and may experience significant price fluctuations, so you&#;ll want to be quick on your feet. Get in when it makes sense, get out when things start to go badly.</p>\r\n\r\n<h2 id=\"tab5\" >Mine the start of a chain</h2>\r\nMining a brand new cryptocurrency can sometimes be very profitable (and, like everything in cryptocurrency, sometimes not).\r\n\r\nWhen a new cryptocurrency is launched, there is often a short period of euphoria, during which all the promises and hype of the launchers serve to pump up interest in the new currency. Typically, despite their propagators&#; best efforts, the new currency does not last, or at least does not remain valuable.\r\n\r\nHowever, some of these new <a href=\"https://www.dummies.com/personal-finance/the-structure-of-blockchains/\" target=\"_blank\" rel=\"noopener\">blockchains</a> may have significant value for the first few days after launch, possibly even months, as originally the coins on these cryptocurrencies are inherently scarce (assuming there isn&#;t a large pre-mine associated with it), and traders may value them at a premium.\r\n<p class=\"article-tips tech\">A pre-mine is what those in the cryptocurrency space call a cryptocurrency blockchain that was launched with coins already in existence from nonmining activities, typically though a crowd sale, initial coin offering (ICO), or other early adopter distribution method. Pre-mined cryptocurrencies have been criticized by the mining community as being unfair and unfriendly to miners.</p>\r\nExtreme early mining profitability has been the case for a few different coins in the past, including Zcash, Grin, and many others. You can see the example of Zcash in the CoinMarketCap chart below. In the first few hours of the cryptocurrency&#;s life, it reached more than $5,000; within a couple of days, it was worth a tenth of that value.\r\n\r\n[caption id=\"attachment_\" align=\"aligncenter\" width=\"556\"]<img class=\"wp-image- size-full\" src=\"https://www.dummies.com/wp-content/uploads/cryptocurrency-mining-zcash-trading.jpg\" alt=\"CoinMarketVCap Zcash trading\" width=\"556\" height=\"417\" /> This CoinMarketCap chart shows the first few days of Zcash trading.[/caption]\r\n\r\n \r\n\r\nThis kind of profile is very common. Here&#;s a little experiment for you. Go to <a href=\"http://www.coinmarketcap.com/\" target=\"_blank\" rel=\"noopener\">CoinMarketCap</a> and experiment with a few charts. Pick some of the smaller, less popular cryptocurrencies and look at their charts.\r\n\r\nAdjust the date range to the first week or two, or month or two perhaps, of the cryptocurrency&#;s life, and you&#;ll frequently see the same kind of profile. In the image below, for example, you can see the first two months of WAX&#;s life. It started out around $4.60 to $5 a coin, but declined to around 50 cents within a couple of days.\r\n\r\n[caption id=\"attachment_\" align=\"aligncenter\" width=\"556\"]<img class=\"wp-image- size-full\" src=\"https://www.dummies.com/wp-content/uploads/cryptocurrency-mining-wax-trading.jpg\" alt=\"CoinMarketCap WAX trading\" width=\"556\" height=\"417\" /> This CoinMarketCap chart shows the first two months of WAX trading.[/caption]\r\n\r\n \r\n\r\nThus, mining a brand-new cryptocurrency can (sometimes) be very profitable if you&#;re there right at the start. You can mine with GPUs, or even CPUs in some cases, as ASICs have not yet had the time to develop for their algorithm (unless, that is, the new cryptocurrency is using an existing, ASIC-developed, algorithm, of course).\r\n\r\nUnfortunately for many newly created cryptocurrency systems, healthy network effects and other aspects of a successful cryptocurrency are difficult to create, so many tend to lose value against other assets and local fiat currency over longer periods of time, or even fairly quickly. (Refer to the image above; WAX started high, but dropped within a couple of days.)\r\n\r\nHowever, there may still be an opportunity in some of these systems for enterprising miners who may be able to direct their computational hash power toward the chain early and quickly exchange their rewards for other more proven systems as well as for local fiat currency. (You&#;ll want to sell off your new coins within minutes or hours in some cases.)\r\n<h2 id=\"tab6\" >Start small with crypto mining</h2>\r\nThe best way to test out the waters in any business endeavor, and particularly in the cryptocurrency mining industry, is to start small. This is especially true for beginners new to the space; you have a lot to learn, so your first mine will be a big experiment.\r\n\r\nStarting small also makes any losses less painful, of course. If you don&#;t manage to create a profitable mine, your losses are limited. Starting small is a great way to build the skill sets and learn the lessons needed, discovering what works well and what may not. Once you have everything figured out, <em>then </em>you can scale up.\r\n<h2 id=\"tab7\" >Scale choices</h2>\r\nRapidly expanding in the cryptocurrency space can lead to many unforeseen issues, such as increased burn rate and an evaporated runway. However, you can scale your mining operation using other methods that may not involve getting large amounts of additional mining equipment online at your home, business, or other facility.\r\n\r\nSome miners scale by replacing aging equipment, which in many cases, due to hardware efficiency gains, can result in significant increases in hash rate while maintaining similar, or even lower, energy expenditures, which would increase mining profits and possible hasten ROI.\r\n\r\nOther miners may choose to use hash-rate market places to purchase mining capability from willing sellers. Another method to scale mining operations quickly is cloud mining where individuals can purchase large chunks of hash rate for their favorite cryptocurrency or algorithm from companies that specialize in managing mining equipment for miners.\r\n\r\nAny of these options are decent choices for expansion, but some of them come with inherent third-party risk. Do some profitability calculations to identify the risks of growing too quickly before diving into large new deployments of cryptocurrency mining equipment.\r\n<h2 id=\"tab8\" >Find cheap electricity for cryptocurrency mining</h2>\r\nInexpensive electricity is very important for cryptocurrency mining endeavors because electricity is often the largest operational expenditure involved in cryptocurrency mining. Reduce your electricity cost, and you increase your profit, of course. Every dollar saved in electricity is a dollar that goes directly to your &#;bottom line.&#;\r\n\r\nSome mining equipment may be profitable running in one place, but not in another, simply due to the difference in electricity costs between both locations. Some areas of the world have significant seasonal fluctuations in electricity prices, so there are even examples of nomadic cryptocurrency miners who move their operations periodically to take advantage of inexpensive and excess energy. Migratory miners!\r\n\r\nMany enterprising miners have increased ROI by accessing energy resources that would otherwise go unused, with very little to no cost associated with them, in order to save significantly on electrical costs. These miners have resorted to capturing natural gas prior to being flared, excess hydroelectric capacity, wind, solar, or even geothermal energy.\r\n\r\nSince mining equipment typically runs 24/7, it has electrical load characteristics, such as a high load factor, which some electrical utilities will provide discounts for.\r\n<p class=\"article-tips tech\">An electrical load factor is a measure of electrical utilization rate over a given period of time. The equation for load factor is (average monthly load in kW)/(peak monthly load in kW) and is normally provided in percent.</p>\r\nFor example, if an S9 was running all month and didn&#;t shut off (as mining equipment typically does) and its peak load was 1.6kW, the load factor would be 100 percent: [(1.6 kW/1.6 kW) * 100 percent].\r\n\r\nIf you are running the equipment only half the time during the month, the load factor would be 50 percent: [(0.8 kW/1.6 kW) * 100 percent].\r\n\r\nSo it&#;s worth talking to your utility about the best rates they can provide, to see what rates would be tailored to the type of load pattern (a load factor that is close to 100 percent) that is inherent to most mining operations.\r\n\r\nIn some cases, it may even make sense for a miner to run mining rigs only during low-cost electricity periods during the day. But run the numbers carefully.\r\n<p class=\"article-tips remember\">Obviously it means you&#;ll mine less cryptocurrency, and you need to understand the effect on profitability when taking into account the capital costs of your equipment; run just half the day, and you&#;re doubling the time it takes to pay for that equipment.</p>\r\nFor example, one miner recently switched to a new, hybrid residential/industrial rate that his electric utility introduced, which provides rates similar to industrial rates, saving him 20 to 40 percent on his energy costs compared to average residential rates in his area.\r\n\r\nThis plan is a ToD (time of day plan) that saves money for people with high load factors &#; people who are running at a pretty steady, high load throughout the month.\r\n\r\nIf you&#;re like most electricity consumers, you have no idea you had choices, right? You simply pay the bill they send you each month. But spend a little time digging through your utility&#;s rate structure and spend some time talking to them, and you may be surprised what you find.\r\n\r\nThis really is a huge issue, in particular for miners who get beyond the hobbyist stage. Large, professional mines are all about finding cheap energy!\r\n<h2 id=\"tab9\" >Cool your mining equipment efficiently</h2>\r\nMining equipment creates a lot of heat, but you can mitigate this heat exhaust or even use it to your advantage, to increase overall ROI.\r\n\r\nSome miners spend a lot of money running expensive air-conditioning systems to cool cryptocurrency mining hardware to datacenter temperature levels. However, cryptocurrency mining hardware is equipped with large heat sinks and powerful fans and is typically rated for higher temperatures than sensitive data servers (such as web servers) being held in datacenters.\r\n\r\nThis is a little scary for people who are used to the idea that computer equipment has to be cooled significantly. However, some miners really do play this game, running their equipment at higher temperatures.\r\n\r\nMany miners in Texas (not the coolest place in the world) do not use cooling equipment and don't mind the rigs&#; intake air being just regular ambient temperature, which means a high temperature in that state. Tyler has his mining rigs running in 50 to 70 degrees Fahrenheit air during the winter, and 70 to 90 degrees Fahrenheit in the summer.\r\n\r\nIn fact, ASIC chips are often rated to run at high temperatures. For example, Bitmain recommends that its ASICs run in an ambient air temperature of 15 to 35 degrees Celsius, or 59 to 95 degrees Fahrenheit. (The company also claims in their documentation that the chips themselves can operate at temperatures as high as 127 degrees Celsius, or 271 degrees Fahrenheit. Don&#;t touch them!)\r\n<p class=\"article-tips tip\">Miners may also avoid high cooling costs by operating in cooler climates and by circulating outside air through and out, bringing the temperature down to the outside ambient temperature.</p>\r\nIn cold climates, mining equipment may be used to heat rooms in homes or businesses. Mining equipment can even be spread around a home, comfortably heating multiple rooms rather than baking one single room.\r\n\r\nThe drawback is that the gear is often very noisy. Even in a basement, you may be able to hear it upstairs. Some miners, however, have using liquid cooling and a heat exchanger to cool their equipment, which also quietens it.\r\n\r\nConsider that if you heat your house with your mining equipment, you&#;re reducing the cost of heating your house. You normally won&#;t see this in your profitability calculations, though you may want to add your personal-heating savings to the profit to find your true profit.\r\n\r\nBut you would not want to include this number when calculating your taxes. In general, you can most likely count this reduction in personal expenses as a nice little bonus that the Internal Revenue Service doesn&#;t need to know about. (Talk to your tax advisor!)\r\n\r\nSome miners have even used immersion cooling for their hardware, using mineral oil or other engineered fluids as a dielectric insulator to protect equipment from electrical faults and to easily dissipate heat.\r\n\r\nMineral oil conducts thermal energy well but doesn&#;t conduct electricity, so electrical mining equipment can be submerged into it and operate fine without failure. Miners then cool this fluid with thermal exchangers to dissipate the excess heat from the dielectric fluid.\r\n\r\nWhichever strategy you end up using for cooling your mining equipment, reducing cooling costs as much as possible is an effective way to boost ROI.\r\n<h2 id=\"tab10\" >Score hardware deals</h2>\r\nMining equipment hardware will be your largest capital investment. Being able to recognize and take advantage of savings on the original acquisition of the mining equipment is a great way to reduce your initial cost and ensure a quick ROI on that investment.\r\n\r\nSo you need to be a good shopper. Search online marketplaces, such as Craigslist, eBay, Amazon, NewEgg, and others to keep an eye out for discounted cryptocurrency mining hardware. Before buying a particular piece of equipment, do a quick search engine query and see whether you can find it cheaper. Have a really good understanding of what different types of equipment can and should cost.\r\n<p class=\"article-tips warning\">Use equations and online tools to find out whether that hardware is indeed profitable before buying, but be careful, as even these calculations can be misleading. Second-hand hardware may not be feasible to run in the long term due to market conditions changing, such as cryptocurrency exchange price, block difficulty, and increased network hash rate. Often deals that appear too good to be true may very well be; they may be great today, but have a short operational life.</p>\r\nIf you&#;re on the hunt for the latest and greatest hardware, be prepared to pay a premium for the most efficient and highest hash rate mining devices. Run the numbers, and you&#;ll sometimes see that you&#;re better off using less efficient equipment that costs you less.\r\n\r\nAlso, sometimes it is best to buy new pieces of mining gear straight from the manufacturer to avoid unnecessary middleman price markups. Tread lightly with mining hardware acquisition, as it is likely to be the most significant contributor to your initial investment and the choices you make early on in your mining endeavor will greatly affect your ROI going forward.","description":"In the cryptocurrency mining space, revenue is important, and profit is critical. You do not want to spin your computational hash cycles for zero gain, and you want your investment of time, mining hardware, electricity, and other expenses to pay off. These ten tips will help you become profitable and receive a return on investment (ROI) in your <a href=\"https://www.dummies.com/personal-finance/investing/cryptocurrency-mining-for-dummies-cheat-sheet/\" target=\"_blank\" rel=\"noopener\">cryptocurrency mining</a> adventure.\r\n<h2 id=\"tab1\" >Do your homework before you start mining</h2>\r\nDoing plenty of research and study prior to jumping into the cryptocurrency mining space in any capacity is crucial. It&#;s a complicated arena, with plenty of room for error, and cryptocurrency mining is not a quick walk in the park.\r\n\r\nIf the mining gear you plan to acquire and deploy is not profitable or the market is in the midst of a large downturn, you may be much better off simply buying the underlying cryptocurrency asset you intend to mine from an exchange.\r\n\r\nSetting up hardware and software can be complicated, too, in particular if you decide to build a GPU mining rig from the ground up! Before you start, study.\r\n<p class=\"article-tips remember\">There is no rush! It&#;s better to take your time and get everything right than to jump in without being fully prepared and lose money. Better in fact, if your research leads you to not mine cryptocurrency, than if you do little research, jump right in, and fail. If the cryptocurrency markets survive and is no short-term fad, you have plenty of time to get in and mine. And if they don&#;t? Well, you haven&#;t lost anything, have you?</p>\r\n\r\n<h2 id=\"tab2\" >Time your entry into the cryptocurrency mining world</h2>\r\nThere are good and bad times for cryptocurrency mining. For example, during the bitcoin and cryptocurrency market boom in , mining hardware was practically sold out from many of the original mining equipment manufacturers.\r\n\r\nMuch of the most efficient and cost-effective (profitable) <a href=\"https://www.dummies.com/personal-finance/investing/what-you-need-for-mining-cryptocurrency/\" target=\"_blank\" rel=\"noopener\">cryptocurrency mining equipment</a> was being resold on second-hand marketplaces at prices above the brand-new-from-a-manufacturer price, virtually eliminating any projected gains of mining with that gear.\r\n\r\nAnd, of course, the market declined dramatically starting in late December , and still, at the time of writing, has not fully recovered. (It&#;s still around three to four times its post-December low, though.)\r\n\r\nWhile December would have appeared, to many outsiders, to be a great time to get into cryptocurrency mining, the conditions were actually quite poor, and hardware speculators were extracting as much out of the market as they possibly could.\r\n<p class=\"article-tips tip\">Often, in the bitcoin and cryptocurrency space as with many traditional markets, the best time to enter into the fray may be when the perceived outlook is the worst.</p>\r\nDuring these market downturns, <a href=\"https://www.dummies.com/software/other-software/10-great-ways-use-bitcoin/\" target=\"_blank\" rel=\"noopener\">bitcoin</a> and other cryptocurrencies may trade at a reduced rate, and profitable mining hardware may hit second-hand marketplaces at steep discounts. You may be able to acquire hardware directly from manufacturers during this time as well.\r\n\r\nBaron Rothschild, an 18th-century member of the infamous banking family, reportedly said that you should &#;Buy when there&#;s blood in the streets, even if the blood is your own.&#; What he meant is that it&#;s a good time to buy when a market is crashing; you&#;ll buy the assets cheaply, and they&#;ll recover eventually.\r\n\r\nThe timing of your entrance into the cryptocurrency mining space may very well determine your success. However, you may not want to wait too long, as the old cryptocurrency adage goes: &#;The best time to mine (or buy) cryptocurrency was ten years ago, the second-best time is now.&#;\r\n<h2 id=\"tab3\" >Play the cryptocurrency markets</h2>\r\nMany cryptocurrency miners increase their profits by actively <a href=\"https://www.dummies.com/personal-finance/investing/short-term-analysis-methods-for-cryptocurrency-investing/\" target=\"_blank\" rel=\"noopener\">trading on exchanges</a>, even buying on one exchange and selling on another, exploiting the differences in prices between exchanges in a form of arbitrage.\r\n\r\nHowever, this subject is totally different from cryptocurrency mining, of course, requiring different skill sets, knowledge, and strategies.\r\n\r\nIn many cryptocurrency markets, trading provides needed liquidity, and traders help absorb some of the volatility. Keep in mind that tax liabilities are likely incurred from actively trading. However, a few smart trades a year can multiply profits significantly, and if you do have a tax liability, that may be a good thing (it shows you have made gains on your trades!).\r\n\r\nOnce the conversion has been made from mined cryptocurrency to local fiat currency, the mining ROI calculations for those mined cryptocurrency rewards are locked in.\r\n<p class=\"article-tips warning\">While quickly trading for fiat-based returns is an effective strategy for some miners to boost their ROI, it isn&#;t recommended for everyone. Tread and trade lightly.</p>\r\n\r\n<h2 id=\"tab4\" >Identify low hash rate alternative cryptocurrencies</h2>\r\nIf your ROI and profit calculations for the cryptocurrency you are mining show that you&#;re losing money, you have another option beyond mining through the downturn or shutting down your mining equipment and taking the loss on hardware investments. You can switch cryptocurrencies.\r\n\r\nMiners often study the mining profitability on other cryptocurrency blockchains to see whether they&#;d fare better mining a less popular cryptocurrency. Just because your current cryptocurrency market is in trouble, it doesn&#;t mean all cryptocurrency mining is unprofitable at the same time.\r\n\r\nYou may be able to find a more profitable cryptocurrency. In fact, it&#;s often possible to find a smaller cryptocurrency that offers a better ROI than the larger, better known cryptocurrencies.\r\n<p class=\"article-tips tip\">These smaller cryptocurrencies generally have a lower price per coin on the exchanges, but price per coin is not an indication of profitability. What counts is how much equipment and electricity you need to use to mine each dollar&#;s worth of the coin.</p>\r\nSmaller cryptocurrencies also have lower network hash rates, which means you can contribute a larger percentage of the hash rate and gain a larger percentage of the mining rewards. So, the coins you mine are worth less, but you will likely mine more of them.\r\n\r\nSo keep an eye on other cryptocurrency markets, in particular the ones that you <em>can </em>mine. That is, if you&#;re mining with ASICs, you don&#;t need to watch all the other markets, just the other cryptocurrencies that work with the algorithm your ASIC was designed to mine.\r\n\r\nIf you&#;re mining with a GPU rig, your choices are broader. You will have the flexibility to mine many different cryptocurrencies, using many different algorithms, on low hash rate cryptocurrencies. You&#;ll want to watch what&#;s going on with these other cryptocurrency markets, and of course, before you jump, you&#;ll need to run the numbers and see whether they work for you.\r\n<p class=\"article-tips warning\">Be careful, however, as many small market value and hash rate cryptocurrencies do not have the type of blockchain security that other cryptocurrencies boast. Smaller cryptocurrencies also tend to lose value over time, and may experience significant price fluctuations, so you&#;ll want to be quick on your feet. Get in when it makes sense, get out when things start to go badly.</p>\r\n\r\n<h2 id=\"tab5\" >Mine the start of a chain</h2>\r\nMining a brand new cryptocurrency can sometimes be very profitable (and, like everything in cryptocurrency, sometimes not).\r\n\r\nWhen a new cryptocurrency is launched, there is often a short period of euphoria, during which all the promises and hype of the launchers serve to pump up interest in the new currency. Typically, despite their propagators&#; best efforts, the new currency does not last, or at least does not remain valuable.\r\n\r\nHowever, some of these new <a href=\"https://www.dummies.com/personal-finance/the-structure-of-blockchains/\" target=\"_blank\" rel=\"noopener\">blockchains</a> may have significant value for the first few days after launch, possibly even months, as originally the coins on these cryptocurrencies are inherently scarce (assuming there isn&#;t a large pre-mine associated with it), and traders may value them at a premium.\r\n<p class=\"article-tips tech\">A pre-mine is what those in the cryptocurrency space call a cryptocurrency blockchain that was launched with coins already in existence from nonmining activities, typically though a crowd sale, initial coin offering (ICO), or other early adopter distribution method. Pre-mined cryptocurrencies have been criticized by the mining community as being unfair and unfriendly to miners.</p>\r\nExtreme early mining profitability has been the case for a few different coins in the past, including Zcash, Grin, and many others. You can see the example of Zcash in the CoinMarketCap chart below. In the first few hours of the cryptocurrency&#;s life, it reached more than $5,000; within a couple of days, it was worth a tenth of that value.\r\n\r\n[caption id=\"attachment_\" align=\"aligncenter\" width=\"556\"]<img class=\"wp-image- size-full\" src=\"https://www.dummies.com/wp-content/uploads/cryptocurrency-mining-zcash-trading.jpg\" alt=\"CoinMarketVCap Zcash trading\" width=\"556\" height=\"417\" /> This CoinMarketCap chart shows the first few days of Zcash trading.[/caption]\r\n\r\n \r\n\r\nThis kind of profile is very common. Here&#;s a little experiment for you. Go to <a href=\"http://www.coinmarketcap.com/\" target=\"_blank\" rel=\"noopener\">CoinMarketCap</a> and experiment with a few charts. Pick some of the smaller, less popular cryptocurrencies and look at their charts.\r\n\r\nAdjust the date range to the first week or two, or month or two perhaps, of the cryptocurrency&#;s life, and you&#;ll frequently see the same kind of profile. In the image below, for example, you can see the first two months of WAX&#;s life. It started out around $4.60 to $5 a coin, but declined to around 50 cents within a couple of days.\r\n\r\n[caption id=\"attachment_\" align=\"aligncenter\" width=\"556\"]<img class=\"wp-image- size-full\" src=\"https://www.dummies.com/wp-content/uploads/cryptocurrency-mining-wax-trading.jpg\" alt=\"CoinMarketCap WAX trading\" width=\"556\" height=\"417\" /> This CoinMarketCap chart shows the first two months of WAX trading.[/caption]\r\n\r\n \r\n\r\nThus, mining a brand-new cryptocurrency can (sometimes) be very profitable if you&#;re there right at the start. You can mine with GPUs, or even CPUs in some cases, as ASICs have not yet had the time to develop for their algorithm (unless, that is, the new cryptocurrency is using an existing, ASIC-developed, algorithm, of course).\r\n\r\nUnfortunately for many newly created cryptocurrency systems, healthy network effects and other aspects of a successful cryptocurrency are difficult to create, so many tend to lose value against other assets and local fiat currency over longer periods of time, or even fairly quickly. (Refer to the image above; WAX started high, but dropped within a couple of days.)\r\n\r\nHowever, there may still be an opportunity in some of these systems for enterprising miners who may be able to direct their computational hash power toward the chain early and quickly exchange their rewards for other more proven systems as well as for local fiat currency. (You&#;ll want to sell off your new coins within minutes or hours in some cases.)\r\n<h2 id=\"tab6\" >Start small with crypto mining</h2>\r\nThe best way to test out the waters in any business endeavor, and particularly in the cryptocurrency mining industry, is to start small. This is especially true for beginners new to the space; you have a lot to learn, so your first mine will be a big experiment.\r\n\r\nStarting small also makes any losses less painful, of course. If you don&#;t manage to create a profitable mine, your losses are limited. Starting small is a great way to build the skill sets and learn the lessons needed, discovering what works well and what may not. Once you have everything figured out, <em>then </em>you can scale up.\r\n<h2 id=\"tab7\" >Scale choices</h2>\r\nRapidly expanding in the cryptocurrency space can lead to many unforeseen issues, such as increased burn rate and an evaporated runway. However, you can scale your mining operation using other methods that may not involve getting large amounts of additional mining equipment online at your home, business, or other facility.\r\n\r\nSome miners scale by replacing aging equipment, which in many cases, due to hardware efficiency gains, can result in significant increases in hash rate while maintaining similar, or even lower, energy expenditures, which would increase mining profits and possible hasten ROI.\r\n\r\nOther miners may choose to use hash-rate market places to purchase mining capability from willing sellers. Another method to scale mining operations quickly is cloud mining where individuals can purchase large chunks of hash rate for their favorite cryptocurrency or algorithm from companies that specialize in managing mining equipment for miners.\r\n\r\nAny of these options are decent choices for expansion, but some of them come with inherent third-party risk. Do some profitability calculations to identify the risks of growing too quickly before diving into large new deployments of cryptocurrency mining equipment.\r\n<h2 id=\"tab8\" >Find cheap electricity for cryptocurrency mining</h2>\r\nInexpensive electricity is very important for cryptocurrency mining endeavors because electricity is often the largest operational expenditure involved in cryptocurrency mining. Reduce your electricity cost, and you increase your profit, of course. Every dollar saved in electricity is a dollar that goes directly to your &#;bottom line.&#;\r\n\r\nSome mining equipment may be profitable running in one place, but not in another, simply due to the difference in electricity costs between both locations. Some areas of the world have significant seasonal fluctuations in electricity prices, so there are even examples of nomadic cryptocurrency miners who move their operations periodically to take advantage of inexpensive and excess energy. Migratory miners!\r\n\r\nMany enterprising miners have increased ROI by accessing energy resources that would otherwise go unused, with very little to no cost associated with them, in order to save significantly on electrical costs. These miners have resorted to capturing natural gas prior to being flared, excess hydroelectric capacity, wind, solar, or even geothermal energy.\r\n\r\nSince mining equipment typically runs 24/7, it has electrical load characteristics, such as a high load factor, which some electrical utilities will provide discounts for.\r\n<p class=\"article-tips tech\">An electrical load factor is a measure of electrical utilization rate over a given period of time. The equation for load factor is (average monthly load in kW)/(peak monthly load in kW) and is normally provided in percent.</p>\r\nFor example, if an S9 was running all month and didn&#;t shut off (as mining equipment typically does) and its peak load was 1.6kW, the load factor would be 100 percent: [(1.6 kW/1.6 kW) * 100 percent].\r\n\r\nIf you are running the equipment only half the time during the month, the load factor would be 50 percent: [(0.8 kW/1.6 kW) * 100 percent].\r\n\r\nSo it&#;s worth talking to your utility about the best rates they can provide, to see what rates would be tailored to the type of load pattern (a load factor that is close to 100 percent) that is inherent to most mining operations.\r\n\r\nIn some cases, it may even make sense for a miner to run mining rigs only during low-cost electricity periods during the day. But run the numbers carefully.\r\n<p class=\"article-tips remember\">Obviously it means you&#;ll mine less cryptocurrency, and you need to understand the effect on profitability when taking into account the capital costs of your equipment; run just half the day, and you&#;re doubling the time it takes to pay for that equipment.</p>\r\nFor example, one miner recently switched to a new, hybrid residential/industrial rate that his electric utility introduced, which provides rates similar to industrial rates, saving him 20 to 40 percent on his energy costs compared to average residential rates in his area.\r\n\r\nThis plan is a ToD (time of day plan) that saves money for people with high load factors &#; people who are running at a pretty steady, high load throughout the month.\r\n\r\nIf you&#;re like most electricity consumers, you have no idea you had choices, right? You simply pay the bill they send you each month. But spend a little time digging through your utility&#;s rate structure and spend some time talking to them, and you may be surprised what you find.\r\n\r\nThis really is a huge issue, in particular for miners who get beyond the hobbyist stage. Large, professional mines are all about finding cheap energy!\r\n<h2 id=\"tab9\" >Cool your mining equipment efficiently</h2>\r\nMining equipment creates a lot of heat, but you can mitigate this heat exhaust or even use it to your advantage, to increase overall ROI.\r\n\r\nSome miners spend a lot of money running expensive air-conditioning systems to cool cryptocurrency mining hardware to datacenter temperature levels. However, cryptocurrency mining hardware is equipped with large heat sinks and powerful fans and is typically rated for higher temperatures than sensitive data servers (such as web servers) being held in datacenters.\r\n\r\nThis is a little scary for people who are used to the idea that computer equipment has to be cooled significantly. However, some miners really do play this game, running their equipment at higher temperatures.\r\n\r\nMany miners in Texas (not the coolest place in the world) do not use cooling equipment and don't mind the rigs&#; intake air being just regular ambient temperature, which means a high temperature in that state. Tyler has his mining rigs running in 50 to 70 degrees Fahrenheit air during the winter, and 70 to 90 degrees Fahrenheit in the summer.\r\n\r\nIn fact, ASIC chips are often rated to run at high temperatures. For example, Bitmain recommends that its ASICs run in an ambient air temperature of 15 to 35 degrees Celsius, or 59 to 95 degrees Fahrenheit. (The company also claims in their documentation that the chips themselves can operate at temperatures as high as 127 degrees Celsius, or 271 degrees Fahrenheit. Don&#;t touch them!)\r\n<p class=\"article-tips tip\">Miners may also avoid high cooling costs by operating in cooler climates and by circulating outside air through and out, bringing the temperature down to the outside ambient temperature.</p>\r\nIn cold climates, mining equipment may be used to heat rooms in homes or businesses. Mining equipment can even be spread around a home, comfortably heating multiple rooms rather than baking one single room.\r\n\r\nThe drawback is that the gear is often very noisy. Even in a basement, you may be able to hear it upstairs. Some miners, however, have using liquid cooling and a heat exchanger to cool their equipment, which also quietens it.\r\n\r\nConsider that if you heat your house with your mining equipment, you&#;re reducing the cost of heating your house. You normally won&#;t see this in your profitability calculations, though you may want to add your personal-heating savings to the profit to find your true profit.\r\n\r\nBut you would not want to include this number when calculating your taxes. In general, you can most likely count this reduction in personal expenses as a nice little bonus that the Internal Revenue Service doesn&#;t need to know about. (Talk to your tax advisor!)\r\n\r\nSome miners have even used immersion cooling for their hardware, using mineral oil or other engineered fluids as a dielectric insulator to protect equipment from electrical faults and to easily dissipate heat.\r\n\r\nMineral oil conducts thermal energy well but doesn&#;t conduct electricity, so electrical mining equipment can be submerged into it and operate fine without failure. Miners then cool this fluid with thermal exchangers to dissipate the excess heat from the dielectric fluid.\r\n\r\nWhichever strategy you end up using for cooling your mining equipment, reducing cooling costs as much as possible is an effective way to boost ROI.\r\n<h2 id=\"tab10\" >Score hardware deals</h2>\r\nMining equipment hardware will be your largest capital investment. Being able to recognize and take advantage of savings on the original acquisition of the mining equipment is a great way to reduce your initial cost and ensure a quick ROI on that investment.\r\n\r\nSo you need to be a good shopper. Search online marketplaces, such as Craigslist, eBay, Amazon, NewEgg, and others to keep an eye out for discounted cryptocurrency mining hardware. Before buying a particular piece of equipment, do a quick search engine query and see whether you can find it cheaper. Have a really good understanding of what different types of equipment can and should cost.\r\n<p class=\"article-tips warning\">Use equations and online tools to find out whether that hardware is indeed profitable before buying, but be careful, as even these calculations can be misleading. Second-hand hardware may not be feasible to run in the long term due to market conditions changing, such as cryptocurrency exchange price, block difficulty, and increased network hash rate. Often deals that appear too good to be true may very well be; they may be great today, but have a short operational life.</p>\r\nIf you&#;re on the hunt for the latest and greatest hardware, be prepared to pay a premium for the most efficient and highest hash rate mining devices. Run the numbers, and you&#;ll sometimes see that you&#;re better off using less efficient equipment that costs you less.\r\n\r\nAlso, sometimes it is best to buy new pieces of mining gear straight from the manufacturer to avoid unnecessary middleman price markups. Tread lightly with mining hardware acquisition, as it is likely to be the most significant contributor to your initial investment and the choices you make early on in your mining endeavor will greatly affect your ROI going forward.","blurb":"","authors":[{"authorId":,"name":"Peter Kent","slug":"peter-kent","description":"","hasArticle":false,"_links":{"self":"https://dummies-api.dummies.com/v2/authors/"}},{"authorId":,"name":"Tyler Bain","slug":"tyler-bain","description":"","hasArticle":false,"_links":{"self":"https://dummies-api.dummies.com/v2/authors/"}}],"primaryCategoryTaxonomy":{"categoryId":,"title":"Cryptocurrency","slug":"cryptocurrency","_links":{"self":"https://dummies-api.dummies.com/v2/categories/"}},"secondaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"tertiaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"trendingArticles":[{"articleId":,"title":"Repurposing Items for Beautiful Holiday 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Z-Table","slug":"how-to-use-the-z-table","categoryList":["academics-the-arts","math","statistics"],"_links":{"self":"/articles/"}}],"inThisArticle":[{"label":"Do your homework before you start mining","target":"#tab1"},{"label":"Time your entry into the cryptocurrency mining world","target":"#tab2"},{"label":"Play the cryptocurrency markets","target":"#tab3"},{"label":"Identify low hash rate alternative cryptocurrencies","target":"#tab4"},{"label":"Mine the start of a chain","target":"#tab5"},{"label":"Start small with crypto mining","target":"#tab6"},{"label":"Scale choices","target":"#tab7"},{"label":"Find cheap electricity for cryptocurrency mining","target":"#tab8"},{"label":"Cool your mining equipment efficiently","target":"#tab9"},{"label":"Score hardware deals","target":"#tab10"}],"relatedArticles":{"fromBook":[{"articleId":,"title":"10 Types of Cryptocurrency Mining 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Mining has evolved in many ways over the years, and miners have not stagnated during the process. Today's miners are keen to squeeze the most out of their rewards, especially for those affected by events like the halving of block rewards. With a desire to improve ROIs having never been higher, leading to many innovative ways that crypto and Bitcoin miners save money.
As you delve deeper into the Bitcoin Ecosystem, you will undoubtedly begin to hear more about an event called the halving. This term refers to a decrease in mining rewards by 50%. This decrease occurs roughly every four years and was built into the design of Bitcoin by Satoshi Nakamoto.
The original Bitcoin mining reward was 50 BTC. Of course, at that time, Bitcoin had very little value, and you could successfully mine the network on a regular PC. Since then, the mining rewards have consistently halved every four years until the current reward of 6.25 Bitcoin.
Today, hundreds of mining farms dedicate massive computational power to securing Bitcoin&#;s network. The value of the world's first cryptocurrency isn't a secret anymore and considerable funding and effort has been put forth to dominate the sector. As such, leveraging every possible way to save money and remain competitive is vital. Here are the top 10 ways crypto miners save money.
Mining used to be open to anyone; it still is. However, there is no denying that it is much more difficult to successfully mine Bitcoin without using specialized hardware versus a decade ago. The evolution of mining equipment is an interesting tale demonstrating the many changes of pace the market has endured.
The first miners simply needed a PC, allowing almost anyone to participate in validating the blockchain. However, as soon as miners realized that GPUs were better at solving the SHA-256 equation, they became the industry standard. As the network grew, this eventually added demand for these devices, resulting in widespread shortages for GPU manufacturers.
It wasn&#;t long before dedicated Bitcoin mining rig manufacturers entered the market and introduced ASIC (Application Specific Integrated Circuit) devices to the market. These early high-powered devices were built from the start to accomplish only one task: solve the SHA-256 equation. As such, they are thousands of times more powerful than GPU options.
Recently, mining rigs have begun to pivot towards creating the highest hash while remaining sustainable. Mining rig manufacturers are aware of the massive pushback that networks like Bitcoin have gotten from conservationists and those worried about its power consumption. In response, a new generation of sustainable mining rigs is now available.
Since the dawn of Bitcoin mining, miners have sought to leverage renewable energy to power their operations. There are endless stories online of massive solar or geothermal-powered mining farms. These installations leverage renewable energy to power their demands without draining the community.
There are many different ways to power Bitcoin mining rigs with renewable energy. Solar options are the first and most popular form of renewable energy for power rigs. Solar panels are readily available and easy to install, so they make sense. Geothermal and hydraulic options are also popular.
Notably, El Salvador is in the middle of building a massive mining facility that uses volcanic energy. This setup will enable the country to further its aspirations of becoming a major Bitcoin hub in the region. It also demonstrates the nation's commitment to the decentralized economy.
In the future, there will be even more renewable mining options as mining rig manufacturers have begun integrating options to streamline the process. In the future, almost all major mining farms will be powered by winds, sun, and even wave power.
Another easy way for miners to save and avoid having to make a massive investment is via cloud mining. Many reputable platforms operate major mining facilities. These facilities allow users to rent hash power and receive their Bitcoin rewards directly in their wallets.
Data centers are ideal for people who live in climates where it wouldn't make sense to mine for Bitcoin. For example, if you live in a very hot and humid area, it is going to be more expensive to keep your rigs cool, which will significantly reduce your profits. It&#;s a better option to leave the heavy lifting to a mining facility that was designed to offer its services to the public.
Mining pools are another great way to alter the rewards scenario. In a single mining scenario, every miner competes for a chance to solve the equation and receive a reward. Notably, this layout means that there&#;s little chance that you will receive the rewards when competing against massive data centers.
One way to offset the wait is to join a mining pool. Mining pools are large communities that combine efforts to gain more hash power in the network. These pools work to improve ROIs because they pay out rewards, split over the pool based on your contributions.
Receiving consistent rewards can help you build up reserves versus waiting for a windfall that may never arrive. These factors have made mining pools one of the premier ways crypto miners participate in the market. Additionally, they can open the door to other coins that use the same mining algorithms.
The main thing to consider when finding the right mining pool is its history. Some pools dominate the market and have formed a reputation for their quality. The best pools have been in operation for years and have thousands of members who can attest to their quality and payouts.
Another cool way in which miners are getting the most out of their setups is by heating their homes and businesses. Mining rigs put off a lot of heat and until recently, this was a major issue. Thankfully, some miners have embraced this issue rather than run from it. As such, there are more mining rigs used for heating than ever.
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There are a variety of ways in which miners use their rigs to make their homes and businesses more comfortable. You can find examples of miners using their rigs to heat rooms and even water heaters in a simple search. Some instances show water-cooled mining rigs where the heated water can then be used for many options.
This approach is a great way to save for businesses located in regions with low electricity costs and temperatures. Nations like Greenland have access to lots of renewable energy, making it ideal for mining. The heat from these massive mining farms is then used to heat other facility areas which would normally cost much more to keep comfortable.
Imagine heating your pool or massive warehouse while at the same time securing the Bitcoin mainnet. This reality is closer than many people think. When you look at the massive amount of heat created by high-powered mining rigs, this strategy makes perfect sense and can save a miner big time.
There is a growing number of locations around the world that seek to draw crypto businesses. As such, it's worth your time researching if there are any tax incentives or benefits for miners in your region. You may be pleasantly surprised to learn that you get a discount on electricity or other benefits.
More nations have begun to open crypto districts. These regions are set up to support blockchain innovation and cultivate future startups. As such, they are tech-friendly and offer cool benefits to attract the best talent and profitable businesses.
A great example of a crypto-friendly community is El Slavador&#;s Bitcoin Beach. This community was designed from day one to help promote Bitcoin and other cryptocurrencies. The maneuver went along with a ruling that made Bitcoin legal tender. All of these moves catapulted El Salvador into the limelight as a pioneering crypto market.
The best way to find any tax incentives in your area is to speak with a tax specialist. These strategies can help you to get all the advantages allowed. They can also help you structure your business in a manner that enables you to take additional tax incentives to build your blockchain business.
The use of mining heat to produce food is another fascinating development. Recently, many miners have moved to use their heat to help cultivate food. These innovative individuals use their rigs' heat to accomplish tasks like controlling the heat in their greenhouses or the water of their plant food.
The concept of combining food production and crypto mining is one right out of the sci-fi books. When you consider the major benefit that this approach brings to the market and the fact that it tackles two of society's biggest issues, food, and financial insecurity, the entire idea is a win-win.
Another way in which miners can keep the network safe without spending all of their funds is by leveraging dual-purpose devices. Items like smart TVs, appliances, and even vehicles can be set up to mine cryptocurrencies. Imagine your fridge letting you know you need more milk and then sending the funds to the grocery store and ordering it.
While this reality is a little off, it's not that far. Already, many smart devices are capable of handling mining applications. The pioneering EV firm Avvenire recently unveiled a fleet of new EVs that are blockchain-enabled. These devices range from an e-bike that pays you crypto rewards for your journeys to a 2-seat roadster that is capable of doing 0-60 in 1.8 seconds.
Avvenire isn't alone on its quest to transform your electronics into ming rigs. Other firms already offer mining rig space heaters and other blockchain devices that pay their way.
Another easy way to reduce your mining costs is to stick with cryptocurrencies that don&#;t enable the use of GPU or ASIC mining rigs. Many coins use various methods to prevent miners from using high-powered rigs. For example, Monero was designed to be resistant to ASIC mining rigs.
Developers continue to expand on ways to prevent mining centralization. One popular method is to have the network's consensus mechanism alternate. This maneuver means ASIC miners can only participate in the consensus portion that fits their chipset.
Another popular option that offers mining resistance is Zcash. The network introduces the Equihash algorithm, better suited for GPU and PC mining than ASIC rigs. Notably, many privacy coins support PC and GPU mining.
The innovative minds at Titan Mining recently unveiled a Lightning Network-powered mining protocol that improves processes considerably. For one, it enables instant payouts rather than waiting for pool payouts, which can take days. This system leverages the Lightning Network's payment channels to reduce costs.
The Titan Lightning Protocol introduces a new concept &#; tokenized hash power. The market enables miners to sell their hash power as tokens to others. The process is completed on a chain and provides full transparency. This approach is just one of many methods driving profits in the mining sector.
Many people are unaware of the crucial role that miners play in the market. They are the backbone of decentralized networks like Bitcoin. As such, more effort needs to be put into making their positions profitable and rewarding. These top 10 money-saving tips go a long way to help reduce overhead and improve rewards.
You can learn more about exciting blockchain projects here.
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