Monero (XMR) has carved itself a niche in the extremely competitive cryptocurrency industry. So, if you’re considering Monero mining, you’re not alone. The meteoric rise of Monero last year drew a lot of interest in XMR mining.
Because of its sound success last year, Monero has become a darling among investors and miners. It increased from $10 in January 2017 to $494 in January 2018, providing investors a 4800 percent return. Isn’t that incredible?
Monero Mining may be perplexing, and you may have many questions, such as: how does it work? What software and hardware do I require? Where do I begin? How much time does it take to mine one XMR?
But here’s the good news: I’ll address these and many more questions about Monero mining today. So, after this article, you’ll know exactly what Monero mining is and if you should do it or not.
So, let’s get started!
Monero Mining: What is Monero (XMR)?
Monero is a digital currency that, like Bitcoin, can transmit and receive payments. Assume Ralph wants to pay Ava $100 and they agree to do it in cryptocurrency. Ralph can pay using Bitcoin, Litecoin, Monero, or any other comparable cryptocurrency.
So, what makes Ralph use Monero?
What Makes Monero Unique From Bitcoin?
If Ralph and Eve want their transaction to be untraceable and confidential, Monero could be the ideal alternative.
Please allow me to elaborate: When Ralph pays money to Eve using Bitcoin, the transaction is visible to everyone on the network. Everyone may see who sent the message and who received it. This implies that all Bitcoin transactions are public and visible to everyone.
Bitcoin, although decentralized, is not private. Monero, on the other hand, is both decentralized and private. Monero’s mechanism ensures that all transactions are completely secret and untraceable.
If the transaction is done with Monero, Ralph and Eve will be the only two people who are aware of it. There is no one else on the Monero network who could learn about this transaction. Monero’s popularity stems from its ability to provide secrecy. Some people are uneasy telling others what they spend their money on.
Besides the total anonymity, Monero has the following distinguishing features:
Monero is a fungible cryptocurrency
Does that seem complicated? No, it isn’t. It is a really basic idea. Fungibility simply refers to the interchangeability of units of a currency (or asset). Another $100 bill can replace A $100 or even two $50 bills. This makes fiat currency fungible (USD, EUR, JPY, and so on).
Bitcoin has no fungibility. This is because of the possibility of someone refusing to accept a Bitcoin that someone used for unlawful activities. This is workable because all transactions on the Bitcoin network are visible to everyone.
So, whereas one unit of Bitcoin may not be convertible with another, the same is not true of Monero. Because no one knows anything about a Monero coin’s prior transactions, we deem all of them equal and interchangeable.
ASICs are not required for Monero Mining
An ASIC is a type of hardware used specifically for Bitcoin mining. An ASIC can cost anywhere from $600 to $1000, making Bitcoin mining unappealing to anybody other than specialists.
Fortunately, Monero mining does not cause the purchase of an ASIC. Monero mining may instead be done with your computer’s CPU/GPU. As a result, Monero has become an appealing choice for newcomers and those who do not wish to invest enormous sums of money.
So, now that you know a little more about Monero and how it varies from Bitcoin, it’s time to figure out what Monero mining is.
What exactly is Monero Mining?
There are now 15,829,795 XMR in circulation as of this writing. This figure will rise until there are 18.4 million Monero coins in circulation.
So, how do fresh Monero currencies originate? The answer is simple: Monero mining! Monero miners handle two crucial tasks: Assume Ralph transfers $100 to Eve by bank transfer in the above scenario. Here, it is the bank’s responsibility to ensure that Ralph has the funds to make the $100 payment to Eve. After the bank approves the transaction, they will record it, so that they can refer to it in the future.
Now, if Ralph sends $100 to Eve using Monero, who will validate and record the transaction? Monero miners are the solution! This eliminates the requirement for banks to confirm transactions. A frequently asked question is, “What’s in it for the miners?” Each time they validate a transaction on the Monero network, the network pays them with XMR coins. They get fresh new Monero coins every time they use their resources to validate a collection of transactions (called blocks).
Mining Rewards for Monero
The current payout for verifying (mining) one transaction block is around 4.99 XMR + a transaction fee of 0.06573 XMR. So, when they mine all 18.4 million Monero coins, what happens to the miner’s reward?
The good news is that after hitting 18.4 million XMR coins, they introduced new coins to the system at a constant rate of 0.3 XMR per minute. These additional currencies will reward miners and keep them motivated to continue mining.
How long does it take to mine one Monero coin?
Every 2 minutes, they mine a Monero block, and the current payout for mining a transaction block is 4.99 XMR. So, using simple math, we can calculate that miners can mine 1 XMR every 24 seconds. Now that you understand what Monero mining is and why it is necessary, you can learn how to mine Monero.
Mining Monero: How to Mine Monero
As previously stated, no specific hardware is required for XMR mining. Anybody may mine Monero with a computer. Having said that, the more powerful the gear, the better. There are various ways to mine Monero, but first, understand what a Monero mining pool is.
Monero Mining Pool
Before you mine, you must determine whether you will mine Monero on your own or join a Monero mining pool.
A mining pool is a collection of Monero miners that pool their computing power. This increases their chances of successfully confirming transactions. They also distributed the mining incentive throughout the mining pool. Most mining pools impose a pool fee, which typically ranges between 0 and 2%.
Assume you provide 5% of the total hardware power of the mining pool in which you take part. This means you’ll receive 5% of the total earnings collected by the Monero mining pool. For novices, we do not recommend solo mining. Solo mining will not provide any profits unless you will invest a significant amount of money in mining hardware.
Methods of Monero Mining
The most significant aspect of mining is having the appropriate Monero mining hardware. In addition to the gear, you’ll need Monero mining software to join a Monero mining pool.
As previously stated, you do not require specialist ASICs to mine, Monero. It may be done with either a CPU or a GPU. However, before you begin, you need to be aware of the two most crucial aspects to consider when purchasing your hardware.
Look for the following:
- High hash rate – Think of hash rate as the hardware’s processing power.
- Low electricity usage – The most expensive aspect of mining is electricity.
Should You Mine Monero?
While mining Monero can be profitable, it depends on several criteria, the most significant of which are:
- Hash Rate: The processing power of your hardware.
- Power Consumption: The amount of power consumed by your hardware.
- Cost per kWh: The cost of electricity per unit.
- Pool Charge: The fee for entering the mining pool.
- The initial cost of installing the gear.
You may try an online Monero mining profitability calculator! The profitability of mining is also determined by the XMR price. Cryptocurrency values can fluctuate dramatically, and these fluctuations influence your mining profitability.
If you wish to mine, it is entirely up to you. Consider the variables listed above before making your selection. Remember, the more you invest, the more likely it is that you will get a reward.
So you now have a solid idea of what Monero is and how it differs from Bitcoin. You also understand what Monero mining is and how to do it in various ways.
Monero Mining may or may not be lucrative, depending on factors such as hash rate, power cost, hardware cost, and so on. If you think Monero mining is for you, use the information in this guide to get started!