There are stories in the media of people making gobs of money with cryptocurrency.
According to a recent article, one young software engineer working in Silicon Valley invested $3,000 for a few Bitcoins at the urging and suggestion of a co-worker. Today, that software engineer is retired and traveling the world after making about $25 million from that initial investment.
He maintains, even increases, his wealth by carefully managing his cryptocurrency investment. He understands how digital currency like Bitcoins work and is making an extremely comfortable life for himself.
It’s not just software engineers making money with cryptocurrency. Even people with limited software or technical knowledge can get started. It doesn’t even require a huge financial investment (but plenty of starting cash or credit can certainly speed up the process). There are plenty of options to earn coins.
We’ll be taking a close look at one of those options – mining for Monero. Unlike many of the cryptocurrencies, Monero has taken steps to make it easy to get started with mining.
Let’s get to know the digital currency Monero.
A Closer Look at Monero.
Monero is a relatively new cryptocurrency. It was created in 2014. Rather than use the Bitcoin architecture as the basis for the coin, which many cryptocurrencies on the market have opted to do, Monero uses the CrytoNight algorithm for the proof-of-work.
Monero is different from many cryptocurrencies. The focus on the coin is on privacy and security. With Monero, users and their transactions are almost untraceable and unlinkable.
Monero And The CryptoNote Protocol
CryptoNight is based on the CryptoNote protocol, which adds privacy protection to the standard digital signatures that are a requirement in the blockchain.
In a typical cryptocurrency transaction, a user will initiate a transaction (sending or receiving coins) using a private key and a digital signature. Anyone with access to the blockchain, typically through their private key, can review a record of transactions and track who received and sent coins.
With the CryptoNote protocol, the digital signature of everyone involved in the transaction is masked by other keys and signatures, or outputs, making it almost impossible to tell the transaction participants.
For additional protection, Monero uses ring signatures. With a ring signature, the blockchain software will combine several signatures, or privacy keys, with the signature of the person that initiated the transaction. This hides the identity of each person while ensuring authorization of the transaction.
Monero On The Market
The first digital currency to use the Cryptonote protocol to ensure user privacy was Bytecoin.
Many users had legitimate concerns about Bytecoin and how it operated. The founders and creators were all anonymous, and there was little transparency in how the coin was managed. Many were shocked to discover that 80% of the coins were already published at the initial offering.
To address these concerns, the Bytecoin blockchain was forked and a new currency created – Monero. Monero, in Esperanto, means currency.
From the beginning, Monero has been crowdfunded and open source. Of the seven developers who created Monero, five are anonymous, but two have come out to the public. David Latapie and Ricardo “Fluffypony” Spagni are very open to interact with users.
Monero has several features that make it different from other digital currencies. They include:
Monero has become the cryptocurrency of choice for cybercriminals according to some experts because it is difficult, almost impossible, to gather evidence from Monero.
But, don’t let this scare you. It has also evened the playing field for first-time cryptocurrency users. It offers many advantages for users looking to get started in mining digital currency.
Let’s look at how to mine Monero.
How To Mine Monero
With blockchain and cryptocurrency, every transaction must be verified and confirmed. It is then added to the public ledger as a “block” in the blockchain. In cryptocurrency mining, users with the right hardware and software can task their systems to solving the hashing algorithm, a computationally difficult puzzle. The puzzle must be completed for the blockchain to compile and confirm a transaction.
Typically, the miner who solves the puzzle first will add the block to the blockchain. They receive the reward, usually a coin, for their work. The reward comes from the transaction fee and partially from the new coin generated by the block.
This reward makes mining profitable and ensures there is enough computational power applied to maintaining and growing the blockchain.
Monero, unlike many other coins, is easier for new participants to start mining, with a much lower hardware requirement.
Getting Started Mining Monero
The first step in how to mine Monero is to review your hardware setup. While Monero doesn’t require ASIC hardware, it does have hardware requirements. We suggest the following for your system:
When looking at CPUs and GPUs for your system, you may be tempted to invest in a server CPU. Consumer CPUs work just as well for mining Monero. We suggest selecting a CPU that offers overclocking. Here are some of the top GPUs and CPUs for mining Monero:
Every GPU and CPU will have slightly different power
requirements. Make sure you match the power requirement for your system with your set-up. If you are limited in your power options, you may need to select a rig that meets your current power.
Software For Mining Monero
Once you have your system set-up, you’ll need to download mining software for Monero.
Mining software connects your mining equipment to the Monero blockchain. It guides your hardware through the mining process. Here are a few options for getting started mining Monero:
While Monero does not openly endorse any mining software, the selections above are listed on the official Monero mining page.
Setting Up A Wallet
Once you start mining, you’ll need a digital wallet to store the Monero you earn. The following mobile wallets are approved by the Monero community:
Before you start mining, you’ll be asked to connect your wallet. Take the time to set up your wallet first.
Monero Mining Pools
While Monero is more forgiving than other cryptocurrencies
for individual miners, many miners would still rather pool their resources with others in a mining pool. Before signing up, we suggest reviewing the pools to find one that is trustworthy and reliable in paying out proceeds to all the miners. Make sure you are aware of any fees charged by the pool to the members.
Here are some suggestions for reliable Monero mining pools:
Once you start mining, if you use a mining pool make sure to monitor your progress with them. While some mining pools offer 100% uptime, some will have downtime which can impact your earnings. Others will change the payout and fees, which can also impact your earnings.
Monero In The Future
Hopefully, you have a solid understanding of how to mine Monero after this guide. The coin is a solid investment that makes it easy to get started with mining. We see a bright future for Monero.