What is mining? How is mining of bitcoins, lightcoins or solo mining done?

The Internet, which was created by US military scientists to transmit highly classified information, now provides users with almost unlimited possibilities. They communicate, meet, live and even earn. Most recently, there was a new system, with its own currency and rules - it's "Mining". It soon gained popularity, since it practically does not require constant presence and participation. So what exactly is mining? What does it need and how does it work? How best to start a business: join a community or do it with your own hand, investing only your own resources and forces?

What is mining?

What is this Internet earnings system? If we talk about the literal meaning of the word "mining", then it is extraction of various minerals. But on the Internet is the process of obtaining virtual crypto currency. It covers not only finances, but also various elements of programming. In this case, almost everything depends on the installed video card and processor.

The answer to the question of what mining is and how to earn it depends on how much you are aware of the work of your own computer equipment and the process of transferring information on the Web. The basis in this system is the generation of individual parts of bitcoin (crypto currency) by building a hash.

In other words, the essence of mining lies in the fact that a lot of computers that are not connected among themselves through a special program solve various mathematical computational problems. As a result, the bitcoins are created, which are transferred to the miners themselves for the work done.

History of occurrence

The most interesting is that, despite world recognition and popularity, the mining of bitcoins has a rather dark past. Even now, almost no one knows who exactly and when exactly invented this financial and computing system. In addition, over the past few years there have been many versions of the possible origin. However, there are also undeniable and generally accepted facts.

It is believed that for the first time it was possible to earn several units of this crypto currency back in 2008. Initially, the miner was a certain Satoshi Nakamoto, a Japanese. Although some argue that this is only a fictitious personality, but in fact the first earner was several people at once. At that time, a file appeared on the Web, which carefully described the structure, protocols and principles of the peer-to-peer system. And in 2009 the first full-fledged client was introduced.

Within a fairly short time, this kind of earnings has a lot of admirers and followers. But it is worth noting that in some countries, such as, for example, Thailand, the crypto-currency mining has been banned.

Fundamental rules

As in every professional system, there are several generative principles, thanks to which it is so unique and interesting. So, what is mining, you can understand by reading its main provisions:

• There is no centralized management in the virtual currency production system. Therefore, it can not be blocked or subordinated.
• The system is anonymous. Users are not required to provide official personal information. Due to this, it is simply impossible to track any transaction.
• Mining on video cards works according to the initial algorithms. Because of this, it is impossible to create more bitcoins than it is supposed to.
• Transactions can not be canceled, and all information about them is stored in a common database. In doing so, it uses blocks that arise during the creation of bitcoins.
• Earnings are provided from the resources of a separate computer. At the same time the extracted bitcoins can not only be exchanged within the network for various goods and goods, but also converted into real money.

Specialized equipment for mining

One of the main rules of a successful and profitable business is investments. After all, if you do not ensure a good start, then all efforts will almost be in vain. That's why bitcoin-mining requires significant investment in equipment. In this case, you can go in two ways: buy a specialized complex ASIC or buy all the elements separately. The first method will give you the opportunity to get more performance, and the second is much cheaper.

ASIC is a specialized system created by student Yifo Guo. Its value and high efficiency lies in the fact that it solves one particular problem - the swapping of hashes. In addition, it is quite compact and unpretentious. But such a system is very difficult to get, because it is quite expensive, and the order will have to wait up to several months.

Standard equipment for the production of "bitcoins"

If you choose a more budget option, the following tools will be needed for mining:

• Motherboard.
• Video cards (preferably a few).
• Powerful processor.
• Power Supply.
• A hard drive and additional memory.
• Cooling system.
• Riser-extenders for additional video cards.

The task is to ensure that all this corresponds to the latest technologies and trends. A lot of? And what do you want? What is mining without investment? Zero without a wand.

Required settings

For the production of bitcoins, not only the latest computer equipment is used, but also special programs. For example, Bitcoin or CGMiner. But! In order for them to work correctly, you need to set the appropriate settings. This will greatly improve the productivity and efficiency of the process.

It is very important to configure the mining, which requires some adjustment of the equipment:

• I is the load intensity of the video card. It is recommended to increase from 9 to 20 points, depending on the capacity of the equipment used.
• Thread-concurrency. This is the number of calculations.
• G is the number of threads. It is optimal to set the value from 2 to 10.
• Gpu-engine. The frequency of the graphics core depends on it. The optimal size is 900-1500.
• Gpu-powertune. Power consumption of the video card used. The value is from -20 to +20.
• Gpu-fan. Fan cooling. It is recommended to set at 85%.
• Gpu-memclock. This is the memory frequency of the video card - 1500.

This is almost all the necessary parameters. They directly depend solely on the power of the selected equipment.

Mining of "lightcoins"

Bitcoins are not the only virtual money that can be obtained with the help of special equipment. This is due to the fact that over time, to produce crypto currency, due to many features, it becomes more complicated. Therefore, more and more financial units are being invented. Litecoin-mining, like "mining" bitcoins, has the same working principle. But there are several significant differences:

1. The technology of calculating blocks is less dependent on the video card than on the amount of memory and the power of the processor used. Therefore, you can use completely ordinary computers, without spending any money for additional equipment.
2. The complexity of producing lightcoins, unlike bitcoins, can not only increase over time, but also decrease significantly. This makes it possible to obtain more lightcoins on the same equipment.
3. The process of calculating this crypto currency is much faster, which means that the user earns significantly more real money.

Despite the obvious benefit, in comparison with bitcoins, the lightcount mining began to take positions. Now it's almost as difficult to get money.

Solo Mining

The name of this Internet earnings fully corresponds to its essence. Solo-mining of bitcoins is the solution of various cryptographic equations exclusively alone.

The process of extracting virtual currency is carried out by pooling, where several dozen, or even hundreds of people, united by the same network, build the correct hash. Also, those who have their own farm for mining, can work independently.

Each option has its pros and cons. It is worth noting that one can save a lot on organizations, since pools for each transaction take a certain percentage. However, for solo-mining you need a fairly powerful computer equipment. And he can afford only a fairly wealthy person.

Advantages and disadvantages

Before you engage in such a popular activity, you should carefully weigh the pros and cons. The advantages of this method include:

• It does not require personal intervention. You can simply download the program and quietly do your own business while the computer earns. And the more speed of mining, the more money there will be.
• The extraction depends only on the capacity of the equipment used.
• All programs for mining are carefully checked for viruses, and therefore they are absolutely safe for the computer.
• Each pool has an affiliate program, through which you can invite friends and earn a certain percentage of it.
• Payments can be obtained in several ways, and you can withdraw absolutely any, even a small amount.

The disadvantages of this program include:

• Every year the production process becomes more and more complicated, and therefore requires more and more powerful equipment.
• Crypto currency is also subject to the influence of external world money markets.
• There are some internal problems, for example, there is no clear regulation of the exchange of lightcoins and bitcoins.

The most popular crypto currency payment systems

Pay Per Share. There is a fixed payment for each transaction. Excellent for non-permanent mining. The only drawback is a large enough commission.

RBPPS. It differs in that the reward is credited only after checking the correctness of the calculations. Accordingly, the commission here is rather low.

PPLNS. This is the payment for the last few operations that took place in the last round. Used for constant mining. The system works only for the blocks found and received.