Cryptocurrency mining it is a complicated and complex process, but thanks to specialized devices called cryptocurrency excavators, all this becomes simpler. Excavators are equipped with dedicated software that allows you to generate computing power, which is then directed to the specified network kryptowaluty. The whole is so automated that the owner of the cryptocurrency excavator remains only to choose the cryptocurrency that he wants to mine and the mine with which he intends to establish a connection. The rest is happening automatically. In the article below, I will try to introduce the most common methods of mining cryptocurrencies: solo mining and mining pool.
Should I really use the services of a mining mine?
At the very beginning it is worth noting that we are not really obliged to use the services of a mining pool (mining pool), we can dig without its intermediation. Sounds tempting, doesn’t it? Why, however, over 95% of miners decide to join the mining platforms? The answer is very simple: it just pays off.
An alternative to mining within a mine is mining alone, commonly known as solo mining. In both modes, we will be digging in the same cryptocurrency network, along with all other miners in the world who have also decided to mine the same cryptocurrency at the same time. If we realize that for the largest cryptocurrencies, the number of specialized devices connected to the network is counted in millions (Bitcoin. Ethereum), and the frequency of finding new blocks is rigidly written in the cryptocurrency protocol, for example on the network Bitcoin An average of 150 new blocks are created per day, after a cursory calculation and simulation we get a terrifying picture. With one cryptocurrency excavator specializing in finding Bitcoin, finding the right solution will take us at least a few years! Of course, all this time our excavator will need electricity and internet supply – to be able to successfully connect to the cryptocurrency network. However, energy operators are not so patient and usually utility bills have to be paid much sooner than the horizon of several years, and the miners themselves prefer to receive remuneration more often.
In other words, to receive more regular withdrawals, you need to collect more computing power and this basic functionality is provided by cryptocurrency mines. This mine is a collective entity connecting a large number of miners into one network node. The work of each miner is added up and directed to look for a new block. In this way, mining platforms hit blocks regularly, depending on their size scale, every few minutes or, for example, every few hours. The only Polish Ethereum mine according to data as of May 13, 2020. it hits an average of 2.3 Ethereum block per day.
Strengths and weaknesses of Solo mining
But what if, after all, we want to try our hand at solo mining, and the long waiting time for the prize does not deter us? This solution also has its advantages, the question of whether they will be encouraging enough to give up mining platform services.
First of all, we maintain independence in the solo mining mode: it is the miner who configures the connection to the cryptocurrency network, independently controls and monitors the progress of his work. If we make a mistake – we can only blame ourselves for failure.
On the other hand, when we hit Unit all remuneration goes to our account. At this point, we will especially feel the lack of commissions that mining platforms usually charge for their services, usually 1-2%.
A very interesting mechanism built into mining cryptocurrencies is the phenomenon of variance.
Variance is a classic measure of variability. Intuitively identified with diversity of communities; is the arithmetic mean of the squares of deviations of the individual feature values from the expected value. This scientific description tells us that if, according to calculations, it takes our excavators to find a block, let’s give it 30 days, then in the case of bad luck we can take 90 or even 180 days. In case of luck we can hit the block after 1 hour or equally well after 15 days. Remember, however, that on a larger sample (several dozen blocks) the average time will go to the initial 30 days. However, it is not said anywhere that we can’t get to a series of 5 very long blocks and vice versa. That’s how the process of mining cryptocurrencies from the inside works.
What is important in the case of solo mining, an unfavorable variance can put the whole enterprise down, waiting for the first salary by several times. On the other hand, there are known cases of hitting the block very quickly, but this should be approached like lottery games, and to increase the chance of winning it is best to simply release more tickets. Translating this into mining – the chances of success will be greater by joining a mining mine.
Strengths and weaknesses of the mining pool
When choosing to dig through the mining platform, the technical aspect goes, the mining mine configures the connection to the network and ensures the best connection quality. It is customary for mine operators to recommend recommended methods for connecting to their platform and the types of software supported. From the miner’s side, it is enough to read and follow the operator’s instructions.
Some of the mines require a miner’s account to be created by registering on their portal, for this we will need to provide an email address and password. Some of them communicate with their miners based on the wallet address that the miner has defined, this type is more secure, we simply leave less personal data.
Undoubtedly, the strength of mining mines, apart from the simplicity of configuration, is the graphical interface. Thanks to it, we can track the progress of our machine park. Most platforms offer a lot of facilities in this aspect, ranging from graphical charts, through individual statistics for each excavator, salary and payout history. This makes control and management much easier.
Another strong point is the abovementioned ability to cope with variance – by kicking together we will receive much faster remuneration, and the unfavorable series of long blocks will go much more efficiently than alone. At this point, it should be remembered that unlike solo mining, the remuneration will be divided among miners working within the mine. We will receive only part of the reward depending on how the mine operators pay (more on this in the next article).
The mining mine usually charges a commission for its services, which reduces our pay, the most common commission levels are within the 0.5-3% range.
To sum up, choosing the method of mining cryptocurrencies is a fundamental matter that needs to be determined from the very beginning. Solo mining mode is directed at more advanced miners, it requires greater knowledge of technical aspects. In addition, miners with a larger machine park are preferred, which will ensure a better chance of hitting the block faster. If you do not meet the above criteria – do not worry, you will join the vast majority of miners (95%) who use the services of mining platforms.
Author: Marcin Żywica from ŻET Technologies