Table of Contents
- 1 Monero Mining: What is Monero (XMR)
- 2 Monero Is Fungible
- 3 Monero Mining Does Not Require an ASIC
- 4 Monero Mining: What Is Monero Mining
- 5 Monero Mining: How to Mine Monero
- 6 Should You Mine Monero?
- 7 Monero Mining: Final Words
Monero Mining: What is Monero (XMR)Monero, like Bitcoin, is a digital currency which can be used to send and receive payments. Imagine Carl wants to pay $100 to Ava, and they agree to do the transaction in cryptocurrency. Carl can make the payment using Bitcoin, Litecoin, Monero or any other similar cryptocurrency. So, why would Carl use Monero?
How Monero is different from Bitcoin?If Carl and Ava want that their transaction remains untraceable and private, then Monero may be their best option. Let me explain this further: If Carl sends Ava some money using Bitcoin, the transaction is visible to everyone on the network. Everyone can see who the sender is who the receiver is. This means that transactions sent in Bitcoin are public and out there for everyone to see.
Monero Is FungibleSounds complex? Well, it isn’t. In fact, it’s a very simple concept. Fungibility simply means that units of a currency (or asset) are interchangeable. For example, a $100 bill can be replaced by another $100 bill, or even two $50 bills. This is what makes fiat currency (USD, EUR, JPY etc.) fungible. Whereas Bitcoin is not fungible. That’s because someone might refuse to take a Bitcoin which has previously been used in an illegal transaction. This is possible because everyone can see the transactions which have took place on the Bitcoin network. So, one unit of Bitcoin might not be interchangeable with another Bitcoin, but this is not the case with Monero. Since no one knows anything about the previous transactions of a Monero coin, all of them are considered equal and are interchangeable with one another.
Monero Mining Does Not Require an ASICAn ASIC (Application Specific Integrated Circuit) is a special type of hardware used for Bitcoin mining. An ASIC can cost anywhere in between $600 to $1000, which has made Bitcoin mining unattractive for anyone except professionals.
Monero Mining: What Is Monero MiningAt the time of writing, there is a total of 15,829,795 XMR in circulation. This number will continue to increase until there are 18.4 million Monero coins in circulation. So, how are new Monero coins created? The answer is simple — Monero mining! Monero miners perform two important tasks:
- In the previous example, suppose Carl sends $100 to Ava via bank transfer. In this scenario, it is the bank’s job to make sure that Carl has enough balance to make the $100 payment to Ava. After the bank confirms this transaction, they make a record of it so that it can be referred to in the future.
Now, if Carl were to send the $100 to Ava using Monero, then who would validate and record this transaction? The answer is: Monero miners! This removes the need for banks to confirm transactions.
- A question that often comes up is: What’s in it for the miners? Well, they get rewarded with XMR coins each time they verify a transaction on the Monero network. Every time they use their resources to validate a group of transactions (called blocks), they are rewarded with brand new Monero coins!
Monero Mining RewardThe current reward for verifying (mining) 1 transaction block is around 4.99 XMR, plus a transaction fee of 0.06573 XMR. So, what happens to the miner’s reward after all 18.4 million Monero coins are mined?2 minutes, and we know that the current reward for mining transaction block is 4.99 XMR. So, by doing the simple math, we know that 1 XMR is mined every 24 seconds. Now that you know what Monero mining is and why it is required, it will be easier for you to understand how to mine Monero.
Monero Mining: How to Mine MoneroAs I mentioned earlier, you don’t need to purchase special hardware for XMR mining. Anyone with a computer can mine Monero. But with that said, the more powerful the hardware, the better. There are several ways to mine Monero, but before we get into that, you need to know what a Monero mining pool is.
Monero Mining PoolBefore you start mining, you need to decide whether you’re going to mine Monero on your own, or will you join a Monero mining pool. In a mining pool, a group of Monero miners come together and combine the power of their hardware. This gives them a better chance of verifying transactions (yes, the competition is tough!). The reward they receive from mining is also split between the mining pool. Most mining pools charge you a pool fee, which is generally in the range of 0-2%.
Pool Fees: 1%
Number of Miners: 32157
Pool Fees: 0.6%
Number of Miners: 10339
Pool Fees: 1%
Number of Miners: 30132
Pool Fees: 2%
Number of Miners: 2191
Ways to Mine MoneroThe most important part of mining is to have the correct Monero mining hardware. Along with the hardware, you also need Monero mining software to help you connect with a Monero mining pool. As I mentioned earlier, you don’t need specialized ASICs for mining Monero. It can be done using a CPU or a GPU. But before proceeding, you need to know the two most important factors when selecting your hardware. You should look for:
- High hash rate – You can think of hash rate as the processing power of the hardware
- Low electricity consumption – Electricity is the biggest cost of mining
Central Processing Unit (CPU) MiningYou can choose to use your current CPU, or you could purchase a new one. If you are planning to buy a new CPU, then AMD Opteron and Intel Xeon CPUs are two that I would recommend.
Cost – $50
Hash Rate- 415 H/s
Cost – $150
Hash Rate- 130 H/shere If you are using Windows, then you should download xmr-stak-cpu-win64.zip (shown in the snapshot below). XMR Stak charges a development fee of 2%, unless you can compile the source code yourself. If you already have a CPU then it only takes few minutes to start mining! Just install the software, join a mining pool and you’re ready to go.
Mining With an AMD Graphics Processing Unit (GPU)If you are serious about Monero mining, then using a GPU is a better option. Even though it requires a larger investment, it offers a significantly higher hash rate. AMD graphics cards are a great option to consider for GPU Monero mining. Consider purchasing an AMD R9 280x or go for the more recent AMD Radeon Rx 580.
Cost – $140
Hash Rate- 500 H/s
Cost – $300 – 400
Hash Rate- 575 H/sOnce you have installed the graphics card into your PC or laptop, follow the same steps as you would if you were CPU mining. The best Monero mining software when using AMD GPU hardware is also XMR-STAK-AMD. You can download their latest release here: https://github.com/fireice-uk/xmr-stak-amd/releases/download/v1.1.0-1.4.0/xmr-stak-amd-notls-win64.zip.
Mining With an Nvidia GPUUsing an Nvidia graphics card is another popular way to mine Monero. There are several models that you can chose from, it all depends on your budget. You should consider using one of the following:
Cost – $400 – 500
Hash Rate- 505 H/s
Cost – $550 – 650
Hash Rate- 600 H/sAs far as software is concerned, XMR-STAK-NVIDIA can be used but CCMiner is considered a better option. You can download the latest CCMiner release here. Make sure you choose the ccminer-x64-2.2.4-cuda9.7z if you’re using a Windows operating system. These are some of the best methods for mining Monero using a combination of Monero mining hardware and Monero mining software. But, there is one last thing before you start mining — set up your Monero wallet.
Monero WalletThere aren’t many options when it comes to choosing a Monero wallet. Hardware wallets (which are considered the safest) are not available for Monero coins. Two of the most popular wallets, which are also listed on Monero official site are:
- MyMonero web wallet: Simply go to their website and create an account to start using it.
- Monerujo: This is a mobile wallet that is only available for Android devices.
Should You Mine Monero?You want to mine Monero to make profits, right? Well, while Monero mining can be profitable, it depends on a lot of factors, the most important of them being:
- Hash Rate: How powerful your hardware is
- Power Consumption: How much electricity your hardware uses
- Cost Per KWh: How much your electricity costs per unit
- Pool Fee: The fee for the mining pool you are joining
- Initial cost of setting up the hardware