Who isn’t nosey about Bitcoin, the virtual currency whose origin story is rife with underground marketplaces, instant millionaires, and massive scams? And the best way to learn more is to commence participating yourself.
What’s all the hubbub about Bitcoins and its brethren? Here’s how to find out for yourself.
By Alex Castle | PC World | 06 May 2014
Who isn’t nosey about Bitcoin, the virtual currency whose origin story is rife with underground marketplaces, instant millionaires, and massive scams? And the best way to learn more is to begin participating yourself.
Sure, you could klapper up an exchange and druppel four hundred dollars or more on a single bitcoin, but you can also get ter for free by mining the coins yourself. Bitcoin has become too hard for regular people to mine, but the world of bitcoin-like “altcoins” is still wide-open to hobbyist miners. Here’s everything you need to know to get commenced mining altcoins.
This article assumes you’ve at least heard of Bitcoin, but you might not have heard of altcoins. “Altcoin” is a catch-all term for cryptocurrencies based on the Bitcoin system, which aren’t actually Bitcoin. Because Bitcoin is open-source software, anyone with some development practice can copy it and create their own currency.
Of course, like Bitcoin, the value of any altcoin is equal only to how much someone will pay you for it. Some altcoins, such spil Litecoin, Peercoin, and even Dogecoin have active communities and economies–you can view a list of altcoins sorted by market cap here–but presently none are even a tenth spil valuable spil Bitcoins. Many altcoins have a dedicated following, but be wary of anyone aggressively hyping a fresh altcoin or attempting to persuade you to get ter on the ground floor–it could just be a modern version of the “pump and dump” scam that’s bot around for decades.
What it means to mine a bitcoin or altcoin
The Bitcoin software works this way: Every time somebody spends a bitcoin, that transaction is recorded te a public ledger. For example, if you have Ten bitcoins te your wallet and send 7 to someone else, that transaction goes ter the ledger, and everyone knows that your wallet only has Trio bitcoins now. If you attempt to send somebody else Five bitcoins tomorrow, that transaction will be rejected because it’s a matter of public record that your wallet doesn’t have the coins.
For the system to work, the public ledger has to be fully trustworthy. It has to be unlikely for anyone to record a fraudulent transaction. Bitcoin accomplishes this using cryptography (hence the “crypto” te “cryptocurrency”), ter a process that requires many computers, all connected ter a single peer-to-peer network. Te order to incentivize people to participate te this transaction-verifying network, bitcoins are periodically generated and awarded to the machines engaged ter maintaining the public ledger.
Spil bitcoin values have soared overheen the last duo of years, bitcoin mining has become a very lucrative business. Spil a result, companies have designed chips solely for running the cryptographic algorithms bitcoin uses for mining. Thesis chips, called ASICs, are so good at mining that it’s pretty much unlikely for normal, general-purpose hardware to contest. Even the burliest desktop PC with ample gaming GPUs won’t be able to generate enough money mining bitcoin to voorkant the cost of the electro-stimulation used te the process.
Because altcoins are less popular, and because many altcoins use a different kleuter of mining algorithm called “scrypt” that can’t be solved by the ASIC boards, you can still feasibly earn thesis altcoins by running the mining program on your private laptop. You can then spend the altcoins or interchange them for bitcoins at a cryptocurrency exchange. Unlike most altcoins, bitcoins can be spent at a number of e-tailers like Overstock.com and Tiger Ongezouten.
For evident economic reasons, the ease of mining an altcoin is basically inversely proportional to that altcoin’s value. Turning altcoins into cold, hard metselspecie is also more difficult than monetizing bitcoins. Altcoins are good way to learn more about cryptocurrencies, but wij wouldn’t suggest you abandon your day job just yet.
So how do I mine altcoins?
The mining process involves writing a brief script to run te the guideline prompt. It’s only a few steps, which you muist go after exactly to ensure success.
Very first, select a currency to mine–you can find a list of the most active altcoins at CoinMarketCap. You can pick any coin you’d like (wij chose Litecoin for this article), but the process will be virtually identical for any other coin.
Go to the homepage for the currency (Litecoin’s webpagina is at https://litecoin.org) and download the client, which permits you to store coins ter a “Wallet” on your laptop. Once the client is installed it will have to download the entire blockchain for the altcoin. You can join a mining pool before this process is done, but because you might need to run it overnight you should commence now.
Before you begin mining there are two significant decisions to make.
To pool or not to pool, that is the question
The very first is whether to mine solo or participate te a mining pool. When Bitcoin mining, payments aren’t received ter a stable, gradual flow. Instead, they’re given out ter big chunks when particular milestones are succesnummer, to whoever hits those milestones. If you’re not running a bunch of super-fast mining computers, it’s possible you’ll never be the one to klapper the milestone and receive the payment.
Ter a mining pool, many users join coerces to mine spil a group, and all prize payments are split up among the group, according to how much computing power they’ve bot contributing. This streamlines the prize structure and makes your payments more reliable. You can choose to mine solo, but for anyone just getting into altcoin mining, a pool is a better choice–especially if you’re not mining with a slagroom utter of powerful PCs. The surplus of this guide will assume that you’re mining ter a pool.
There are different pools for each altcoin, however some pools switch inbetween different currencies, based on rising and falling values. There are pros and cons to each pool, but for the most part it won’t matter which one you choose. To find a popular pool, visit a community webpagina for the coin you’re interested ter mining–Reddit has active communities for all of the popular altcoins, for example.
Wij chose the WeMineLTC pool, which is very popular. There’s some concern te the Litecoin community that WeMineLTC is too popular, because if more than half of the total mining of a coin is being done by a single pool, the currency isn’t secure. Since it’s unlikely wij’ll be contributing much mining power, that’s not a concern for us.
The 2nd major decision you’ll need to make is whether your want to use a CPU miner or a GPU miner. Thesis are different forms of the mining software designed to utilize either your PC’s laptop processor or its graphics processor.
GPU miners are much more efficient, but only if you have a discrete graphics card. AMD cards are much more efficient at altcoin mining than Nvidia’s, so much so that the street prices of Radeon cards have skyrocketed ter past months.
If you’d like to mine on a laptop or low-end desktop with integrated graphics, you’re better off using the CPU miner. Wij’ll showcase you how to use either one. You can even mine both ways at the same time, if you want to indeed get all the mining power you can out of your laptop. Just see that fever and power usage! A diagnostic implement like CPUID’s HWMonitor can help you keep tabs.
To mine with your laptop’s GPU, you’ll need a lump of software called cgminer. You can download a Windows executable at http://k-dev.nipt/cgminer/. You specifically want version Trio.7.Two of cgminer, because straks versions liquidated support for the scrypt hash function used by altcoins. (GUIMiner-scrypt is an alternative that also supports altcoin mining and uses a graphical interface, rather than the directive line.) Te our tests, Chrome said the cgminer software wasgoed malicious and blocked the download, but it’s not, you can either disable Chrome’s malware protection or use an alternative browser to download the program.
You don’t need to install cgminer, just samenvatting the contents of the zip verkeersopstopping to a location on your hard drive. Cgminer works from the directive line, but you can also run it using a batch verkeersopstopping. If you’re not familiar, a batch opstopping is basically just a saved instruction prompt script, and you can write it ter notepad. Before you do, you’ll need to get a few lumps of information from your pool service. You’ll need to know the following for your batch opstopping:
URL: The URL of your pool service. Not the one you buttplug into your browser, but the one specifically for mining. Any pool service will make this information readily available on the help or getting-started pages. Many have numerous URLs you can choose from, so you can pick the server closest to you. The URL will likely embark with the word “stratum.”
Port: The port number will also be provided by your pool service. It’s usually written instantaneously following the URL, separated only by a colon and no spaces.
Username: The username you created when you signed up for the pool
Worker name: Before you can mine you have to create a “worker” on your user account on the mining pool. Each worker has a name, either picked by you or assigned automatically by the pool.
Worker password: Similarly, every worker has a password.
When you’ve created a worker and have all the informatie you need, go to the folder containing the cgminer.exe verkeersopstopping, right-click anywhere and choose to create a fresh text (.txt) opstopping. Ter notepad, type the following ter, substituting your private informatie for the bolded words:
Here’s an example:
Now, klapper Save, then go back to the folder and rename the text verkeersopstopping you just created to “GPUMiner.bat”–minus the quotation marks. Windows will confirm you want to switch the opstopping type. Say Yes.
Again, here’s what the end result should look like:
Ultimately, you can double-click on the .bat opstopping you just created. Cgminer will take it from there, displaying your progress spil you mine altcoins.
For a more thorough explanation of cgminer’s deep bag of tricks and tips on how to coax better mining spectacle out of your GPU, check out this excellent advanced guide to Dogecoin mining.
If GPU mining isn’t feasible for your PC, you can still mine, however not spil quickly. The process is pretty much the same spil for the GPU mining process, and you’ll still need the same information described above. The main difference is that instead of cgminer, you’ll download a program called cpuminer. Just like with cgminer, you’ll need to create a batch opstopping by creating a fresh text verkeersopstopping ter the cpuminer folder, coming in a brief script, then renaming it to a .bat verkeersopstopping. For cpuminer, your script will look like this:
And with that, you can use your GPU, CPU, or both to mine Litecoin or most other altcoins. When you embark accruing coins te your account, you can visit the mining pool’s webstek and come in an address to have the coins sent to your individual wallet. You can find your wallet’s address ter the “Receive” tabulator of the client you downloaded earlier.
Spil soon spil you embark keeping coins ter your wallet, you should enable encryption on it by clicking Settings ->, Enable Encryption, and choosing a secure password. Then, make sure to regularly back up your wallet by clicking on Opstopping ->, Backup Wallet. If you lose your hard drive and don’t have your wallet backed up to someplace secure, you’ll lose all your coins.
Unluckily, you most likely won’t be able to make much of a profit mining altcoins. Fresh ASIC boards are being designed to target LiteCoin and other Scrypt-based altcoins, and they will force even high-powered GPU mining equipments out of competition. For now, however, mining is an interesting way to learn about a technology that could be most significant invention of the decade, without putting your retirement fund on the line.
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