Mining cryptocurrencies is a fairly new industry and can be daunting to start with. People have many questions about it. This page is here to help answer some of those questions. If you're new to cryptocurrency mining or have lots of experience, this is a bit industry and an ever changing market, with new things to learn everyday. If you have a question that has not been answered here, please contact us and we will help as best we can!
A cryptocurrency is a currency the same as any you know, such as the dollar, or euro; the difference is cryptocurrencies are digital and designed to be secure and anonymous. Transfers have minimal processing fees, avoiding steep wire transfer fees charged by banks.
The first cryptocurrency to be created was Bitcoin back in 2009. Nowadays, there are lots of other cryptocurrencies, often referred to as Altcoins.
Bitcoin is the first worldwide decentralized cryptocurrency, invented in 2009. The inventor is an unknown programmer, possibly a group of programmers, under the name of Satoshi Nakamoto.
Transactions take place between users directly, so there is no need for a bank or financial institution to intervene. These transactions are recorded in a public distributed ledger called a blockchain. Bitcoin can be exchanged for other currencies, such as dollar, euro, pounds etc.
Bitcoin is starting to be accepted as an everyday currency in over 100,000 shops, businesses and online services, such as Amazon. The name 'bitcoin' comes directly from the words, bit, as in a binary digit and coin, obviously from the monetary term.
All bitcoin transactions have to be logged in a ledger to keep them from duplicated or fraudulently traded. The blockchain is a public ledger of all bitcoin transactions that have ever been executed. Each block contains a link to a previous block, a timestamp and transaction data.
The value of a bitcoin fluctuates daily, with highs and lows like any other currency. As of June 20th, 2018, a bitcoin is worth 6,819.47 USD.
For the most accurate value of a bitcoin, check out our bitcoin charts page.
The value of Ethereum, as with bitcoin and other currencies like USD and EUR, changes every day. As of June 20th, 2018, an Ethereum is worth 540.74 USD.
For the most accurate value of Ethereum, check out our ethereum charts page.
You do not need your own mining hardware to begin mining for bitcoin and other digital currencies. There are other options available to you, such as cloud mining.
Cloud Mining is the process of mining for cryptocurrencies (such as bitcoin and ethereum) using a remote data center with shared hashing (or processing) power. This allows you to mine for cryptocurrencies without needing your own hardware, paying to maintain the hardware or pay for the electricity supply.
This question depends on many factors; how powerful your mining rig is, the current difficulty level of bitcoin, if you're solo mining or pool mining, the cost of your rig and electricity fees or your mining contract, the list goes on.
For this reason, this question doesn't have a straight forward answer, but put simply, you will never mine a whole bitcoin on a typical laptop. The power costs alone to keep the laptop running would outweigh how much you mine. Even if you come up with a magic way of mining with low outgoings, the difficulty is increasing every day, so it will only get harder.
The profitability of mining for cryptocurrencies depending on many factors, such as the difficulty level of the currency and the current price against the dollar. Therefore the profitability changes from day to day. You can use the cryptocurrency calculators we've built to work out your profit margins per day, week, month and year, using up to date, real time figures. Here's some of the most popular mining calculators:Bitcoin Mining Calculator
In short, no, profit is not a guarantee. Cryptocurrencies are the same as any other currency, the exchange rate and value fluctuates daily, and as such, can affect your profit. It's a good idea to keep your eye on the way currencies are moving in order to make an informed decision about how much to invest, when to invest, and when to draw down your currency. We've made a page of charts for each currency, here are some of the more popular ones for your reference:Bitcoin Charts
Cloud mining services are very secure. They offer two step authentication on your log in and keep your personal information safe. Each has an area to input your cryptocurrency wallet ID and this is where your currency can be paid to. The wallet is up to you to keep secure.
If you carry around cash and lose your wallet, your cash is gone. If you give your cash to someone else, it's gone. This is the same with bitcoin or cryptocurrency wallets. If you lose your wallet ID, or give it to someone else, it's no longer yours. It's secure as long as you treat it as such. Never post your wallet ID online; you wouldn't leave cash laying on the floor and expect it to still be sitting there a few days later.
Two-factor authentication, also known as two step or 2FA, is an extra layer of security on top of your username and password. This type of security is called "multi factor authentication". It requires an extra piece of information to be entered after the username and password and is something only the user knows, or has on them physically, such as a hardware token.
The most common method of multi factor authentication is an app on your phone, browser, or tablet, which will give you a randomly generated code to input. The code changes frequently, so even if someone knows your password, they would still need your phone or security key to access your account, which can only be used once and is too long to be guessed.
A good example of a two step app is Google's Authenticator App, for Android, iPhone, or BlackBerry. It can generate verification codes, and even works when your device has no phone or data connectivity. You can read more about it here.
A paper key, also known as a mnemonic recovery phrase, is a combination of twelve, automatically generated, random words. These are provided to you when you open a new wallet. It is very important and should be written down with pen and paper and then stored in a safe place. Taking a photo or screenshot on your phone, writing it on a note on your laptop or simply trying to remember it are all very bad ideas. Do not type it into any website, treat it like you would a big stack of cash.
If you lose access to your account, your hard drive becomes corrupt, you wish to move your funds to a new wallet or you lose the phone or laptop that the wallet is stored on, you will need to know this paper key in order to regain access.
The order of these words is paramount, so trying to be smart and jumble them up when you write them down is also a very bad idea. An example of a paper key is:
witch collapse practice feed shame open despair creek road again ice least
Put simply, hot wallets are connected to the internet, cold wallets are not connected to the internet. Hot wallets are like the checking, or current, account if your bank. You don't keep too much in there and your day to day spending draws from this balance. Cold wallets are the savings account of your bank. This is where to bulk of your money is kept and is rarely accessed. Each has its benefits and drawbacks, most people use a combination of both, to give them the benefits of each.
A multisignature wallet requires signatures of more than one person to authorize a transaction. This is popular with big business that trade in bitcoin and do not want to entrust one employee with all of the bitcoin transactions. It would require several employees to accept the transaction in order to be completed.
A standard cryptocurrency wallet is used to store your cryptocoins. It has a public address which you can give out to others in order to send or receive funds. You are also provided with a private key that you can use to spend your cryptocurrency.
A hierarchically deterministic wallet, also known as a HD wallet, allows to create many public address. A new address is generated after each transaction is completed. The old ones will still work, but for anonymity and security reasons, it is good practice to use a new address each time.