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After the invention of Bitcoin, digital currencies have gained fresh recognition in the financial industry and around the world. More than 2000 cryptocurrencies exist in the market today. Out of these digital currencies, some are known for adding an extra layer of privacy and anonymity to user credentials and transactions. One of them that has gained prominence in the crypto market is the Monero cryptocurrency.
Known for its privacy-enabled features, Monero is now ranked the 13th cryptocurrency in the market. With a market cap of more than $900 million, this coin has come a long way since its launch in 2014. Moreover, in over a year, its exponential price graph has yielded a return of almost 5000%.
With all this in mind, the first question that pops up in your head is how to mine Monero cryptocurrency? But, before we get to this, let’s explore what is so special about Monero.
What is Monero?
The godfather of all cryptocurrencies, Bitcoin operates on a decentralized platform. However, each and every transaction made on the Bitcoin network are public and can be viewed by anyone. Privacy is limited as a user’s entire transactional history can be viewed using the wallet’s public address. In order to resolve the concerns of privacy and anonymity of users, Monero cryptocurrency was developed.
Denoted by the letters XMR, Monero is a privacy-focused cryptocurrency built on blockchain technology. The protocol of the Monero network allows transactional details, as well as the address of the sender and recipient, to be left anonymous.
Similar to Bitcoin, the Monero protocol works on proof of work. Hence, XMR coins can be produced using the mining process. The growth in its popularity and price has drawn attention towards the mining of the XMR crypto.
Monero Mining Reward
Monero mining ensures that each transaction in the decentralized network is verified and simultaneously, new XMR coins are released. In order to incentivize miners and keep the network honest, a block reward consisting of XMR coins are handed out to miners.
The supply of XMR is capped at 18.4 million. At present, a new block gets released almost every 2 minutes. The mining reward currently consists of 2.12 XMR coins per block.
How to Mine Monero Cryptocurrency
Now that we understand the importance of this cryptocurrency, let’s dig further into how to mine Monero cryptocurrency.
Storing Monero in a Wallet
First and foremost, you would need a wallet wherein you can safely store your XMR coins. The wallet address, with a public and private key, will be used for sending or receiving XMR.
Hardware and paper wallet options are generally more secure to store cryptocurrencies. However, for better accessibility, you can also consider using a software wallet such as MyMonero. You would need to create an account in order to generate a private and public key.
Once your Monero wallet is created, you can store crypto that you receive while mining.
Note – Always keep your private/ login key in a secure manner. In the case that you lose or someone steals it, your XMR coins are as good as gone.
Solo Mining or Joining a Mining Pool
Before you start the process of mining Monero, you need to decide if you want to join a mining pool or indulge in solo mining.
A mining pool represents a group of miners that combine their hardware in order to increase the probability of receiving block rewards. The combined power of hardware gives the mining pool a better chance to earn XMR coins. The reward gets divided according to the resources each individual miner contributed. While the rewards are less, as it gets divided among a group, but consistent. Most mining pools charge a pool fee, which ranges anywhere between 0-2%.
Alternatively, in case you don’t want to share your rewards, you can go the route of solo mining. However, over the years, Monero mining has become difficult. So, for considerable returns, you will need to invest a significant amount into investing in mining hardware.
Monero Mining Hardware
One of the advantages of Monero mining, as compared to other popular cryptocurrencies like Bitcoin, is that you don’t need fancy and costly hardware equipment like ASIC, application-specific integrated circuit.
Using your CPU equipment, you can begin mining Monero from the four walls of your home. Some of the available CPU hardware for mining Monero includes AMD Ryzen Threadripper 1950X and Xeon L5640.
However, for more profitable mining, you need advanced hardware equipment like the Graphics Processing Unit (GPU). Normally, a GPU requires a larger investment as compared to CPU’s, but simultaneously, they yield higher hash rates. This further increases your probability of earning block rewards. Current GPU hardware equipment available for Monero includes AMD R9 280x.
Monero Mining Software
Once your CPU or GPU hardware equipment is set up, the next step is to download and install a software that will connect you to the Monero network.
Depending upon your OS, you will need to install a software that is compatible with your mining hardware equipment. MinerGate and XMR Stak are some of the popular software options available in the market. According to your OS, you can download the software and further run it on your computer.
Once the setup is complete, establish a test connection. Also, check if all the settings on your computer are in an orderly manner so that does not hamper the mining process.
That’s it. You can now enjoy the steady rewards of earning Monero cryptocurrency through mining. Furthermore, to gain a bit more perspective on how profitable your mining operation is, you can use a Mining Calculator for Monero.
In this guide, we have tried to cover all the basics on this privacy-enabled crypto, what is different about it and also how to mine Monero crypto.
Aside from its prominence in the cryptocurrency market, the coin offers key features of privacy and anonymity, which makes it more favorable. Due to its popularity, mining operations for Monero have quickly taken off. However, profitability in Monero mining also depends upon various other factors such as electricity costs, power consumption, hashing rate, etc. Do thorough research before planning to invest in the mining process. Lots of luck!