What is Mining?
Cryptocurrency mining is a process that cryptocurrencies are verified and added to miner’s account by solving complicated mathematical problems associated with a block transaction data. The first miner solving the problem is rewarded with a cryptocurrency such as Bitcoin. It is a competition and the miners are supposed to better computers consisting of specialized GPU, chip or ASIC etc… In addition to that, the miners must have memberships in online cryptocurrency exchange and mining pool.
Two types of mining are present.
- Solo Mining
- Cloud (Pool) Mining
Solo Mining vs. Cloud (Pool) Mining
|Solo Mining||Cloud Mining|
|What is Solo Mining? A miner performs the mining operation with his own computer by his own. The mined blocks are generated to the miner’s credit.||What is Cloud (Pool) Mining? There is a host company with Bitcoin mining hardware. A miner pays to the company and rents some part of the hardware (hash power). The company makes a payment to the miner based upon his amount of hash power.|
|Pros: 1) No outrages with high uptime, 2) No fees.||Pros: 1) Providing steadier income,|
2) Generating 1-2% higher long-term income before fees.
|Cons: 1) Erratic income, |
2) Wasting time because of supporting network pull.
|Cons: 1) Interruptions from outages at the pool provider, 2) Tendency to generate smaller short-term income because of fees|
Cloud mining is becoming more and more attractive for miners because of low cost entry, minimal risks, while solo mining may need to procurement, configuration, maintenance of specialized hardware. Also cloud miners can turn off their computers and save time because they rent another computer for mining.
Mining is briefly explained here. If you have any further questions, please feel free to ask.