However, not all cryptocurrencies have such a difficult mining process. It would be hard to believe, but you can mine a particular cryptocurrency at home, using the CPU you currently have. You don’t have to go broke buying all the fancy mining equipment. And if you can get an AMD GPU, that would be an added bonus. Otherwise, you don’t even need that to mine one of the top 30 digital currencies: Monero.
What is Monero?
Monero (XMR) is an open source digital token. It was launched in 2014 and rose to popularity thanks to the anonymous transaction feature it offers. While it is similar to Bitcoin in many spheres, it distinguishes itself by having strong privacy features, making your transactions untraceable. Its underlying blockchain hides the identity of the merchant and the amount of the transaction.
It is one of the top 30 coins with a market cap of over $2 billion and uses a proof-of-work (PoW) consensus mechanism. Its developers strive to maintain its decentralization by allowing even amateur miners to participate in the mining process. They have kept specialized machines like application-specific integrated circuits (ASICs) away from the mining scene. For this reason, CPU mining is the best way to mine Monero (XMR).
What is XMR mining?
XMR mining is the process of verifying transactions on the Monero blockchain. The miners get rewards in the form of XMR coins. The mining process works the same as Bitcoin, except with a greater focus on privacy.
Monero mining rewards
As of January 2021, miners receive 1.26 XMR for every block they add to the blockchain, and a new block is mined every 2 minutes. Depending on your CPU/GPU, this can amount to around $0.45 to $1 in profitability, per day per mining system.
Coins generally have a maximum circulation limit. For example, Bitcoin has a limited supply of 21 million coins. Once BTC reaches this hard cap, miners will no longer receive new coins for producing new blocks. They will only receive the fees attached to each transaction.
Monero, on the other hand, does not have a hard cap per se. It is scheduled so that once the circulation reaches the 18 million mark, miners will get a fixed reward of 0.6 XMR infinitely. This is called queuing and is designed to keep miners motivated.
How to mine Monero?
As mentioned above, you can mine Monero on any operating system using the hardware you have at your disposal. However, there are different ways to mine this privacy coin. They include:
To make it work in your favor, you may want to increase the processing speed of your device. Mining is a game of speed; the faster you solve the puzzles, the more rewards you can earn. Solo mining with just one CPU may be possible, but may not be financially viable, in which case joining a pool is your best bet.
(Edited by : Abhishek Jha)
First published: IST