Mining cryptocurrencies
Mining cryptocurrencies is the process by which new units of cryptocurrency are created. The exact details of how this works differs per consensus mechanism of the blockchain / cryptocurrency. In most cases when referring to crypto mining people refer to PoW mining which is done by powerful computers that solve complex math problems and get rewarded in cryptocurrencies when they find a solution.
Complexity
Mining Cryptocurrencies can seem fairly easy at first, but managing and optimizing mining systems gets more and more complex when adding more machines. A lot of people also forget to calculate their cost in hardware devaluation and electicity. Especially with the higher electricity prices it is hard to find profitable crypto mining systems.
Time
Once setup the machines run fairly passively. Machines do need maintenance though which is not much for 1 machine, but tends to add up when scaling a mining farm with a lot of machines.
Mining
Complexity
Time
Risk
Profitability
Risk
The risk of mining cryptocurrencies is in the most past in the depreciation of the mining equipment. If crypto prices drop, so does the price of the equipment as they make less money. And new and better machines will reduce the value of old machines too.
Profitability
The profitability differs per cryptocurrency and flunctuates with the price of that currency. Since ETH switched from PoW to PoS consensus the profitabilty of crypto mining has dropped drastically.
Mining methods
EarnCrypts is working on an overview of crypto mining methods, which will be added here once ready.
