With the current rise of cryptocurrencies, many people wonder if every coin needs to get mined. After all, the subject is gaining a broader audience, and more people want to make a profit off cryptocurrencies. Let’s clear that up.
Do all cryptocurrencies need to be mined?
Bluntly answering: no. Most cryptocurrencies need to be mined, and that alone causes much of the curiosity people have about the subject. However, there is a list of crypto coins that don’t require mining.
When the first cryptocurrencies showed up and gained popularity (Bitcoin and a variety of altcoins), mining was a must. The security protocols of such coins are only made possible because of the required mining.
Nowadays, however, many crypto coins have come up with different approaches to security and privacy that don’t really require common people to become specialized miners.
Read: Do All Cryptocurrencies Work The Same?
There are pros and cons to both types of coins. Mining is a way of creating decentralized monetary systems and ensuring that it remains as decentralized as possible.
However, it requires exceptional hardware (professional miners are always after the best GPUs), and the electric consumption is high.
On the other hand, non-mined coins/tokens don’t require high electricity consumption, and validation of blocks occurs differently.
In short, these coins use a method called “proof-of-stake.” You have to own (have a stake) a coin to be eligible to prove transactions.
The longer you are the owner of a coin, the more likely it becomes that you will get chosen to validate transaction blocks.
The rewards for this type of validation are different. Instead of being rewarded with new tokens or token fractions, you get the aggregate fees from a transactions block.
What is mining?
Crypto mining is a process that requires high-powered computers to solve complex mathematical equations to try and validate a block of transactions. It can get done by an individual, a group of people, or even a business.
The mathematical equations miners try to solve are a component of the encryption protecting transactions data so that no one can know who the receiver and sender are.
This encryption, and promise of safety, is one of the big appeals of crypto coins.
Additional Reading: Why Do Cryptocurrencies Have To Be Mined?
The word “try” is defining, because miners are competing against each other to be the first to solve the equation of a given block and get the reward.
The reward is the main reason why miners exist. Each mineable coin has a different fixed reward, which gets halved every four years or so.
Bitcoin, for example, has a reward of 6.25 BTC. Also, each crypto coin takes a different amount of time to get mined. Bitcoin takes minutes, while Ether takes seconds.
Miners can invest their mined tokens or coins by trading them for real money, for altcoins, or they can accumulate many of them and wait for the currency they own to go high in price.
Which cryptocurrencies can’t be mined?
Many crypto coins use different technology to ensure privacy and safety that doesn’t require mining.
Ten very popular non-mineable crypto coins are:
- VeChain Token
- Stellar Lumens
- TRON – There is a workaround, though, to mine TRON
What happens if no one mines Bitcoin?
That is an arduous question which many people are curious about, so let’s think deeply.
Mining is the process that guarantees the validity of blocks. You can only make Bitcoin transactions because a large amount of people is mining (called miners).
If, all of a sudden, all miners stop working (although this is very unlikely), there is no one to validate transactions.
You can still try and buy or sell things with BTC. However, the transactions won’t get finished.
In such a scenario, nobody is creating blocks to differentiate transactions. So, it is impossible to be sure which BTC block belongs to who. The whole network stops working.
What happens when all 21 million Bitcoins are mined?
If anyone reading this doesn’t know yet, Bitcoin has a fixed number of 21 million blocks that can be mined. Not all crypto coins have a limited supply, though. Ether, for example, keeps adding assets as the demand grows.
That way, Ether is characterized as an inflationary cryptocurrency (this may change though), while Bitcoin is a deflationary one.
Currently, more than 18,5 million BTC blocks have been mined. One could look at the info and think that soon all coins will be mined.
However, mining rewards are halved every four years or so, and BTC mining will still take many years (some say that it will only end around 2140).
Still, what will happen when the last block gets mined? How will transactions get validated if no miners are working?
Well, that logic is not quite right. Even if there is no block reward for miners, they can still get money from mining. Every transaction has a fee that goes to miners.
Right now, such fees are small compared to the value of BTC. But they can rise to thousands of dollars per validation, especially if the number of validations needed increases and the price of BTC goes up significantly.
Others argue that the Bitcoin protocol might change in the coming years, and developers might add new blocks to get mined. No one can be sure about that, though.
Can Anyone Mine Cryptocurrency?
Right now, yes. That is if you have access to a minimally decent computer. Years ago, when the first crypto coins started popping around, it would be a weird thought to suppose that anyone could mine cryptos. Nowadays, however, new ways of mining have come around.
If you don’t have a powerful computer, you can join a mining pool. A mining pool is a group of individuals that combine their computing power to mine crypto coins.
The profits are then shared proportionally to the amount of power each person in the group contributed.
Another option if you don’t have the time to learn about mining pools or regular mining is cloud mining. Through cloud mining, you hire a cloud service that will mine the coins for you. In exchange for their effort, you pay a fee.
Is Mining Hard?
It depends on which crypto coin you want to mine. One factor that contributes to a cryptocurrency’s difficulty in mining is the size of the mining network.
The more miners there are in a network, the harder it becomes for one single miner (or mining pool) to validate a block and get rewarded for the effort.
Bitcoin, for example, is troublesome to mine nowadays due to its high price. Everyone with the financial conditions to set up the required mining rig for Bitcoin will do it and join the competition.
Bitcoin mining has become such a high-level activity that exists a component called ASIC that miners need to get to mine.
When BTC was just released, its mining difficulty was 1. Around November 2020, it was observed that the difficulty rose to 16.7 trillion, which means you have one chance in 16 trillion to mine a block.
However, there are thousands of altcoins nowadays to choose from. You don’t need to think that the only valuable crypto coin is Bitcoin — that is very far from the truth.
What Cryptocurrency Is Easy To Mine?
Since the difficulty level of mining any given coin comes from the number of miners securing the network, it is safe to think that some coins will be easy to mine and more profitable for new miners. Let’s take a look at some of them:
Additional Reading: Alternates to Mine From Home
- Algorithm: Proof-of-Work
- Hashing Function: CryptoNightR
- Price: $418,01 (May 3rd)
- Block Mining Reward: 2.47 XMR
If you want to mine using only your computer’s raw power without any early investments and still make a profit, Monero is a good option. It has advanced security protocols, making it attractive. And is also a profitable coin to mine.
To mine Monero, all you need is a computer and the Monero mining software. The most popular mining software to do this is MultiMiner and GUIMiner.
To store your mined coins, you need a wallet, and that can be the Monero desktop wallet.
If you want to improve just a bit of your mining power, you can invest in an AMD graphics card.
Nvidia cards don’t do the job with the same quality as AMD. But if that is what you have right now, you can go with it.
- Algorithm: Lyra2REv2
- Hashing Function: Verthash
- Price: $1,45 (May 3rd)
- Block Mining Reward: 25 VTC
Vertcoin is an easy-to-mine altcoin that is ASIC resistant. It is meant to be accessible to anyone with computing power to mine.
Mining Vertcoin can be done through a miner with a GUI that offers two different pools, each one developed for GPU-based and CPU-based miners.
To mine Vertcoin, you can use Nvidia or AMD. It is up to you.
- Algorithm: Proof-of-Work
- Hashing Function: Scrypt
- Price: $0.3898 (May 3rd)
- Block Mining Reward: 10,000 DOGE
Dogecoin is not the most profitable coin to mine, but you can earn some money in the long run. The attractive about it is how easy it is to mine. Anyone with any computing power can download the wallet and the mining software and start the process.
If you are a GPU miner, you can use CGminer, CudaMiner, or GUIminer. If you are a CPU miner, you can use… CPU miner!
An article like this is essential to show that mining is not some otherworldly fantasy, but something that anyone with minimally decent computing power can grasp.
Bitcoin is genuinely arduous to get in hands nowadays for beginners, but there are many altcoins you can explore, starting from the three listed above to even coins that don’t require mining.