Despite its current lull, there are more people than ever entering the crypto space. Some of these people are looking for a way to earn a fast buck and heard they can do so by crypto mining in Canada.
It’s true you can make money mining crypto, but it’s also true that it’s not as easy as people think.
Crypto mining is an energy-intensive endeavor that requires massive amounts of computing power and electricity. While you could potentially earn crypto when crypto mining in Canada, there’s also the potential to invest a lot and see little reward.
We’ll tell you all about crypto mining, ways to mine crypto, and the advantages and drawbacks of crypto mining. Check out what you need to know in the guide below.
What is Crypto Mining?
Of course, there’s more to it than just hooking up your computer and letting it go to work, so let’s dig a little deeper.
While crypto mining doesn’t necessarily require you to own a mining rig, for the sake of simplicity, we’re going to pretend as though you do.
You set your computer up to solve complex algorithms and if it is the first to do so, you earn a small amount of crypto. Solving these algorithms is called Proof-of-Work in the crypto world.
But it’s not as simple as that. You’re not the only one mining. There are hundreds of thousands of other miners out there.
The more miners, the tougher the algorithm. While this helps bring balance to crypto mining, it also motivates people to use faster and more powerful computers.
Unfortunately, this creates challenges for individual miners as corporations have now entered the mining game, establishing massive mining farms which suck up ridiculous amounts of energy.
We’re not going to get into all that right now, just something for you to note.
Ways to Mine Cryptocurrencies
We mentioned using your own computer to mine crypto, but there are actually several ways you can go about it. Listed below are some of the most popular methods for crypto mining.
For those of you who aren’t interested in building a computer that can compete with the big boys, Cloud Mining might be the way to go.
It’s an excellent option for anyone who wants to mine crypto but doesn’t want to mess with all the necessary setup.
When you’re cloud mining, you’re paying someone else (usually a large corporation) for the use of their equipment.
You’ll most often see these referred to as “rigs.” With these rigs, you can mine crypto without lifting a finger – other than clicking your mouse to pay for the rental.
You choose the length of the rental period and during that time, any earnings mined are sent to your personal crypto-wallet. Keep in mind, however, that you do have to pay for maintenance and electricity costs, which are typically laid out beforehand.
Most of the cloud mining companies that offer their services have large mining farms with dozens of rigs operating in tandem. These are places that have perfected the art of mining cryptocurrency.
Types of cloud mining
If cloud mining sounds like the way to go, you should know that there are two options: paid cloud mining and free cloud mining. Of course, if you’re just getting started, it might make sense to explore the free option.
Just keep in mind that you’re likely to experience extremely slow speeds, minuscule payouts, and additional terms and conditions.
Once you’re comfortable with free mining, make the transition over to paid mining. With paid mining, the first thing you’ll want to do is find a cloud mining host – Shamining and Ecos are good options.
Review the plans and find the one that works best for you and your budget. Some sites let you customize your plan to fit your needs.
After you choose your plan, pay the host, provide your crypto wallet address, then start mining. That’s all there is to it. Most committed cloud miners tend to break even after 18-months.
It will be different for everyone and can change drastically due to market conditions, but if you’re not in it for the long haul, cloud mining might not be the way to go.
Next up on our list of ways to mine is ASIC mining. An ASIC (Application-Specific Integrated Circuit) is a device specifically developed to mine cryptocurrency. That’s what its sole purpose is.
These devices are very well known throughout the crypto world as they are significantly superior to both CPU and GPU mining, which we’ll talk about in a bit.
The problem with ASIC mining, which is far and away the best way to mine crypto, is that they are so powerful they take opportunities away from other miners.
With multiple ASIC mining rigs, companies can corner the market on specific cryptocurrencies, which pretty much goes against what crypto stands for.
Many within the industry want ASICs banned while others say that anything is fair game in the world of crypto mining.
If you do decide to go this route, be prepared to pay a pretty penny, as one ASIC will run you thousands of dollars.
When crypto-mining first came to the forefront, it seemed as though everyone was mining using their computer’s CPU. That has since changed as better and faster alternatives – like ASIC and GPU mining – have come to the forefront.
CPU mining is very slow. It can take months to realize even the smallest amount of crypto.
The problem is that even that tiny amount of crypto has probably cost you ten times in energy.
Sure, you can try to offset the cost by finding a place with cheap electricity, but what are the odds of that? Not very high. So then why mine with a CPU?
Simply put, because anyone can do it. The only barriers to entry are owning a computer and having internet access. That’s it. WIth a few programs and a decent desktop, you can start mining right away.
CPU mining is important because it attracts crypto miners to the market who may eventually start mining with more advanced methods.
Last on our list of ways to mine crypto is GPU mining, which is arguably the most popular way to mine. You’ll often see GPU rigs advertised if you do a quick search on crypto mining.
These are the rigs used by cloud miners – who are professional miners – so you know they’re good.
GPU mining is fairly cheap and very efficient. Your initial investment will be costly, but once you have your mining machine up and running, you’ll get to your break-even point much faster.
Some see profits as soon as six months. Of course when that happens for you will depend on how much you spend, how the market behaves, and several other factors.
If you want to start crypto mining but aren’t sure about cloud mining, GPU is your best bet.
Your initial investment might be a few thousand dollars, but you’ll see returns much faster than you would with cloud mining or CPU mining.
Advantages of Crypto Mining
Here are some of the advantages to mining cryptocurrency:
- Earn cryptocurrency
- Multiple methods available
- Minimal barriers to entry
- Offers valuable experience
Disadvantages of Crypto Mining
These are some of the drawbacks to crypto mining:
- Requires a lot of energy
- Initial investment can be costly
- Risky venture as you could potentially lose your investment
- Participating in a volatile market could quickly turn profits into losses
As you can see, there are several ways to mine crypto. Some are more expensive while others take longer to realize a return on your investment.
Regardless, remember how volatile the crypto market can be and only spend what you’re okay with losing, even if you expect to earn massive profits. Otherwise, happy mining!