If you keep up with the news, you’ve most likely seen headlines about crypto mining. Cryptocurrencies are mined, which requires powerful computer hardware and resilient software. When PCs on the network check and process transactions, new tokens are created or mined. Anyone can participate in the mining process, and the chances of winning a reward (coinbase) are high. Mining is more popular than ever among participants, some even resorting to smartphone crypto mining. But is it worth the effort? In the end, what matters are your goals and resources.
What Is Crypto Mining, And Why Is It Necessary?
Every time a cryptocurrency transaction occurs, a miner tries to decrypt the block enclosing the transaction information to earn a reward using a high-power computer. Mining is a competitive process that requires solving complex math problems. The first to solve the problem announces it. The block is then examined by the rest of the miners in the network, trying to reach a consensus. There’s a competing approach to Proof of Work (PoW), namely Proof of Stake (PoS), which reduces the processing power needed to validate block information and transactions. Validators are chosen according to their holdings in the associated cryptocurrency.
Cryptocurrency mining serves two purposes: it confirms transactions on the network (and makes them fully legit) and generates coins. To solve the puzzle, miners try to calculate the hash of a block; if they find the correct hash, a new block of information is added to the ledger. Since people use their computers to participate in the blockchain network and pay transaction fees, they’re awarded tokens for each block they successfully mine. The process starts all over again until another miner finds a suitable hash. Determining the exact time to mine crypto depends on computing power, the type of equipment used, and the competition.
The Environmental Impact of Crypto Mining Explained
Cryptocurrency mining has a climate impact as it relies on a computing process to verify transactions. Bitcoin’s annual energy consumption is similar to that of Argentina, for instance, so it consumes a lot of power to keep things running. The good news is that not all crypto mining is energy-intensive. Although Proof of Stake blockchains use cryptography, their energy consumption is substantially lower. Instead of requiring computational power, PoS assigns the right to validate transactions based on the percentage of tokens locked by each person. Ethereum is now a Proof of Stake network, but the much-awaited scalability features will be available after 2023.
Is It Profitable to Mine Crypto on Your Mobile Phone?
You can mine Bitcoin, Ethereum or any other cryptocurrency on your phone. While it’s a relatively straightforward process, it’s not profitable. Cryptocurrency mining on your mobile phone isn’t worthwhile because you risk running into operational issues; it will overheat and damage your battery and other components. Moreover, mining spreads malware so that malicious actors can steal your data. You should better put time and effort into a traditional mining setup. Better yet, buy digital assets at an exchange if you don’t want to waste much of your time. Learn how to buy crypto to develop a sound basis for success.
How To Use Your Mobile Phone to Start Mining Crypto
As mentioned earlier, mining cryptocurrency on your smartphone has cons and is more of an industrial activity. If you still want to proceed, here’s how to profit from this venture.
Start Solo Mining
As the name suggests, solo mining is an attempt to confirm blocks of transactions on the network alone as an individual miner. When BTC mining first appeared, it was done individually, and the fierce competition made it difficult for solo miners to keep up and thrive. You’ll need suitable hardware/software and a wallet to accommodate your stored tokens for solo mining. The Samsung Galaxy S21, for instance, offers high levels of performance and efficiency, not to mention that it comes with 16GB of RAM. If you want to mine individually, you must run a full node, so you’ll see a spike in electricity usage.
Join a Mining Pools
People work together in the pool mining process to increase their chances of mining a block and share the rewards. They operate in the same way as staking pools via the PoS mechanism. Several mining pools based on blockchain servers, such as Binance Pool, let you mine Ethereum Classic and other cryptocurrencies. You contribute computational power and receive shares that are transformed into rewards. Some pools have created mining apps. Attention must be paid to the fact that you can’t avoid upfront costs. The mining pool fee is deducted from the rewards. The mining pool operator must ensure transparency and trustworthiness among members.
Store The Bulk of Your Crypto in A Wallet
Just like you need a wallet to protect your cash, you need a wallet to store the crypto you’ve mined on your phone. A cryptocurrency wallet allows you to monitor the balance of your digital assets. You can share your public key with other people or institutions so they can send you money or take money from your account (if you authorize it). A wallet can store digital collectibles such as NFTs. Key factors to consider when choosing a cryptocurrency wallet are security, portability, and multi-currency support, to name a few.
Conclusion
Questions have been raised about the longevity of the mining industry. More than 90% of Bitcoin’s total supply has already been mined, and the coming of Ethereum 2.0 leaves miners with fewer options. We can only speculate what will happen, but it’s possible that cryptocurrency mining will continue. It’s up to miners to explore what options suit them perfectly. Mining may remain an asset strategy, and only a few might oppose it. For the time being, crypto mining is a potentially rewarding enterprise.
All in all, it’s possible to mine cryptocurrency using the processing power of your Android or iOS phone. Mining can be expensive and energy-intensive – but you may find it worthwhile. Still, the reward is significantly smaller.
