How to start mining? Start here and learn the crucial basics perfect for mining beginners.
What is cryptocurrency mining?
Cryptocurrencies (or coins) are mined by miners (individuals or organizations) using their computing (hashing) power to process transactions and earn rewards. To be more specific, mining is the process of recording transactions to the public ledger (blockchain) with an incentive to receive a miner reward.
This process is very resource-intensive. It requires substantial computing power to meet the cryptographic rules which secure the system and to ensure that all network participants agree the blockchain is valid and accurate. This means that you need both hardware to do the computing and a stable electricity supply to power the hardware. Moreover, as more computing power is added to the network, the difficulty of solving the ‘puzzle’ which allows miners to earn a reward increases – that is where the mining pools come into play.
What is a mining pool?
A mining pool is a service that merges computing power from multiple miners to increase the frequency of finding a new block. The pool then distributes mining rewards among the pool's miners based on their amount of contributed computing power and stabilizes miners’ income as a result.
If you want to venture into cryptocurrency mining, there is no better place than Slush Pool. We were the first in the world to successfully implement the concept of pooled mining in 2010 and we have been operating since then.
Note: please remember the difference between mining pools and cloud mining services (organizations renting out hashing power which can be redirected to a pool to earn mining rewards).
What hardware do you need to start mining?
In order to mine a particular cryptocurrency, you will need hardware suited to that cryptocurrency's mining alrogithm (e.g. SHA-256, Equihash, etc.). Depending on a coin you will either need an ASIC miner (computer exclusively designed for mining specific coins) or PC with powerful GPUs (graphics card) or, in some cases, CPUs (processor).
Each coin may require different hardware depending on the mining algorithm used, and that hardware may or may not be useful to mine other cryptocurrencies! You must always ensure that your mining equipment is suitable to mine your chosen cryptocurrency. Mining with unsuitable hardware will either be unprofitable or will not work at all.
While GPU-based miners are capable of mining all coins which can be efficiently mined by graphics cards, this rule does not apply to ASIC miners. For example, an ASIC miner designed for mining Bitcoin (SHA-256) cannot be used for mining Zcash (Equihash), because the two coins have different mining algorithms and the hardware used to mine SHA-256 is too specialized to be used in other applications.
What else do you need for mining?
Besides mining hardware, a stable electricity supply is also required. Remember that the cost of electricity significantly affects your profitability, so try to arrange the lowest possible price. Next, you will need a stable internet connection – remember that stability is the key here, not necessarily the speed. Internet outages will prevent you from mining, whereas slower bandwidth speeds can have a small impact but won't disrupt your ability to mine.
Ready to go? Setup an account to join our pool and configure your miners according to our guides.