Gold miners know the difficulty and danger associated with it, but of course, they know what they stand to gain so why not take the risk. Just like gold, cryptocurrencies like bitcoin needs to be mined in other to be available in the market.
Mining of cryptocurrency may have its challenges, but the thought of owning a bitcoin is enough to make you go ahead. Even though the price of bitcoin is a volatile one, you are still guaranteed a fair price by the time you are ready to sell off your coin.
Right now 17 million bitcoin have currently been mined. With a total supply of 21 million bitcoins, there are only 4 million bitcoins left to be mined. To mine a bitcoin, miners need a mighty computer, an ASIC miner, a GPU or CPU.
In mining, there are two kinds of operation that a miner might want to consider, the pool mining and solo mining.
Solo mining implies mining independently. In solo mining, users do not depend on a third-party system to mine a cryptocurrency. Solo miners directly point out their mining hardware to their local bitcoin wallet and start searching for blocks instead of joining a group of people to mine.
Pointing the mining hardware to their bitcoin wallet will seek for work on the coin network. After the miner completes the work, a block is generated. The miner is then rewarded for his or her work.
Solo miners do not need the help of other miners to solve a block since they have all the requirements for successful mining.
Pool mining involves a group of people putting together their resources in other to mine a bitcoin. Miners put together their processing power to unlock a block, and after share, the block reward according to the amount of processing power contributed by each miner. After generating a block, miners send a proof of work showing what their Bitcoin miner solved.
Being rewarded in solo mining may take a long time since the individual may need more computing power in mining. It could take years for very slow miners to generate a block.
Solo mining consumes lots of time and effort but still takes some time for a miner to be rewarded. The complex nature of the mining process also makes it quite difficult for miners to make a profit.
Due to the complexity of mining, it is somewhat beneficial to join a pool of miners who are working towards the same goal. They share the responsibility amongst themselves, and each contributes what they can within their power to generate a block.
For new miners, joining pool mining will help enhance your capabilities in mining since you would be working together with people who are already good at it. Rewards for solo mining may be more significant but occasional, hence, it is better to mine in a pool to get rewards often.