Satoshi Nakamoto introduced the world to bitcoin in 2008. Many people speculated that the virtual currency would never gain traction and become extinct. However, it has grown faster than even some of the staunchest supporters originally predicted. Advances in AI and machine learning technology have been important in setting the trend for bitcoin.
It’s been over a decade since the cryptocurrencies were introduced to the world and since it has become increasingly popular. And that is mainly due to the availability of trading profits that has driven a HUGE population to take interest in it.
Many people would like to increase their wealth by helping mine bitcoin and other cryptocurrencies, as well as to help them make more profitable cryptocurrency trading decisions. They are discovering that machine learning technology can help them achieve this goal.
Using Machine Learning Can Be Very Valuable for Cryptocurrency Miners and Traders Alike
Many people have become wealthy by mining cryptocurrencies. But apart from trading, there is another way to earn some profit off of this new technology and that is mining. Some people like to call it the “money making machine” and while not technically accurate, that’s what you can do with it.
However, mining can be pretty complicated for someone just stepping into the world of cryptocurrency, this is where you might consider getting and play cryptocurrency games and farm coins that way. But in this guide, I will try to break it down for you to make things easier for you to understand. You will learn that machine learning can make it a lot easier to mine cryptocurrencies profitably.
What is Cryptocurrency?
Cryptocurrency is a digital asset similar to your money, except it operates entirely online. It is termed decentralized because it is not controlled by a bank or any other central organization, which is one of the primary advantages of bitcoin.
Cryptocurrencies are very secure, because they rely on the blockchain network. Blockchain is governed by some of the most sophisticated machine learning algorithms that are designed to maximize security. It is virtually impossible to break the blockchain network, since the data is heavily encrypted and new machine learning algorithms are being released regularly to weed out crooks and hackers.
There are a lot of new cryptocurrencies out there, but as miners, we usually only focus on the ones that are profitable. Your money is yours with cryptocurrencies, and you keep it in a wallet made up of a public and private key. Think of your public key as your email address, and your private key as your password to receive or transfer money.
Now that you know what a cryptocurrency actually is, let’s talk about what mining is and how to do it the right way by using machine learning technology.
What is Cryptocurrency Mining?
The process of verifying transactions and minting new currencies from blocks is known as cryptocurrency mining. It is conducted by highly sophisticated machine learning algorithms. Richmond Alake, an author with Towards Data Science, talked about some of the . Alake pointed out that machine learning has helped optimize cryptocurrency mining platforms and make them far more secure.
In fact, there are two forms of mining: proof of work and proof of stake. All mining hardware like the GPU falls under the category of proof of work.
The mining gear uses electricity and processing power to solve randomly generated complicated problems, machine learning has helped some miners solve these problems much more efficiently. Miners are paid whenever they find the correct solution. While proof of stake is similar to being a shareholder, it entails holding a specific amount of a cryptocurrency in order to establish a node.
The bulk of newbie miners, on the other hand, are primarily interested in the proof of work technique of mining. There are several different algorithms that cryptocurrencies fall under when it comes to proof of work. Algorithms are essentially various problem areas; thus, certain mining gear excels at specific currencies with specific algorithms more than others.
Your hash rate is the unit of measurement for your mining power. The hash is seen as an effort to solve the problem. So, if your hash rate is like 40 mega hashes, your system is trying 40 million different solutions every second, which might sound like A LOT, but there’s even more.
How to use machine learning to start with Mining as a Beginner?
It is clear that using machine learning can help anybody that wants to make more money off of cryptocurrencies. You can use this technology to identify better trading opportunities by using AI to forecast future prices. However, it can be far more useful when it comes to mining cryptocurrencies.
So, as I mentioned earlier, there is a variety of mining but keeping in mind that the majority of people here are beginners, I will explain the one that is the easiest to setup and use, which is GPU mining.
In GPU mining Graphic cards are used to increase computing power. So, the more and better GPUs you have, the more mining power you’ll have, and this is the most residential-friendly alternative because basic miners create a lot of heat and noise, but GPU mining is… silent. As a result, you may utilize GPU mining at your house or anywhere else.
Now that we’ve covered the various types of mining rigs, we can move on to the various types of mining services. There are a plethora of mining services available. However, we will be discussing the following ones:
- Pre-Built Mining Rigs
- GPU Rentals
- Cloud Mining
Starting with the Cloud Mining, most of the time, it’s unreliable. Since your money is going to a third-party service that should be giving you hash power in return, you never know when these services will close on you or leave. There are a lot of scammers out there who will take your money and promise you a certain amount of hash power that you don’t really get. You will want to use AI and machine learning tools to help filter out the scammers as well.
The best thing that you can do is buy or setup your own rig with bunch of powerful GPUs. This will not be cheaper but it will make sure that everything is under your control and you get the best return possible.
Although, if you want to make a profit off of GPU mining, you really need to keep an eye on the electricity prices. If that’s not the problem you can make some good profit from your mining rigs but if electricity cost is higher, you won’t be able to make much.
Also, you’d need to keep the GPUs cooled down to working temperature otherwise they can just overheat and die, which will cost you a ton of money.
You can even buy the mining machines, which are like pre-built machines but the problem with mining machines is that it makes too much noise and needs to be placed in a cold temperature. If you want to mine inside your room or anywhere else inside the house, using a mining machine to mine coins might not be the best idea.
Lastly, you also need to have a stable internet connection to be able to mine continuously and consistently. There are a bunch of ways you can start mining by joining the mining pool and for that you need to make sure that your internet connection is stable.
Which coin Should You Mine?
So, this is where things get interesting because there are literally thousands of coins out there and many more coming out. But as we talked about GPU mining, the most profitable coin would be Ethereum but in order to mine Ethereum, you’d have to get a GPU with at least 6 GB of Vram for it to mine ETH.
But then again, things keep changing rapidly in the crypto market, so you need to keep an eye out for other coins as well. I hope this beginner guide was helpful in clearing some things up and made you more confident about crypto mining.
Machine Learning Can Be Essential for the Future of Cryptocurrency Mining
More cryptocurrency miners are discovering the benefits of using machine learning technology to improve their profitability. You should consider utilizing machine learning if you hope to make more from your bitcoin mining efforts.