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Introduction
Welcome to Cryptocurrency Mining For Dummies. We’re here to help you enter the wonderful world of cryptocurrency mining. Of course, you don’t need our help. You can just go to Google or some other major search engine, search, and jump right in. You’ll find plenty of information to help you!
Hah! Try it and see. It’ll be like drinking from the proverbial firehose — you’ll drown in a flood of confusing blog posts, conflicting “news” articles, unintelligible wiki articles, misleading YouTube videos… .
So that’s where we come in. Our job is to break it all down into intelligible, easy-to-digest, bite-sized pieces that ordinary folk like yourself can read and understand.
About This Book
This book explains, simplifies, and demystifies the world of cryptocurrency mining. You find out what you need to know and do in order to decide if and how you’re going to begin cryptocurrency mining.
In this book, we explain
How cryptocurrency mining works, and what it’s for (it can’t just be a way for you to make money, right?)
The different algorithms and how they function — Proof of Work, Proof of Stake, Delegated Proof of Stake, and more — and what hashing is all about
The different types of mines: pool mining, solo mining, cloud mining
The different types of hardware: CPU mining, GPU mining, FGPA mining, and ASIC mining
How to pick the right cryptocurrency to mine
How to find and work with a pool mining service
How to set up your mining hardware and software
How to calculate your potential earnings (or losses!), taking into account network hash rate, your mining rig’s hash rate, currency exchange rate, the price of electricity, and so on
Where to find a plethora of helpful resources to guide you on your cryptocurrency mining journey
And plenty more!
Foolish Assumptions
We don’t want to assume anything, but we have to believe that if you’re reading this book, you already know a few things about the Internet and cryptocurrency. We assume that you understand how to work online and work with personal computing equipment. We also assume that you know how to buy and sell cryptocurrency, how to work with exchanges and wallets, and how to keep it safe.
This alone is a complicated subject, which would take an entire book to explain. It is essential that you understand these basics; this book focuses on a more advanced subject, cryptocurrency mining, and we just don’t have room to cover these basics. We recommend you check out Peter’s 8-hour online video course, which you can find at CryptoOfCourse.com; but one way or another, it’s essential that you learn how to work with cryptocurrency safely, in a way that protects you from theft and loss.
Icons Used in This Book
This book, like all For Dummies books, uses icons to highlight certain paragraphs and to alert you to particularly useful information. Here’s a rundown of what those icons mean:
Beyond the Book
In addition to what you’re reading right now, this product also comes with a free access-anywhere Cheat Sheet that covers a variety of useful facts, such as background information on commonly mined cryptocurrencies, coin divisibility, popular pool mining services, and so on. To get this Cheat Sheet, simply go to www.dummies.com and enter Cryptocurrency Mining For Dummies Cheat Sheet in the Search box.
For information on Peter’s Crypto Clear: Blockchain & Cryptocurrency Made Simple video course, visit www.CryptoOfCourse.com.
Where to Go from Here
As are all good reference tools, this book is designed to be read when needed. It’s divided into several parts: cryptocurrency background and basics; mining-related foundational information; how to get started in cryptocurrency mining; the economics of mining; and the Part of Tens. We recommend that you start at the beginning and read through sequentially, but if you just want to know how to find pool mining services, read Chapter 7. If you need to understand how to calculate what equipment you would need to mine a particular cryptocurrency, read Chapter 11. If all you need is to understand the different forms of mining, Chapter 4 is for you.
However, cryptocurrency is a complex subject, and cryptocurrency mining more so. All the topics covered in this book are interrelated. We strongly recommend that you read everything in this book before you begin mining; it’s essential that you have a strong understanding of everything involved before you begin. After all, your money is at stake!
Part 1
Getting Started with Cryptocurrency Mining
IN THIS PART …
Review the basics of cryptocurrency.
Get acquainted with cryptocurrency mining.
Understand