Our world today is in the grip of digital coins and gold, i.e., coins, tokens, cryptocurrencies and many other values generated based on blockchain technology. There are many ways available to all of us to profit and gain wealth through cryptocurrencies. One can mention “Hodling”, “Trading”, “Stacking” cryptocurrencies and various such works.
But there is another way which may be safer and more profitable than all the other ways. Like gold miners, we can mine cryptocurrencies. In this article, from the articles of Seven Star Exchange, we will examine what miner devices are, how to use and earn money from it, its legislation, tips and sidelines about this work. Stay with us.
What is a miner?
In simple language, anyone who extracts cryptocurrency is a miner, and the tools of this process are also called miner devices, but before we answer this question, let’s give a broader answer. First, let’s get acquainted with the way of producing and obtaining digital coins and tokens and finding their value.
The basis and philosophy of this tool is nothing but transparency. All exchanges, transactions and how blocks are produced (which are the same as cryptocurrencies) can be monitored by system users. These two factors make all cryptocurrency-based processes largely immune to fraud, fraud, forgery, and any improper work. This issue causes the use of these cryptocurrencies and supply and demand are formed; There is also a limit on the number of tokens or currency available.
The sum of these conditions causes the cryptocurrency to gain financial value and credit, just like any valuable commodity or object. Issues such as the security of the programming and encryption system, the facilities provided in the blockchain of each cryptocurrency, the speed of transactions, the people supporting the cryptocurrencies, etc. can cause the intrinsic value of these digital assets to decrease or increase.
With these conditions and explanations, it becomes clear that a digital currency or coin is practically the same as gold or oil. The rules of those markets can also be extended to the cryptocurrency market. So connecting to the process by which we earn cryptocurrency will be like owning a mine and we can expect to earn capital in this way; But in a mine where cryptocurrency can be mined, it is open to all users, they just need to have the right tools.
As you know, cryptocurrencies are actually encrypted protocols based on blockchain technology. Every transaction, exchange or any process that is supposed to be processed on the basis of the blockchain, is provided to the system in the form of numbers and digits to produce a “Hash”. These hashes will be input to the system to perform a complex mathematical operation.
Now, we can more fully say that a miner is someone who uses the processor of his desktop computer at the lowest level to a specialized system for mining cryptocurrencies such as ASIC devices at the highest level, by connecting to the desired blockchain network, one of the Node nodes. It becomes a network and, in this way, contributes to the process of finding the correct and valid block.
In fact, in minable digital currencies, the mining network is a decentralized network. This is considered one of the security factors in mining cryptocurrency networks. Because the lack of concentration and expansion of the network causes cyber and hacking attacks and risks to only affect a few nodes, and it is basically impossible to monitor and cover the entire network.
Every second, the miner must produce thousands of hashes and process complex science in order to confirm millions of transactions and compete with tens of thousands of other miners. Depending on the conditions of the blockchain, the miner can share the available hardware power in a “Pool” and increase the chance of getting a reward. Although the profit received decreases in each payment stage, but the number of them increases, which results in a greater reward in total.
Here too, it is not bad to mention the historical evolution of mining and miner devices. All cryptocurrency experiences started with Bitcoin. In the beginning, everyone who worked on Bitcoin was a Bitcoin Miner node. Since there was practically no transaction involved, the volume of input and calculations was low, and the number of people was few, and anyone with a weak computer CPU could mine bitcoins. In this era, each node could earn several bitcoins.
After the famous Bitcoin Pizza Day, the world of cryptocurrencies started to shake. More active people and fans started to exchange Bitcoin and make transactions with it to make it more prosperous. Therefore, the power of the CPU, which works linearly (each operation is performed after another operation), was not enough for mining.
After that, people went to GPU or graphics card. After a short time, other graphics cards were removed. At this time, the cryptocurrency market was booming; Therefore, investing in more powerful hardware was justified. Specialized mining devices or so-called miner devices have entered the field.
Famous currencies such as Bitcoin and Ethereum cannot be mined except with dedicated miners. With the increase of hardware and processing power, optimization of cryptography and coding, and changes in the rules and protocols of blockchain networks, the competition among miners is increasing every day, and mining devices must become more and more powerful.
How to earn from miner?
These days, in every corner of the world, the currencies that can be mined are mined by various people and with various methods. Using powerful GPUs for lesser-known cryptocurrencies and dedicated miner devices for well-known cryptocurrencies are among the best and most common ways to mine cryptocurrencies. Mining is a good way to work in the world of cryptocurrencies, provided that you have an income. There are two main ways to generate income from mining: 1- receiving a reward for each new block that is obtained and 2- receiving a fee.
The first method, which is known, by discovering each new block, the network determines the correctness of the calculations and gives a reward to the miner. This bonus is determined depending on the size of the network and its protocols, and it differs from one currency to another.
But what is the method of receiving fees? As said, the network verifies the authenticity of the work through the proof of work protocol. All miner devices that failed to discover a new block act as a Validator Node and receive a fee for this action; Therefore, it is true that in the heavy competition of mining, the amount of rewards may be low and the speed of receiving them is low, but by continuously being in the network and receiving confirmation fees, you can have a continuous income.
How much is the miner’s income?
What is obtained from the miner’s income is different from one currency to another. It can change daily depending on contracts and protocols. As we said, the higher the hash rate, the more blocks can be discovered or confirmed. But this does not correspond to more income. Because the miner’s electricity consumption is very high, you have to consider its price. The cost of maintenance and cooling of the miner is also involved. The more depreciation your device has, the less your income will be.
In order to have a measure, we consider the income of the Bitcoin miner machine. There are mining machines that earn up to 85 dollars a day. On the other hand, there are mining devices that have negative dollar returns daily. These devices will be removed soon. The reason why such a device is still used is to maintain its position in the ecosystem. These days (that is, when the article was written at the end of August 1401), due to the low price of Bitcoin, many miner devices have been turned off.
Of course, in the meantime, you should pay attention to some points. For example, in large and leading networks like Bitcoin, when the number of miners increases and thus the block production rate increases too much, usually halving events are planned and executed.
In halving, the mining reward is reduced and halved. This is done to control the ecosystem of that cryptocurrency. This removes weak or very heavy miners because it is no longer profitable to work with them. With this, the possibility of vandalism such as a 51% attack is suppressed.
Considering these issues, it should be known that mining will be worthwhile only if you connect several devices and form a miner farm to get a certain total profit. You can also connect to a unified network of nodes – so to speak, a pool – and get a more guaranteed profit by participating in their activity.
Is digital currency mining legal in Iran?
In general, in most countries of the world, a specific law that deals with the mining of digital currency or related matters has not been determined by the legislator. In most cases, general financial and economic laws rule in this regard. In Iran, regarding mining and digital currency issues, none of the activities have been banned or criminalized, but laws regarding mining have been approved. Accordingly, those interested in the field of cryptocurrency mining should apply to the Ministry of Privacy to obtain a license.
However, the legislator is not completely indifferent to cryptocurrency mining. Laws that regulate financial matters, e-commerce guidelines such as fraud and internet fraud, matters related to cyber-crimes, such as hacking and stealing information, all regarding mining matters, buying and selling miner devices must be followed. For example, to accept capital or start a business based on foreign currencies or financial services – both of which are related to digital currencies – you must receive permits from the relevant authorities.
Having said that, you should act consciously, because due to the lack of transparency and clarity of the laws, you may unintentionally break the law and commit a crime without knowing it; The consequences of these issues will be nothing but loss and conflict with the law.
Cryptocurrency mining is one of the most suitable and attractive ways to generate income in the world of cryptocurrencies. We at Seven Star Exchange talked in detail about mining and digital currency in this article. We also found that the costs of electricity and maintenance and depreciation in this process are very high; Therefore, ways such as developing simpler algorithms or pooling the power of devices should be taken .. Although an effort was made to make this article complete, there are many details that need to be followed by people interested in mining.
question and answer
- Is it possible to buy a cryptocurrency miner in Iran?
- Yes, there are legally importing companies.
- What does a cryptocurrency miner do?
- It extracts cryptocurrency or digital currency.
- Are miners profitable?
- Yes, if you choose the right device, you will easily get profit.
- What is the best way to mine cryptocurrency?
- Mining with ISIC devices is the best way to mine cryptocurrencies.
- What are the best cryptocurrency miners?
Devices such as Antminer S19 Pro, Bitramo Romo x, Bitmain Antminer S7 and Avalonminer 1246 are among the best options available in the market.