I Know About Bitcoin Mining, is Crypto Mining the Same Thing?

Is Bitcoin mining the same as crypto mining?

Not quite. There are subtle differences which we explore below.

Bitcoin mining is the process of making/earning Bitcoins (BTC) only, whereas crypto mining is the process of earning different cryptocurrencies through mining operations. The two terms are sometimes used interchangeably, but crypto mining embraces mining operations for 5,000+ other cryptocurrencies (including Bitcoin). 

What does crypto mining involve?

Crypto mining as a process involves the validation of a transaction through cryptography.

Cryptocurrencies (including Bitcoin) use publicly accessible ledgers to store and record financial transactions. Every transaction is linked (in a chain) to all the previous and following transactions, records are time-stamped in what is called a “blockchain”. You can find more about this here: https://www.crypto-mining.co.uk/faqs/what-is-blockchain-bitcoin-cryptocurrency

Every transaction is validated through cryptography to eliminate fraudulent transactions. Validation is achieved by solving complex mathematical challenges which require significant computer processing to solve, yet can be verified easily.

Crypto miners compete to solve the challenges, the successful miner posts the ledger transaction and receive a reward in the form of a cryptocurrency.

Bitcoin mining: barriers to entry

Anyone is eligible to become a crypto miner, but there are barriers to entry which include hardware, energy consumption and time commitments.

This is one of the main drawbacks of Bitcoin mining as it requires a great deal of energy consumption and the dedicated hardware needed (ASIC miners) tends to be very expensive. This is why many people choose to pursue other forms of crypto mining instead.

It cannot be underestimated how much processing power is needed to crypto mine effectively. This is why buying a mining rig is a critical decision, it will be a major factor in whether crypto mining proves to be a profitable success or not. We always advise “would-be investors” to speak to a company like us about the technology available.

We only sell top-quality GPU mining computers (as opposed to ASIC miners), which will give any new crypto-miner a great start. They are also ideal for experienced miners looking to improve their mining operations technology.

Energy consumption is another barrier. Costs of energy can be extremely high and require cryptocurrency rewards to achieve an ROI. Investing in the optimum mining rig will ensure that energy consumption is kept to a minimum whilst achieving the processing power required.

Is cryptocurrency the right term?

Sometimes but not always. Perhaps “cryptoplatform” would be a better name than cryptocurrency for most. There are 5,000+ cryptocurrencies they are not all the same and have different purposes and applications.

The “cryptocurrency” name became adopted because of the success of Bitcoin following the financial crash of 2008. Bitcoin is a digital/virtual currency, which can be considered an online version of cash. Bitcoin can be used to buy services and products; a growing number of retailers are beginning to accept Bitcoins as a means of payment. So, “cryptocurrency” is a valid name for Bitcoin.

Ethereum uses blockchain technology for smart contracts, which is like a virtual handshake over the internet

Only a small number of the “so-called” cryptocurrencies are actually aiming to be a virtual currency.

Unlike Bitcoin, other “cryptoplatforms” have a different purpose or raison d’etre. To give two examples:

• Ethereum – the second largest cryptocurrency, is renowned for its smart contract technology. This enables contracts to be executed immediately via the blockchain without the need for human processing and verification
• Ravencoin – this is a well-known and highly-regarded asset transfer platform. Any real-world asset (e.g., property or securities) or digital asset (e.g., website or images collection) can be transferred through the blockchain without the need for human intervention

Get in touch

For more information on crypto mining and the various rigs and solutions we provide, please feel free to get in touch. We are here to help.

Image Credits: Peggy Marco and Geralt