Cryptocurrencies, photovoltaics, solar energy – these terms appear more and more often. Once unthinkable, today photovoltaic installations are increasingly mentioned as an excellent source of electricity for mining cryptocurrencies. Bitcoins, Dogecoins, Ethereum – the value of these cryptocurrencies is growing for a long time. There are no signs that this will change soon. Convince yourself that free solar energy can be a great choice for cryptocurrency mining.
What are cryptocurrencies?
Virtual currency – this is the term you will most often meet in the case of cryptocurrencies. The cryptocurrency does not have its physical form and is only a digital record on a computer disk or in the cloud. You can use it to pay for selected goods and services, if the seller accepts such payment. Therefore, cryptocurrencies have their value, which can be called virtual money. Today, you can pay with cryptocurrencies in many shops, hotels and restaurants. The number of points accepting virtual money is growing every year.
How do cryptocurrencies work?
Many currently known cryptocurrencies operate on a similar principle. They use a decentralized system, in most cases based on blockchain.. Blockchain is a public register of transactions performed with a given cryptocurrency. It is operated and updated by many people, and to be exact – many computers. The way blockchain works can be compared in a way to P2P networks and torrents.
In the case of cryptocurrencies, the calculations performed in the network receive a reward in the form of a certain amount of a given cryptocurrency. It is this activity that is commonly known as mining of cryptocurrencies. In turn, people involved in mining cryptocurrencies are called miners.
It is worth adding that cryptocurrencies to verify transactions use cryptography technology. It means that complex mathematical calculations are aimed at encrypting information.
How to get cryptocurrencies?
The easiest way to get a cryptocurrency like Bitcoin or Dogecoin is to buy it. Cryptocurrencies can be purchased on one of the many cryptocurrency exchanges. One of the most popular cryptocurrency exchanges is Binance. After purchasing a given cryptocurrency, it can be stored in a virtual wallet on the stock exchange or transferred to your own wallet. A wallet can then be stored on your disk or in the cloud. Buying cryptocurrencies on the exchange is not the only way to get digital coins – you can also mine them.
Cryptocurrency mining – how is it done?
Mining cryptocurrency is actually a mathematical operation performed by a computer. Depending on the cryptocurrency, complicated mathematical calculations are performed based on the CPU or GPU. Properly configured cryptocurrency mining software makes the computer work alone. Then, the extracted cryptocurrencies are then transferred to the appropriate wallets.
Millions of operating cryptocurrency miners verify all transactions in the network. They verify them using great computing power. In return, users are rewarded with new coins or tokens. It is worth knowing that mining bitcoins or other cryptocurrencies makes the process use a lot of electricity. Much more than in normal computer operation. For this reason, additional cooling is often necessary. In some cases, the thermal energy produced by excavators can even be used to heat a building.
Profitability of mining cryptocurrencies
The profitability of mining a given cryptocurrency depends on its price on the exchange market and the cost of electricity. Installing solar panels can significantly reduce the cost of your electricity bill. Moreover, it is worth bearing in mind the changing prices of cryptocurrencies. Just like on the traditional stock exchange, prices on the cryptocurrency exchange are also changing. Bitcoin, Dogecoin and Ethereum have been increasing their value from the beginning of their existence. When mining currencies, consider choosing those that are not yet popular. Remember that in a few years their value may increase significantly. As was the case with Bitcoin and Dogecoin.
After purchasing photovoltaic panels, the cost of mining cryptocurrencies becomes practically zero. You should pay attention to the selection of the appropriate power of the panels. So that they fully meet the needs of computers for mining cryptocurrencies. There are special calculators available in the network that allow you to choose the right PV power to suit your individual needs.
You decide for yourself whether you choose an on-grid or off-grid photovoltaic installation. In the case of off-grid, you will become independent from the power grid operator by equipping your installation with an appropriate battery. In the case of on-grid, you transfer the energy to the general grid and then take it back.
Is it profitable to mine cryptocurrencies?
The growing popularity of cryptocurrencies allows us to assume that the profitability of their mining may be increasing every year. It is worth observing the information appearing in the media that will allow you to choose the right cryptocurrency for mining. Dogecoin has recently been much more popular than Bitcoin. It is much easier to mine today than Bitcoin. If you decide to become a cryptocurrency miner, consider mining tokens and coins that are not yet very popular and may be in a few years.
However, if mining cryptocurrencies is too time-consuming for you, consider setting up an account on one of the cryptocurrency exchanges, e.g. Binance. Then you will be able to purchase virtual coins straight away.