To mine coins we got the following options to mine with:
CPU Mining: This is the easiest way probably to try mining for coins as a first run. The requirements here are pretty basic: You need a CPU. Luckily every computer got that. And you need a program called cpuminer. Cpuminer is also known as “minerd”. Sign up to join a mining pool and you are ready to go. Advantages of mining with your CPU are pretty obvious: almost no requirements, no additional hardware besides your CPU. Disadvantage is the performance of you CPU: it is pretty slow compared to the other methods. Your energy costs will eat up all of your profits.
GPU Mining: Mining with your GPU is already a much more efficient way to mine coins and was the next step after CPU mining. Compared to your CPU the GPU is able to solve the hash values much more efficient; you get way more out of your energy bills. To mine with your GPU you need a modest graphics card which is supported by the GPU miners like cgminer. Most modern Radeon or Nvidia cards are supported. Requirements compared to CPU mining are only the additional graphics card you need – or even better several of them – and mining makes much more fun.
ASIC: ASIC hardware are specialized devices produced for only one task: To mine coins. But this in the most efficient way: This gives you the best hash rate/power consummation ratio of all of the three methods mentioned. However, you have to have access to such a device so there is an additional cost.
To jump directly into mining and gain my first experiences, I have chosen for the first option, the CPU mining way.
So, these are the steps we will follow:
- Download cpuminer for your OS
- Join a mining pool
- Run cpuminer with appropriate parameters for your pool
- Watch the numbers and have it run for a while
That’s it really. So lets have a look at this in detail:
Depending on your operating system, you have to download cpuminer (minerd) from this site or you use the OS internal packing system (like apt or yum). If you have to download it, make sure to pick the right architecture (eg x86 or x86_64), download the archive and extract it to a directory of your choice.
To install with a Debian based system like Ubuntu you simply run “sudo apt-get update” and “sudo apt-get install cpuminer” and the system does the magic.
Join a mining pool
There are several mining pools out there, all with different rules like fee’s and payout models.
I tried my luck with a Litecoin pool and picked minersdream.com: most green boxes and no block fees. So browse to your chosen pool’s website and register your account. When done you have to add a “worker”. You need a worker for each of your device you will have to support your mining activity. As we just give it a try with our cpuminer, you need to add only one for the time being. Remember the name and the password of your worker, we need it in a second.
When you got your worker, we will start our miner soon. Depending on your OS, open up a terminal or command prompt and type in the following command:
minerd –url=stratum+tcp://stratum-eu.minersdream.com:3333 –userpass=USERNAME.WORKER:PASSWORD
(Please make sure to redirect to the correct path for your minerd binary. Replace USERNAME, WORKER and PASSWORD with you own values)
When you typed in everyt correctly, you should get an output like this:
Perfect, our first test is running successful; our CPU miner is mining.
Tip to have minerd running in the background
To have cpuminer running in the background while you are working, you can decrease the priority of it. In Windows you start up the task manager, tab “Processes” and then right-click on minerd and select priority “lowest”. (Not having windows, hope this all correct…)
In Linux you run the command like this:
nice -n 19 minerd –url=stratum+tcp://stratum-eu.minersdream.com:3333 –userpass=USERNAME.WORKER:PASSWORD
This sets the minerd task to the lowest priority and have it running in the background.
Before we start to collect or even mine coins, we have to get a wallet to keep our money safe and be able to receive even money.
You got two options to store your coins:
- you keep it local, either on your computer or your smartphone
- or you use an online wallet
This is simply an application which is connected to the (bit-)coin network and runs on your computer or smartphone. Everything locally on your device. Privacy is a big advantage of this option, as you have to trust no one else except yourself. Disadvantage on the other side if you loose your wallet file (for example you delete it by accident) or your phone got stolen, you also lost all your coins.
With this option you sign up for an account at a provider to keep your money safe, meaning you trust a third party. Hugh advantage is you can not loose your wallet file. You got other risk as wit every other online account.
Whether you decide to go for a local or online wallet is up to you. I myself prefer to have everything controled, hence I decided to have my wallet local.
Download and install the wallet
Let’s go to the practical part and download a wallet. Or even two, as I like to play around with Bitcoins and also Litecoins. For Bitcoin I selected “Multibit”, which is a cross platform application written in Java, and for Litecoins the “Litecoin QT” application. You can download both apps from below links:
To install your wallet, you have to basically follow these steps:
- Download the wallet client
- extract the archive into a directory of your choice
- start the application
- wait for finished synchronization with the network
Once the wallet app started, it needs to synchronize with the network. This can take quite some time, depending on your connection, as it downloads all of the transactions happened so far on the entire network.
In the meantime, we can checkout your wallet address. See below screenshots for Multibit and for Litecoin QT to see where to find it:
Whenever someone likes to send you coins, this is the information they need. To collect your first coins, try the “Coins for free” site to collect the first coins and see them arriving in your wallet.
Digging into a new topic is always a challenge. Where should I start? Where is the important information? What level of knowledge do I need or like to have before I start?
- Bitcoin is a digital currency which is worth real money
- You can generate coins with your computer (Yes, money out of the air…. ehm, no)
- you either mine solo or in a pool (recommended)
- you store your coins in a electronically wallet which you should not loose, same as cash
- each wallet got a unique identifier used to receive money
- money is also sent via the wallet
More to come. As we got now the basics we will start our first experiment with CPU mining and try to get some coins…
Today I decided to share all of my findings in the world of the digital or crypto currencies. Having been interested in the topic for a while, I decided finally to dig into it. I will build and structure the site while discovering new things in the world of Bitcoins, Litecoins and all other coins. Pretty interesting topic, hope you enjoy reading about it. Feedback and comments are always welcome and appreciated.