Cryptocurrency mining is a new topic which is beginning to gain a lot of interest, particularly by individuals who are already aware of Bitcoin mining. If you haven’t heard about bitcoin mining, it may be time to check our earlier articles on the topic and the process of mining it. In this article, we will be concentrating entirely on the topic of rare altcoin mining and how to begin your own journey into mining cryptocurrency. There are many approaches that miners can use to make profits when mining rare altcoins. Also, it is very important to first determine whether or not a specific altcoin is even worth acquiring in the first place via mining or direct purchase from an exchange.
What is altcoin mining?
Before we delve into the strategies you can use to make money while mining altcoins, we want to first of all talk about ways the altcoin mining differs from the regular bitcoin mining. If you don’t know already, altcoin is a collective name given to all the other cryptocurrencies that are not bitcoin. There are hundreds of altcoins that have been developed which currently share the space with bitcoin.
A few examples of the most prominent ones are, Ethereum, Litecoin, Dash, And MinCoin. One especially interesting digital coin is the World’s fastest rare altcoin MinCoin which trades under with the symbol MNC. This currency combines the great features of bitcoin and Litecoin together and which results in an ultra-rare high speed open source altcoin based on blockchain technology. MinCoin was created to capture Bitcoin’s incredible store of value and digital commodity properties. Additionally, it serves as an actual currency for online payment and is in the top 1% of transaction speeds when compared to all of the digital coins out there.
So, what exactly is mining as it relates to digital cryptocurrency? Altcoin mining requires the usage of very high end video cards or in many cases special hardware called ASIC mining equipment which is purpose built to mine a specific cryptocurrency algorithm.
Some altcoin miners will only focus on a specific cryptocurrency and exclusively mine that one coin. Another strategy is to analyze an entire basked of digital tokens and only send your precious mining hash to coins when the conditions are favorable and mining is profitable. When analyzing which coin to mine you will need to take into account many variables such as the current market price of the coin, exchange liquidity, difficulty level of the coin, cost of mining hardware, and your cost of electricity. There are a handful of highly specialized websites which can be used to determine the best altcoins to focus on to make the most profits.
Daytrading & Daymining
You may have heard of the term “day trading”. This is a term used in the financial markets where a trader opens and closes trades many times throughout a single trading day. Daymining is similar to day trading and is a strategy where you can quickly send your mining hash to various coins throughout the day when certain profitability conditions are met. With the use of websites like Coinwarz you can get a general idea of the most lucrative cryptocurrencies to own and when the conditions are perfect you can mine them. The values are estimated based on a combination of the difficulty of mining that particular cryptocurrency and the comparative prices of the cryptocurrencies across the exchanges you have access to.
One important thing to note is that the prices of these altcoins are not stable and they rise and fall based on many factors. An altcoin that is promising to mine today may not be worth looking at an hour from now or the next day, everything is in a state of flux.
When you have chosen a few promising altcoins to daymine and have conducted research to check whether those altcoins are worth you investing or not, the next thing you would do is to head straight to a cloud mining site and start mining. An Example of an excellent mining site is NiceHash. To mine in the platform all you need to do is to merely deposit some bitcoins, select your mining criteria and choose the rig you want to mine. If everything works out in your favor, you will see sufficient return on investment to continue your mining efforts.
The simplest way to keep track your proceeds is to deposit specific number of Bitcoins for leasing rigs, after mining the altcoins and selling them on a bitcoin exchange to check what the total number of Bitcoins would be. With a bit of luck, you’d arrive at a bitcoin amount that is much more than the amount with which you started mining. One exchange that you can use that covers the majorities of altcoins is the Bittrex cryptocurrency exchange. Bittrex has gathered a great reputation and their trading platform is as well great.
Mining at Launch
A second mining strategy you can employ which is more risky is to mine an altcoin as soon as it is launched. This is mostly tried by all or nothing cryptocurrency investors. This is how many of the initial miners of Bitcoin and Litecoin made their fortunes. Many of the early miners who mined Bitcoin in the early days are currently living as millionaires. Why this happened is that when Bitcoin was originally launched, there were only a small amount of miners who mined the coin. Also at that time, it was less difficult to mine and with a home computer you could mine hundreds of bitcoins.
This same scenario has played out as 100’s of new altcoins are launched and cryptocurrency investors decide to mine newly launched altcoins. To discover which new altcoins are being launched you can find current news on the famous Bitcointalk forum under the altcoin news section and evaluate the new digital coin offering. Often times, the launch of a new altcoin are structured against specific future dates. At other times, there are no such pre announcements. In this regard, the developer just announces the launch and goes ahead to start mining immediately.
Making Money With Rare Altcoin Mining
When mining bitcoins, there are factors that are considered to determine if it is worth the effort to mine it like the cost of electricity, availability of funds, and mining hardware. There is much more data to work with when analyzing the profitability of more established coins. However, with newer altcoins there is often much less data to work with and sometimes you are really just making an educated bet on how to move forward.
Having discussed a few strategies, you can use to mine altcoin, in this section, we are going to talk about why it is worth it to mine altcoins. To be able to determine if mining altcoins is a worthy endeavor for you need to consider your individual risk and reward threshold.
If you are a low risk investor, you must be willing and able to conduct research into a lot of available altcoins, track the mining difficulties of each one of them you are interested in compare their prices and day-mine them on a regular basis. For low risk investors, the best mining for them might be to engage in mining of more established altcoins like MinCoin. When you focus on high quality rare altcoins such as Litecoin (LTC) and MinCoin (MNC) this is a great strategy for low risk investors because these coins are already several years old and have minimal risk. Another option to consider is mining a small basket of many different coins. This is great because if you make a wrong choice of altcoin to mine, you’ll end up only losing a very little percentage of your invested funds as the other winners will balance out your losses. In addition to that, when the price of a particular cryptocurrency goes down, you may be able to balance off your loss with a rise in the price of other altcoins.
If you are an aggressive profit oriented altcoin miner or a cryptocurrency investor interested in making quick money it may be right for you to start to mine a brand altcoin at launch. However, before you decide to go with this strategy, you must carry out your research properly and be convinced that the project is worth investing in to avoid regret. You could end up accumulating a coin that may not even make it to a cryptocurrency exchange. If you chose the wrong cryptocurrency, it may end up not gaining traction and could be a worthless coin.