Cryptocurrency Mining For Dummies, 2nd Edition

Untangle the steps to mine crypto, including new coins and services

The cryptocurrency market moves quickly and miners and investors need the latest information to stay ahead of the game. This edition of Cryptocurrency Mining For Dummies has the insight you need to get started with mining. You''ll learn what goes into building a mining rig that can complete cryptocurrency transactions and reap the rewards in the form of new coin. You also discover how to join existing mining programs. Whatever your crypto goals, Dummies will make it easy for you to understand, engage in, and invest in mining. You''ll even get an up-to-date primer on the evolving legal situation and an idea of what to expect in the future of crypto.

• Understand the basics of mining cryptocurrency and get started with your own mining operation
• Explore the latest cryptocurrencies and mining services so you can mine your own or invest wisely
• Get involved in crypto mining with the hardware you already have, or build a new, powerful mining machine
• Become an expert on the latest mining trends so you can identify new ways to profit in the crypto space

With this book, you''ve got insider advice on choosing which cryptos to mine, riding out market fluctuations, creating pool accounts, and more. There''s no time like the present to get started with crypto mining.

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 2

Beyond the Book 3

Where to Go from Here 3

Part 1: Getting Started with Cryptocurrency Mining 5

Chapter 1: Cryptocurrency Explained 7

A Short History of Digital Dollars 8

First, take the Internet 8

Add credit card confusion 8

Add a dash of David Chaum 9

Result? DigiCash, E-Gold, Millicent, CyberCash, and More 10

The Bitcoin white paper 10

Bitcoin: The first blockchain app 11

Who (or what) is Satoshi Nakamoto? 12

What’s the Blockchain? 13

Blockchain around the world — the blockchain network 13

Hashing: “Fingerprinting” blocks 14

Blockchain is “immutable” 15

Where’s the Money? 16

What’s the Crypto in Cryptocurrency? 18

Public Key Encryption Magic 20

Messages to the blockchain 21

Signing messages with the private key 22

The blockchain address — your money’s home 22

Sending a transaction message 23

Unraveling the message 24

The Basic Components of Cryptocurrency 25

What’s in a wallet? 25

Private keys create public keys 26

Public keys create blockchain addresses 26

The private key controls the address 26

Where Does Crypto Come From? The Crypto Mines (Sometimes) 27

Chapter 2: Understanding Cryptocurrency Mining 29

Understanding Decentralized Currencies 30

Exploring the Role of the Crypto Miner 31

Making Cryptocurrency Trustworthy 32

Reaching Agreement through Consensus Algorithms 34

Looking at the Cryptocurrency Miner 35

Making the Crypto World Go ‘Round 37

Chapter 3: Building Blocks: The Transaction’s Journey to the Blockchain 39

The Cryptocurrency Network 40

Submitting Transactions 44

Looking at transaction fees 44

Change address 46

Verifying the transaction 47

Competing for Bitcoin, the ten-minute contest 48

Winning the Bitcoin 50

Chapter 4: Exploring the Different Forms of Mining 53

Proof-of-Work Algorithms 53

Proof-of-work applications 55

Proof-of-work examples 56

Upsides 58

Downsides 59

Proof-of-Stake Algorithms 60

Proof of stake explained 60

Proof-of-stake selections 62

PoS example cryptocurrencies 63

Upsides 64

Do