In April 2014, Monero was created as an open-source cryptocurrency focused on scalability, privacy, and decentralization. Monero has a native token called XMR, which works on a proof-of-work mining method. You can easily mine XMR to add cryptocurrency to your wallet. Let's dive into Monero mining.
What is Monero Mining?
Monero mining is a process where you earn XMR by solving cryptographic equations using a high-powered computer. Participants are usually referred to as miners, who receive XMR as compensation for their participation in the Monero mining process. The process is similar to how you would mine Bitcoin, but Monero focuses more on privacy as you verify transactions of Monero’s blockchain.
Why Mine Monero?
Miners play an essential role in maintaining the circulation of Monero, which does not have an upper limit like other cryptocurrencies. For example, Bitcoin has a fixed supply of 21 million coins, but Monero doesn’t. After miners have put the 18.132 million tokens in circulation, the network will generate 0.6 XMR indefinitely starting from May 2022.
Monero aims to keep miners motivated even after completely harvesting the total supply. You can find Monero blocks every two minutes during writing time, while every block contains 1.26 XMR. Monero developers, along with other members of the community, have introduced a particular algorithm called random. This ASIC-resistant PoW algorithm makes it impossible to use specialized hardware and creates a fair mining environment for miners who want to use consumer-grade hardware.
Profitability of Monero Mining Rig
You can think of mining as a business, so you need to consider the profitability of XMR mining before you make an investment and purchase the necessary equipment. You can determine the profitability of XMR mining by using the Monero calculator at CoinWars. Just input pool maintenance fees, electricity costs, and mining hash rate, and the calculator will give you an estimate.
The biggest benefit of mining XMR is its compatibility with consumer hardware, you can easily start with a GPU or CPU. However, the most important factor that you need to consider is Hashrate. Since mining is time-based, you need better processing power for a smooth mining process.
Monero and Bitcoin use the same consensus mechanism but have different hashing algorithms. For example, Bitcoin supports the SHA256 algorithm, and Monero uses RandomX, leading to a difference in supporting hardware.
Requirements to Set Up
First, you need a good GPU to mine Monero; even when it requires more investment than a CPU, it’s still ideal because it has a higher hash rate. There are two manufacturers that you can consider:
- AMD: If you opt for AMD GPUs, your best bet is on AMD R9 280x, which provides a hash power of 500 H/s, or AMD Radeon Rx580, which provides 575 H/s. However, you need to use XMR-STAK-AMD as your mining software.
- Nvidia: If you opt for Nvidia, you can use Nvidia GTX 1070, which provides 505 H/s, or Nvidia GTX 1080, which provides 600 H/s.
Once you’ve decided on the GPU, it’s time to select a wallet that you will use to store your XMR rewards. Three of the best Monero wallets are:
- Exodus Wallet: Exodus has been among the first crypto wallets, and now XMR miners have also started preferring it. While using Exodus, you will remain in control of your private keys through various seed words the system defines during set-up. For enhanced security, you can also configure a physical wallet with Exodus.
- Cake wallet: Monero Cake wallet is a mobile crypto-wallet available on iOS and Android that gives you full access to your private keys through a 13-word seed. It also lets you create multiple wallets from a single account. Cake wallet also uses Face ID as additional security.
- Monerujo Wallet: Monerujo was the first mobile wallet app for Monero for Android. You can easily control your Monero tokens as you get the seed during the first set-up. It also allows users to create multiple wallets for free. It also supports QR codes that let miners avoid typos.
After setting up your wallet, you will head over to minexmr to get the pool address and mining ports.
Step-by-step Guide for Mining Monero on a PC
After you’ve selected your wallet, it’s time to configure your mining rig. Here are the steps you will follow:
Step 1: Install graphic card drivers
Your GPU needs the latest drivers to run efficiently. You can find the drivers for AMD and Nvidia on their official websites. Select your GPU from the drop-down menu, download the latest drives, and install them.
Step 2: Go to XMR-Stak’s official GitHub page
Once your GPU is updated, you will go to the release page and download the latest version. You need to download two files, xmr-stak-rx-win64-1.0.5.zip and source code.zip. After installing, you will launch the miner and configure it like this:
- Choose 0 to determine the hash rate automatically
- Enter Monero as the coin
- Input the pool address from minexmr
- Add your wallet address in the username field
- Leave password empty
- Add TLS/SSL ports (also obtained from minexmr)
- Start mining
You can follow this guide if you want more details on how to set up XMR-Stak.
If you lack the investment to set up the rig, you can opt for cloud mining to rent out bigger and better mining rigs that have higher hash rates. You might have to make a fixed agreement with the cloud miner as the tokens are transferred to the miner’s crypto wallet. Remember that the RandomX algorithm does not support ASIC miners, so confirm the type of hardware they will use before signing an agreement. A cloud mining platform using numerous consumer-grade hardware will be perfect for you.
Monero is an anonymous, decentralized cryptocurrency with no fixed upper limit. Therefore, XMR is one of the best tokens a person can mine. This guide contains everything you need to know to start with Monero Mining.