How to Mine Monero
Posted by Frank Gogol in Crypto | Updated on August 11, 2023
Monero is part of the new generation of public blockchains that emphasize privacy. Account balances and transaction data on the Monero blockchain are not publicly viewable. This privacy-first approach has led to a lot of interest in Monero in 2021. If you want to take advantage of this growing interest, read on to learn how to mine Monero.
What Is Monero Mining?
Cryptocurrency mining is the process of doing a mathematical operation called hashing over and over until a correct hash value is found.
A hash is like the ID number for a set of data. Even a tiny change in the data produces a completely different hash. This is one of the keys to crypto mining.
The other key is this: finding a hash is difficult, but checking whether a hash is correct is mathematically easy.
Monero mining uses proof-of-work consensus to verify transactions on the chain. Nodes that participate in this process have a chance of receiving the block reward if they are the first to propose a block.
Monero Mining is quite different from other proof-of-work consensus algorithms. It has been specifically designed so that people using ordinary computers have a chance at gaining rewards. Monero mining rewards are granted in the form of the native coin of the blockchain–XMR.
How XMR Mining Works
Proof-of-work is a way to get many independent computers to agree that something is true. In crypto, the computers must agree on the money in every account and the transfers between accounts.
The best crypto miner is the one that can check the largest number of hashes in the shortest time. However, since the hashing process is pure trial and error, there is a chance that even a low-powered node could stumble upon the correct solution.
Any node that tries to change a transaction that was previously confirmed and added to the blockchain would have to re-hash every block. It would also have to propose the latest block faster than any other node. This gets harder every few minutes as more blocks are added.
Even to rewrite a few blocks of history would require a node to have more computational power than half the network combined. On a large network, it is practically impossible.
On the other hand, it is quick and easy for any node to check that every new block’s hash matches the previous chain hash. This is the basis of the proof-of-work consensus mechanism.
Monero is somewhat unique among proof-of-work blockchains. Its RandomX hashing algorithm is specifically designed to punish nodes with specialized crypto-mining characteristics. As a result, Monero mining does not require specialized high-performance computers to produce reasonable profits.
What Is a Monero Miner?
A Monero Miner is a computer that is running RandomX-based mining software and is connected to the Monero blockchain. In that situation, the computer (node) is participating in the proof-of-work consensus algorithm and has a chance of receiving block rewards.
RandomX is designed to favor CPUs (central processing units) over more powerful GPUs (graphics processing units) and ASICS (application-specific integrated circuits).
Sometimes the term ‘Monero miner’ is used to refer to the RandomX mining software. More commonly it refers to the actual node, or computer, however.
Ways to Mine XMR
There are three different ways to mine Monero. You can choose how to mine Monero based on the method that best suits your budget and technical skill.
Solo Miner
To operate a solo miner you need a computer. The RandomX algorithm makes it much easier for low-powered hardware to participate usefully, so you don’t necessarily need a top-of-the-line computer.
The benefit of mining XMR solo is that you do not have to share the block reward with anyone else if you get it.
Unfortunately, it also means a lot of time may pass before you get a block reward. It is not unheard of for a solo miner to go for months of continuous hashing with no reward.
Monero Mining Pools
Monero mining pools are a way to combine your efforts with other small-scale miners to increase the chances of getting a block reward. By joining a pool you benefit from the combined hash rate of every node that is part of the pool. This increases the chances of getting block rewards consistently.
The downside is that any reward that the pool gets is divided among members according to the percentage of computing power (hash rate) that they contribute. Some pools also charge a joining fee, which may make Monero mining unprofitable.
Monero Cloud Mining
There is also a third possibility for Monero mining. Cloud mining means mining without setting up or using your own hardware. Just like cloud storage and other cloud services, cloud mining relies on remote servers operated by specialists conducting the mining operation on your behalf.
Instead of buying and setting up mining hardware and software, you can pay a cloud mining service to set up and operate a server computer to mine XMR and send it to your wallet.
How to Mine Monero
Figuring out how to mine Monero will depend on whether you choose to do solo mining, pool mining, or cloud mining.
Monero Solo Mining
To mine Monero using your own hardware (solo or pool mining) you can follow these simple steps:
- Set up a Monero crypto wallet
- Download and install RandomX-based hashing software
- Set up mining software (connect wallet, connect to blockchain)
- Begin mining and monitor the miner.
Monero Pool Mining
Monero pool mining requires running special pool mining software instead of standard mining software. The pool you choose will show you how to do this.
- Set up a Monero crypto wallet
- Download and install specialized Monero pool mining software (be very careful of spyware and only download trusted software)
- Set up the mining software (connect it to your wallet, and pool address)
- Begin mining and monitor the miner.
Monero Cloud Mining
To connect to a Monero cloud mining provider and begin remote mining, follow the steps below:
- Set up a Monero crypto wallet
- Choose a cloud mining service
- Set up a cloud mining account
- Begin mining.
A Warning About Spyware
Mining Monero on your computer requires that you download and run compatible mining software. As with any software download from the internet, there are risks of introducing malware onto your computer. One of the most insidious forms of malware is spyware.
Spyware is designed to quietly install itself on your computer. Spyware is used by hackers to steal valuable data from your computer. Hackers can also use spyware to install custom mining software on your computer and secretly use it to mine crypto for themselves.
For these reasons, preventing spyware downloading is extremely important. You can avoid accidentally downloading spyware onto your computer by only downloading trusted software from reputable sources.
Read More
- How to Make Money with Cryptocurrency
- How to Withdraw from Binance
- How to Transfer From Coinbase to Coinbase Pro
- How to Transfer from Coinbase to Binance
- How Does Cryptocurrency Gain Value?
- How to Read Crypto Charts
Final Thoughts
Monero, or XMR, is the native coin of the Monero blockchain. The Monero blockchain emphasizes the privacy of user data. This focus has led to growing interest in XMR in 2021. The know-how to mine Monero solo or as part of a pool is somewhat technical. Alternatively, you can set up an account to earn XMR mining rewards via cloud mining.
