What You Need to Know to Begin Mining Monero. Cryptocurrency mining has grown highly professionalized, particularly after the difficulty of Bitcoin mining doubled between 2020 and 2022. However, while Bitcoin is the largest and most well-known cryptocurrency, others have yet to gain global traction.
One of them is Monero (XMR). It is similar to Bitcoin in many methods, yet it differs in important areas that make it unique. More importantly, they make it mining-worthy.
So, how exactly do you mine Monero?
What Is Monero (XMR)?
Simply put, Monero (XMR) is a cryptocurrency focused on privacy. However, on the surface, Monero and Bitcoin are similar in two ways:
- To protect the network, they employ Proof-of-Work consensus techniques. In other words, they use physically-based processes to verify and execute blockchain transactions for network operators. This physical foundation takes the form of electricity, which is required to solve cryptographic puzzles. On the other hand, proof-of-Stake consensus methods use economically based mechanisms to achieve the same result. As a result, blockchain networks such as Cardano, Solana, and Avalanche employ validators rather than miners.
- Monero has a total coin supply cap of 18.4 million XMR, whereas Bitcoin has 21 million BTC. Unlike the USD, which loses value over time as the Federal Reserve raises its supply, this renders both cryptocurrencies deflationary.
Despite their similarities, they are very distinct. When we zoom in, we can see that Monero differs from Bitcoin in several ways.
Monero (XMR) Supply Cap—Tail Emission Makes All the Difference
Bitcoin has a fixed number of coins that can exist at any given time—21 million BTC. This leaves less than 2.1 million BTC, or less than 10%, to be mined in the next 120 years. Many BTC coins, however, are always lost or destroyed because people have lost credentials to unlock them in the form of personal keys or have destroyed the storage device on which they were stored. In addition, they are kept in non-custodial crypto wallets, which is why keeping your recovery phase safe is critical.
Monero, on the other hand, accounts for the fact that some XMR coins would be lost in the same way. This is because it has a technique that Bitcoin does not have: tail emission. While Monero will reach its supply cap of 18.4 million sometime around May 2022, its tail emission ensures that Monero miners will continue to receive rewards.
To put it another way, Monero miners may count on block rewards exceeding 0.6 XMR each block. In the original concept, bitcoin miners will count on transaction fees instead of block rewards.
This rewarded approach, however, has yet to be tested (with Bitcoin). As a result, Monero’s developers decided that there would always be a block reward via tail emission. The question now is whether this makes Monero as deflationary as Bitcoin.
Yes, the answer is yes. When one considers lost XMR and the increase in users over time, these forces cancel out the negligibly inflationary tail emission. Furthermore, unlike the USD or other fiat currencies, Monero’s inflation is known ahead of time. Finally, tail emission encourages Monero owners to use it as a medium of exchange rather than just a store of value.
Monero’s Key Feature—Privacy
Although Bitcoin is referred to as a cryptocurrency, the crypto component could be much better. Although crypto implies encryption to protect privacy, Bitcoin is pseudonymous. This means that its transactions are easily linked to a person’s identity. Coinbase has created a suite of tools to accomplish this and has shared it with several federal agencies.
Although a Bitcoin address does not reveal your personal information, you do if you buy BTC on a cryptocurrency exchange using your bank account. Similarly, you reveal it when you sell BTC on a cryptocurrency exchange and deposit the proceeds into your bank account. In other words, the Bitcoin blockchain is transparent because it displays both output and input transactions associated with an address.
While there are ways to get around the need for more privacy, they are complicated and questionable. Monero, on the other hand, is not traceable by default due to its ring signature function. As intended, it is a cryptocurrency in the literal sense of the term. The Internal Revenue Service (IRS) has set a $625,000 bounty on Monero and other privacy coins for cracking their code.
In this sense, Monero is the digital counterpart of cash: anonymous and untraceable. This provides it an advantage over non-privacy coins like Bitcoin in the future. However, one disadvantage to using Monero as a digital currency is transaction speed. While the Lightning Network makes Bitcoin payments almost instantaneously, XMR transfers can take up to 30 minutes.
Monero Mining Requirements and Profitability
Now that you understand the propositional worth of Monero, it’s time to learn how to become a Monero miner. Fortunately, unlike Bitcoin, which requires specific and expensive ASIC hardware to evolve a cost-effective miner, Monero does not.
Monero mining, on the other hand, may make use of both your computer’s CPU and GPU, whether it’s a laptop or a desktop PC. Of course, the greater the power of both components, the greater the block rewards. The H/s metric—hash per second—estimates your computer’s mining potential.
Similarly, 1 KH/s equals 1000 H/s since 1 Kilo equals 1000. This ranges from Kilo (K) to Mega (M) to Giga (G) and Tera (T) as the greatest conceivable hash power metric (and who knows, we’ll see Petahashes in the future!). When writing, the total number of machines connected to the Monero blockchain network accounts for 2.9 GH/s of mining power.
The Monero mining calculator actually predicts the following results on a scale ranging from low to high PC configuration.
Mining Monero With Low-End Hardware
On the low end, the AMD Ryzen 5 Pro 4650G has approximately 4170 H/s. This CPU with an integrated GPU has an MSRP (manufacturer’s suggested retail price) of roughly $260. Then, if we count the CPU wattage at 65W, we get a daily income loss of $0.05.
This loss can only be turned into a profit if your electricity bill is less than $0.1 per kWh. So in that example, the mining gain with that CPU would be $0.01172 per day. Isn’t it much?
Mining Monero With Mid- to High-End Hardware
Let’s now consider a more form enable PC configuration.
The AMD Ryzen7 5800X is a mid-range processor with an MSRP of $450. Because it lacks an integrated GPU, this must be considered. The CPU has a mining speed of 9110 H/s and a power draw of 105W. Similarly, a discrete GPU, the GTX 1080 Ti, will have a mining power of around 1000 H/s while drawing only 200W.
As a result, mining losses have increased to $0.4 per day! The RTX 2080 Ti would make little difference, providing only 500 more H/s to the Monero mining table. This leads us to the following conclusion:
- Even the most powerful GPUs can only provide roughly 10% of the hash power required for Monero mining compared to a CPU.Regardless of the hardware, solo mining is not profitable.
The question then asks itself, is Monero mining worth it?
Joining Monero Mining Pools
As you can see, mining Monero is dependent on the following:
- The price of electricity
- The hash power of your machine, with CPU being far more essential than GPU.
- Your computer’s power consumption
Of course, if you buy a machine solely for Monero mining, you must also account for it. Otherwise, if you already have a PC prepared to go, the best way to begin is to join one of Monero’s mining pools:
- MineXMR.com has 12,892 active miners and a pool hash rate of 1.04 GH/s. 1% pool fee
- SupportXMR.com has 8570 active miners with a total hash rate of 450 MH/s. 0.6% pool fee
xmr.nanopool.org has 4,042 active miners with a total of 566 MH/s. 1% pool fee
To obtain block rewards, mining pools combine the processing power of individual miners. In other words, this form of help networking increases the chance of successful mining. While the pool receives the XMR payout, miners accept it proportionally to the hash power they contributed to the pool.
However, whether this will be profitable in the long run is still being determined. It all relies on your hardware and the price of XMR. However, profitability will increase if it does. All you have to do is give it a shot.
Steps to Start Mining Monero
Two criteria are required for mining Monero in addition to hardware:
- The Monero wallet. Monero GUI Wallet or MyMonero are the two options. Both are appropriate for novice and advanced users and may be installed on all major operating systems, including Windows, Linux, and macOS.
- Mining software that connects your computer to the blockchain network of Monero. XMR-Stak or XMRig would be sufficient.
With both in hand, you can easily enter any Monero mining pool by pasting your Monero wallet address and begin getting your block rewards as XMR. The mined XMR can then be sent to your crypto business account (Binance, Coinbase, Kraken, etc.) to be sold for fiat currency or swapped for another cryptocurrency.
Should You Mine Monero?
Finally, if you already have a PC, it is worth investigating whether the mining venture will be profitable. When you read this, the XMR price may have risen, making even solo mining profitable. However, with the current XMR price of $211, it is likely that you have extremely cheap electricity. In that situation, joining a Monero mining pool and contributing to a collaborative effort is your best bet.