Since it was launched in April 2014, Monero (XMR) has established itself in the highly competitive cryptocurrency world strongly. It’s actually the 10th biggest cryptocurrency at the time of writing this guide, and boasts a market capitalization of more than $3bn. It’s an amazing achievement. Miners and investors have taken to Monero in droves, due to its impressive market performance within a relatively short space of time: Monero rose from $10 in early 2017 to a jaw-dropping $494 at the start of the following year. This brought its investors a return of approximately 4800 percent. Nobody could be disappointed in this outcome.
Tempted to try Monero mining yourself? You’re not the only one. Monero’s ongoing growth has brought this cryptocurrency much more attention than some other cryptos manage. But mining XMR can be daunting for beginners. You might wonder how it all works, what type of software and equipment you need for the best results. Don’t worry. This comprehensive guide to mining Monero answers all of the questions you’re likely to have at the start of your journey to earning a profit. You’ll know how XMR mining works, what benefits it offers, and more by the time you reach the end of this piece. But first, we’ll cover the basics — starting with what Monero is and why so many investors consider it a must.
Understanding XMR Mining
As with Bitcoin, Monero is a form of digital currency you can use for receiving and sending payments online. So, if you owe a friend $200 and they’re happy to accept cryptocurrency in return, you can pay them back with Monero for your mutual convenience.
But why should you actually use Monero in the first place? And how does it differ from Bitcoin?
Monero vs Bitcoin
Let’s imagine one friend (Sara) wants to pay another (Kendra) back for a small loan. Sara decides she wants to keep her transaction private and untraceable, which isn’t easy in this day and age. And she finds Monero to be her strongest option.
If she were to send the money to Kendra via Bitcoin, this payment would be visible to all of the network’s users: everyone would be able to see who sent the funds and who received them. Bitcoin transactions are public and available for anyone using it to view.
While Bitcoin is decentralized, it’s not private. But Monero is designed to be both decentralized and private, offering the best of both worlds. Monero is built to keep every transaction 100 percent untraceable and private — so only Sara and Kendra know the transaction took place. Nobody else using the Monero network would have a reason to be aware of it.
This inherent privacy is one key part of why Monero has become so popular, providing real peace of mind for people who feel uncomfortable with other people knowing how they spend their money.
The Fungibility of Monero
What does fungibility mean? It’s pretty simple: it applies when units of a currency or asset are interchangeable, such as a $20 bill being replaced by another, two $10s, or four $5s. This is why fiat currencies such as EUR and USD can be called fungible.
However, Bitcoin isn’t fungibile because one user could refuse to accept Bitcoins which might have been used for a transaction that was illegal, as they have seen the previous transactions completed on the network. As a result, one Bitcoin unit may not be interchangeable with another unit.
But this is totally different with Monero. No user knows anything about any of the previous transactions that a Monero coin has been used for. They’re all viewed as equal and can be interchanged with each other.
No ASIC is Necessary with Monero Mining
Bitcoin mining typically demands users have access to an ASIC (Application Specific Integrated Circuit). This is a special form of hardware, and can be expensive, costing as much as $1000. Mining Bitcoin is a fairly unappealing prospect for people who might not have the budget or will to pay so much.
Still, XMR mining has no requirement for Monero ASIC mining hardware — you can do it on a standard computer instead, using its CPU/GPU. Such simple accessibility makes Monero a great option for newcomers as well as users who dislike the idea of investing so much before they’ve even started mining.
Diving Deep into Monero Mining
At the time of writing this in-depth guide, there are approximately 16,992,041 Monero in circulation. This will rise and rise until it reaches the 18.4m point. XMR mining is responsible for creating new coins, with miners completing two key tasks:
Let’s return to Sara and Kendra. Sara sends $250 to Kendra through a standard bank transfer. In this case, it’s up to the bank to ensure Sara has an adequate balance to accommodate this transfer. When the bank processes the transaction, it keeps a record for future reference.
If Sara were to send the payment through Monero instead of a bank transfer, who would take charge of validating and recording the transaction? Monero miners would. But why? What’s in it for them? They receive Monero coins whenever they verify a single transaction on the network, rewarding them for the time they spend validating blocks (groups of transactions).
Breaking Down the Monero Reward
At the time of writing, the reward for mining a single Monero transaction block is approximately 4.99 XMR, as well as a transaction fee of 0.06573 XMR. But what will happen to miners’ rewards when the 18.4m coins have been mined at some point in the future?
New coins will be added to the system at a fixed rate of 0.3XMR per minute once the target has been reached. Said new coins will be used to reward miners, acting as a consistent incentive.
With a Monero block being mined every two minutes and the present reward standing at 4.99 XMR per block, that means one XMR is mined every 24 seconds.
How can You Mine Monero Online?
As mentioned above, there’s no need to invest in expensive Monero mining hardware to start mining XMR. All you require is a computer, though the more powerful it is, the better your experience will be. You can mine Monero in a number of ways, but let’s explore Monero mining pools first.
It’s vital that you decide if you’ll mine Monero solo or become part of a mining pool first. A mining pool involves bringing a team of miners together and mixing their respective hardware’s power, creating a stronger chance to verify transactions.
The reward provided for mining will be split between the pool’s participants, and most pools charge a fee too (typically between 0 and 2 percent).
Let’s say you’re responsible for 5 percent of the hardware power contributed to the pool — you’d receive 5 percent of the overall rewards the pool generates. Generally, newcomers are best to avoid mining by themselves: it won’t bring you rewards, unless you’re willing to put a lot of money into mining equipment.
There are plenty of Monero mining pools to choose from. Below, we present some of the top options:
- Fees: 0.6 percent
- Miner count: 10339
- Fees: 1 percent
- Miner count: 32157
- Fees: 2 percent
- Miner count: 2191
- Fees: 1 percent
- Miner count: 30132
Different Monero Mining Methods
The right Monero mining hardware is a critical aspect of mining Monero, as is the proper software to allow you to join a mining pool. You don’t require ASICs to mine Monero — all you need is a GPU or CPU.
But you have to understand two key factors before you start: high hash rate and low electricity consumption.
A high hash rate is basically the hardware’s processing power, and electricity is the biggest expense of mining. So, the less electricity you use, the better.
Here are the three top hardware and Monero mining software types available:
Monero CPU Mining
For Monero CPU mining, you can use your current CPU (Central Processing Unit) for Monero mining or you can invest in a new one — if this sounds like you, go for the Intel Xeon or AMD Opteron.
- AMD Opteron 627
- Price - $50
- Hash rate - 415 H/s
- Xeon L5640
- Price - $150
- Hash rate 130 H/s
When you have the right CPU for your mining, you’ll have to download software for it. You might find XMR-STAK-CPU, which is one of the most well-known software options available. Download it right here.
Are you a Windows user? Try the xmr-stak-cpu-wind64.zip. XMR Stak imposes a development charge of 2 percent, unless you can put the source code together by yourself.
If you have a CPU already, it takes just a few minutes to get your mining up and running. Simply install your Monero mining software, find a mining pool to join, and you’ll be good to go.
Monero GPU Mining
Using a GPU (Graphics Processing Unit) might be a better option for you if you’re serious about mining Monero. There’s a bigger investment required, but provides a better hash rate in return.
A fantastic option for Monero GPU mining is an AMD graphics card. Think about buying an AMD R9 280x or a more recent one, such as the AMD Radeon Rx 580.
- AMR R9 280x
- Price - $140
- Hash rate - 500 H/s
- AMD Radeon Rx 580
- Price: $300 - 400
- Hash rate - 575 H/s
After installing the graphics card, take the same actions you would if you were mining with a CPU. The best mining software when utilizing AMD GPU equipment is XMR-STAK-AMD, and you can find the latest release here.
Once you’ve installed the Monero mining software, you’ll have to change the pool settings so you can become part of the right pool.
Nvidia GPU Mining
Another popular choice for XMR mining is a Nvidia graphics card, though there are a number of models. Your budget will be a big part of your decision. Think about using one of these:
- Nvidia GTX 1070
- Price - $400 - 500
- Hash rate: 505 - H/s
- Nvidia GTX 1080
- Price - $550 - 650
- Hash rate - 600 H/s
When it comes to choosing software, XMR-STAK-NVIDIA may be a viable option, though CCMiner is regarded as a stronger option for mining. The latest CCMiner is available to download here — just be sure to pick the ccminer-x64-2.2.4-cuda9.7z if you’re on Windows OS.
The above list comprises some of the leading options for Monero mining, utilizing a mix of hardware and software from well-known sources. Finally, though, before we wrap this guide up, let’s explore how to set your Monero wallet up.
Setting up Your Monero Wallet
You don’t have a massive selection of Monero wallets to choose from. Hardware wallets are widely available, and are regarded as the safest option. They’re supported by Trezor and Ledger.
Here are two of the most popular Monero options available for you to choose from (you can find them on the official site too):
Monerugo: This mobile wallet is available for Android devices only.
MyMonero: You can make an account at this site quickly and easily.
Cloud Mining Monero
If you want to try mining quickly without needing to invest in hardware and keeping it in good condition, Monero cloud mining could be best for you.
This offers a number of advantages, including no electricity cost increase related to the hardware, and the resulting heat or fan noise. However, it has disadvantages too, including reduced earnings due to the Monero cloud mining provider covering its overheads, as well as a potential risk of being scammed.
You should bear in mind that there’s nothing stopping a cloud mining pool from halting payouts or closing down in the future. The ROI is also less attractive with a starting 3000 H/s hash power (that’s extremely high).
Is Monero Mining Right for You?
Monero mining can lead to impressive profits, but you need to consider the following factors to maximize your chances of good ROI:
- Your hardware’s hash rate
- The amount of power your equipment consumes
- Your hardware’s cost per unit
- The amount a mining pool charges
- The cost of setting your hardware up
You can take advantage of a Monero mining profitability calculator, such as the Mining Calculator at CryptoCompare, to be informed. Your Monero mining profitability is also based on the price of XMR, which can rise and fall quickly. Fast price changes could make a big impact on your potential for ROI.
Still, it’s totally up to you whether you start mining. Bear the factors covered above in mind, and remember: the higher your investment, the higher your reward may well be.