An Easy Guide to 'Crypto-Mining' the Market for What's Come to be Called 'Altcoins'
Had you bought one bitcoin for $100 in the summer of 2013, your investment would be now worth more than $8,000 (as of this writing). In a typical investment, a 5 percent to 10 percent annual return is considered great, but in the wild world of cryptocurrency, it's not a whole lot.
That's what's making the cryptocurrency market "wild" and the object of intense interest among investors.
First, a little background: What may have started as a focus on Bitcoin as a currency has evolved into a market of diverse coins (called “altcoins”) that are all trying to change the world and the concept of value in their own unique ways.
In fact, “altcoins” currently make up nearly two-thirds of the market’s value. Ethereum and Ripple are some of the most popular. And this surge in interest has caught the attention of many entrepreneurs, who liken the introduction of the underlying technology of blockchain to that of the internet in the 1990s. The belief that many centralized systems will transition to decentralized protocols has helped fuel a vibrant community of crypto-enthusiasts, who have helped propel many of these new blockchain startups to prominence -- without reliance on VC funding.
Still, even given all this attention, it’s important to note that crypto and blockchain companies are still in their infancy. Just buying cryptocurrency today is not an easy experience. Most exchanges are unregulated, hard to navigate and come with high transaction fees.
To make matters worse, many are no longer accepting new customers, as demand has surged beyond their capacity. What's useful to know here is that these limitations have opened the door for entrepreneurs to find ways to bridge the gap between the average consumer and cryptocurrency.
This brings us to crypto-mining, a process that dedicates computing power to solving the complex math problems required to manage the accuracy of records on the blockchain.
In exchange for managing the blockchain, people who "crypto-mine" (“miners,” for short) are rewarded for their efforts with coins. Traditionally, mining has been a process reserved for the technically adept; but now, new companies are recognizing this demand for exposure to altcoins, and they're pushing to remove the barrier to entry so anyone can participate.
Argo is one of these companies. Founded in 2017, Argo aimed, and aims, to make crypto-mining accessible to anyone. By taking an intuitive, and simple approach to the user’s experience, the founding team members believe they can make acquiring cryptocurrency much more approachable and take crypto-mining mainstream.
By offering a network of ready-to-mine computer networks, Argo allows everyday people to mine and directly receive altcoins for their efforts. “There’s an imbalance between the demand to own cryptocurrencies and the ability to easily acquire them," Jonathan Bixby, CEO of Argo Mining pointed out to me in an interview. "Mining solves this, but only for a select group of people that have the technical background required to build rigs capable of earning coins.
"We’re taking our success building consumer products and our state-of-the-art mining locations and combining them into an easy-to-use platform open to everyone.”
As the prices of altcoins move up and down, investors can also shift the coins that they choose to mine and monitor how much of each altcoin they've mined. Interested? Want to learn the lingo? Here are some of the common terms used:
- Cryptocurrency wallet: allows you to send and receive altcoins, and monitor your balance
- Mining pool: a community of miners who work together to increase the efficiency of mining
- Online currency exchange: exchanges altcoins for other altcoins or fiat currency
Fortunately, mining altcoins requires limited decision-making. The set-up generally includes choosing:
- an altcoin to mine (different mines offer different altcoins)
- a package to subscribe to (stronger packages result in faster mining)
- the destination to which you want your mined coins sent (a variety of online and offline wallets exist)
Once mining has been initiated, you can track your progress and view your holdings over time. The coins are sent to your wallet on predetermined dates or time intervals, and after each release, they are all in your possession.
All of the technical aspects are undertaken by the mining companies that generally have considerable experience mining coins. There are, however, decisions miners should consider when choosing a mining company to work with. These include:
- the rate charged for mining coins
- the selection of altcoins to mine
- the time commitment for each contract