About mining

[LegendzX]

Hi!
Why electricity is expensive when you do mining? And what is advantages and disadvantages in mining?
Thanks.

[Crytptohack]

Energy costs are not higher with mining, people talk about the high costs associated with mining because the hardware is running 24 hours a day, 7 days a week. It is using electricity every second of every day.

When you have a LOT of electronics plugged in, you will use a LOT of energy and will have to pay for that. The monthly bill is quite high for mining farms, but they end up making more in the crypto, like BTC so it is economical/profitable. Especially IF the coin appreciates going forward.

There are other technologies like Proof of Stake and Delegated PoS which do not require the SHA-256 algorithm to be solved.

[HabBear]

And what is advantages and disadvantages in mining?
Thanks.

Advantages (used to be):

• The most efficient way to acquire Bitcoin
• Participating in the activity of the network, when you're mining you are making Bitcoin possible

Disadvantages:

• Increasingly lower return due to the increased difficulty to mine and number of miners in the system; As the network grows it becomes more tough for anyone miner to acquire bitcoin at the same rate
• Endless cost of electricity, which is a driver of low return
• The need to have more machines to maintain the same level of return

Some people are exploring how to use renewable energy to lower their operating costs. There's use of thermal energy in Iceland. And Bitcointalk Member OG Nasty has explored using solar energy (and shared his findings on this forum) to offset the cost of mining.

[dothebeats]

Hi!
Why electricity is expensive when you do mining?

In mining, the hardware that you're using is usually tweaked to get the maximum hashrate with using as little power as possible for it to be efficient and for you to maximize the profit that you'll be getting out of these machines. Also, they should be run 24/7 in order for you to get something significant and if not, you're only mining in vain since you won't be getting anything in return.

And what is advantages and disadvantages in mining?

Advantages:
You'll get money out of certain coins you're mining.
You're helping a particular network in keeping it secure and also helping out process transactions happening within within the said network.
A good investment if you're looking for a passive income.

Disadvantages:
Consumes a lot of power.
Generates a lot of heat.
Could potentially lose you money in the event that something happened in your operation (accidents, misconfiguration of your "workers" etc.)

These could potentially change if most altcoins go for another algo that isn't resource-hungry, though I think that effort would be futile since most investors would carefully choose a coin that's actually backed by something, in bitcoin's case, it is these miners and the power being used altogether.

[LegendzX]

There are other technologies like Proof of Stake and Delegated PoS which do not require the SHA-256 algorithm to be solved.

What is PoS and sha-256 algo?
Thanks.

[LegendzX]

Thanks habBear and dothebeats.

[darkangel11]

There are other technologies like Proof of Stake and Delegated PoS which do not require the SHA-256 algorithm to be solved.

What is PoS and sha-256 algo?
Thanks.

SHA-2 (Secure Hash Algorithm 2) is a set of cryptographic hash functions designed by the United States National Security Agency (NSA).
https://en.wikipedia.org/wiki/SHA-2
It's what BTC is based upon. The thingy that makes it secure

PoS is Proof of Stake. It's a way of obtaining new coins that doesn't involve typical mining. You're using the coins that you have to validate new coins that are being created. In other words your coins kept in a running wallet are working and making more coins for you, you just need a stable connection, a PC and a wallet with coins in it. Money making money.

[LegendzX]

https://en.wikipedia.org/wiki/SHA-2 

The whole content and branches within this interesting and helpful site will take more time to read and excitement for the assurance of learning. Thanks for this informative site darkangel11.