Anyone who invests in cryptocurrencies and has knowledge on the subject must have already wondered how to Mine Cardano. After all, it has gained prominence among crypto assets.
It even surpassed Bitcoin as the top seller on the eToro trading platform during Q2 2021. The increase was 51% compared to the previous quarter.
Cardano (ADA) also showed remarkable resilience during the cryptocurrency crash in May, hitting an all-time high of $2.46. And the prospects for the future are positive.
But what exactly is Cardano (ADA)? How does it work? How is this cryptocurrency mining? What are the advantages and disadvantages?
Check out the answers to these other questions below!
What is Cardano?
Basically, one can explain Cardano as a blockchain-based cryptocurrency network. In other words, it is an open-source blockchain project.
In fact, it is the only project that follows a scientific approach. It is jointly authored by the Cardano Foundation, IOHK, and Emurgo.
The code is built in layers to run financial applications used by businesses, consumers, and governments around the world.
What do you mean, layers? It has two separate blockchains for token processing and smart contracts.
This allows the team of programmers and engineers to keep the cryptocurrency up to date through the soft forks network.
In addition, Cardano can be used to send and receive digital currencies, and perform fast, encrypted P2P transfers securely.
How does Cardano work and how is it different from other cryptos?
Cardano is used to handling high transaction rates as well as low transactions per second (TPS). So it works a little differently than other blockchains.
Digital currency planning is distinguished by its level of organization and scientific methods used in its construction.
The aim is to provide a decentralized, low-cost system and a high TPS Proof of Stake (PoS) Network. This is done in three ways:
ADA Proof of Stake consensus protocol;
through its second layer of infinite scalability — Hydra;
Hard Fork Combinator, which limits network interruption in case of the hard fork.
A striking difference between Cardano and Bitcoin is the very fact that the former coin works by the Proof of Stake consensus. While BTC uses Proof of Work.
Three Cardano-type cryptocurrencies in front of a lit computer screen
Mining Cardano could be a promising activity in 2021
What is mining?
Mining cryptocurrencies is the process of transactions between users that are verified and recorded on the blockchain. Through these transactions, it is possible to introduce new currencies, according to the protocol established by each crypto asset.
The mining activity requires dedication, patience, knowledge about the entire process, and some nomenclature. Only in this way is it possible to do it safely and effectively.
In March 2021 alone, digital currency miners raised $1.5 billion, according to The Block Research.
It has nothing to do with mines and excavations. It is a completely digital activity.
Is it possible to mine Cardano?
Not really. But calm down that it is possible to have profitability with it!
It turns out that, for this project, the term mining would not be the most appropriate to use. As it uses the Proof of Stake protocol, as already mentioned, the units of ADA tokens cannot be mined.
You must buy a stake to win, as you validate transactions. The advantage is that you save a lot of money on equipment, energy, and cooling.
The maximum supply of Cardano Coins (ADA) in circulation is 45 billion. Currently, it is estimated that about 31 billion circulate.
Why is ‘mining Cardano’ cheaper than mining Bitcoin?
Precisely because of this Proof of Stake Protocol. As already mentioned, the miner saves money that would otherwise be invested in equipment like ASICS or GPUs, which are not needed.
It also saves energy and cooling costs, which is necessary when using the mentioned equipment. Contrary to what happens with bitcoin mining, for example.
Step by step How to Mine Cardona
How to Mine Cardano (ADA) on PC or Laptop at Home
Create a wallet on Yoroi, download the miner from UnMinable, configure and run it. That’s how you start mining ETH which will be saved as ADA in your wallet. Sounds fair? Let’s dig deeper into the subject now.
Create a Wallet on Yoroi
Yoroi is one of the fastest and most secure crypto wallets in the world. The Cardano foundation officially recommends it along with the Daedalus. However, YOROI is more lightweight than Daedalus. Creating a Yoroi wallet is quick.
This is how you do it:
1. Go to yoroi-wallet.com and click on the ‘Download’ button
2. Choose the download version according to your OS. I have used the Chrome version.
3. ‘Add to Chrome’ if you want to use the wallet on Google Chrome like me.
4. Confirm on ‘Add extension’ you’re ready.
5. Click on the Yoroi logo from the extension’s bar on Google Chrome.
CONTINUE READING BELOW
6. Go for the ‘Simple’ wallet now.
7. Skip the next option or allow to enable Cardano payment URLs.
8. Connect your hardware wallet, create a new one, or restore the old one.
9. Choose the ‘Cardano ADA’ and ‘create wallet’ now.
7. Enter your wallet information, set your ‘recovery phrase.’
But don’t forget it after setting it up because you may need it for secure transactions.
And boom! You’ve created a new wallet on Yoroi. Now is the time for you to connect your hardware to a mining pool. Let’s do it right away. Go to ‘Receive’ to get your wallet’s address.
Download the Miner
Here’s how you download the miner. I have selected unMinable for this case study.
1. Go to Github and download NBMiner to mine ADA
2. Extract the zipped file
Now you must configure the miner to start mining Cardano ADA.
Configure the Miner
1. Right-click on ‘start_eth.bat’ file
2. Delete data inside the file
3. Replace the information with:
nbminer.exe -a ethash -o stratum+tcp:POOL_URL -u COIN: ADDRESS.WORKER pause
WORKER can be anything like your name or company’s name.
4. Replace ADDRESS with your ADA Wallet Address
5. Replace POOL_URL with UnMinable’s pool for ADA
6. Save it and boom!
Let me remind you once again that with this way, you’ll mine ETH and get paid in ADA. You cannot mine ADA directly. Let’s get your miner to start mining now.
Run the Miner
Go back to the folder downloaded from unMinable. And open the ‘start_eth.bat’ file. If everything goes well, you’ll be running the miner smoothly now.
How to invest in Cardano?
One way to invest in Cardano (perhaps the safest) is with the help of a broker. In this case, the institution carries out the entire intermediation process of transactions between the parties involved.
In addition, these entities can provide their own virtual wallet for storing their cryptocurrencies.
The other way is precise with ‘Cardano mining’, which as we have seen is not the ideal term. That is, with the extraction of tokens by the Proof of Stake protocol.
In this process, the miner is rewarded for validating transactions with ADA units. Much like mining other cryptos, only simple and affordable.
One more way to make money with cryptocurrency is with the process called P2P ( peer-to-peer ). Which is nothing more than carrying out transactions directly with the other party involved, without a broker or intermediaries.
This option, however, is riskier as there is no guarantee that you will receive the tokens or money. The relationship between the parties here is based on mutual trust.
In addition to exchanging wallets, it is possible to store Cardano in digital or physical wallets. Whether they are hot ( hot ), which are connected to the internet, or cold ( cold ), which do not depend on a connection to the network.
How to keep Cardano in a wallet?
Cryptocurrencies are stored in digital wallets. That is software devices (applications, etc) developed for this purpose.
With Cardano it is no different. There are a few wallet options where this cryptocurrency can be safely stored.
As already mentioned, in some cases the storage can be done in the brokers’ own wallets. But some other options are:
Yoroi – The Cardano Wallet (Google Play)
Atomic Cardano Wallet
Ledger (Cold Wallet)
Advantages and disadvantages
It is the first digital currency and blockchain to be supported by a scientific approach, which results in the greater potential to be successful compared to others;
it is more adaptable, ADA users can use the same currency in different countries, complying with various laws and regulations;
blockchain segmented into two layers, liquidity and computation, which separately process trades with its ADA tokens and smart contracts;
it is decentralized, no central entity has control over the security and validation process of transactions;
brings an innovative proposal, being considered the third generation of open source cryptocurrencies;
access to financial services more democratic.
it is still under development, other blockchains have early entry advantage;
other blockchains are already capable of processing over a thousand transactions per second;
Maximum scalability is 257 transactions per second.