How To Mine Monero (XMR) In 2021

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How To Mine Monero (XMR) In 2021

In this how to mine Monero guide, we will provide you with the important information you need to know before you mine this cryptocurrency. We will also offer guidance on building your Monero mining rig and where you can sell your coins for a profit.

What is Monero?

Monero is an open-source digital currency that was built on the main premise of privacy. Launched in 2014, it is built upon a Blockchain that disguises the addresses of transaction participants. As a result, this has made it particularly popular amongst online casino players, as well as consumers looking to purchase goods and services anonymously. Given this popularity, the coin is frequently traded online. In addition, users searching how to mine Monero are also on the increase.

Why Mine Monero?

Monero is one of the more popular cryptocurrencies around. Although it currently ranks 28th in terms of market capitalisation, it is important to remember that there are over 4,000 coins and tokens competing for top positions. Moreover, until recently, the coin held positions within the top 10 rankings, and it is quite possible that it will regain some lost ground in the future.

Since you are reading this how to mine Monero guide, you likely do not need much convincing to get started. If you’re still on the fence about it you should consider that the coin had a price of around $10 in January 2017 and a price of $494 just a year later.

Few opportunities provide an asset value increase of 4800%. Following this price, Monero’s value dropped back down to $33 by March 2020, only to rise back to almost $471 just over a year later. In fact, if you study a Monero price chart you will notice that this coin is particularly volatile. Periods of low prices are countered within a few months with price hikes. This means that if if you learn how to mine Monero and then time the moments when to sell, you can stand to make significant margins. The coin’s high volatility and average daily trading volume worth over $532 million makes it a popular coin to trade for Bitcoin (BTC).

How does Monero Mining work?

As we write this guide on how to mine Monero, there are currently just over 17.9 million XMR coins in circulation. These will continue to increase until a total of 18.4 million are mined. Once this number is reached, new coins will still be minted, but at a fixed rate of 0.3XMR/minute.

Monero mining relies on the tried and tested, Proof of Work (PoW) mechanism. This is the same mining system utilised by top cryptocurrencies, including Bitcoin. In essence, it utilises the computational power of miners to solve increasingly complex equations in order to come to a consensus and validate transactions. Miners are responsible for ensuring the integrity of the Monero blockchain and for creating new blocks. For their efforts, they are rewarded with newly minted XMR coins.

You can read more about how PoW works in our detailed guide.

Important Information About Mining Monero

The following is some of the latest statistics associated with mining this cryptocurrency. In the following sections of this how to mine Monero guide you will be able to understand why this information is important.

  • Current block reward: 1.16XMR.
  • Average time to mine a block (block time): 2.13 minutes.
  • Average time to mine 1XMR: 1.54 minutes.
  • Average transaction fee per block mined: 0.00018XMR
  • Average hash rate: 2.70 Ghash/s.

Setting up your Monero Mining Rig

Once you learn how to mine Monero you will need to have a computer, or “rig”, to mine it with. Fortunately, mining this cryptocurrency is still relatively easy and can be done with a normal PC. If you intended to mine Bitcoin, for example, you will need a much more powerful mining rig.

Mining Monero on Phone

It is common for people looking to learn how to mine Monero to ask whether it is possible or feasible to mine cryptocurrency on a smartphone. Whilst this is possible, even for Monero, the potential returns are normally insignificant. As a result, whilst you can certainly mine Monero on a mobile phone, you cannot expect to turn a profit or even afford to buy a candy bar.

Once you have collected the following information and data, you can use a free mining profitability calculator, such as Whattomine, to calculate potential earnings.

Hardware & Equipment

When choosing to mine Monero you can opt to use a CPU or a more powerful GPU. You can find cheap CPUs, such as the AMD Opteron 627 or the Xeon L5640 for between $50 – $150. These provide hash rates of between 130 – 415 H/s. On the other hand, if you are ready to make a larger investment in return for better margins, you should go for a GPU. The AMD Ryzen Threadripper 3970X, for example, can provide a hash rate of 28,000 h/s, but this comes at a cost price of almost $2,000.

Other components of your rig, including power supply, graphics card, and the rig itself must simply match the specifications outlined on the CPU or GPU. If you have opted for a GPU, then even the CPU doesn’t need to be powerful. An i5 or i7 should suffice.

Energy Consumption

Before going ahead with purchasing your components, you should calculate their energy consumption and add a buffer of around 20%. This is an important calculation since electricity will be your greatest running expense. If you are able to utilise cheap electricity, such as from renewable sources, you stand to make a much larger profit.

Hash Rate

The hash rate is an important characteristic of your GPU or CPU. In essence, this is the computational power per second that is required to mine Monero or any other cryptocurrency. The Monero average hash rate is 2.7Gh/s which translates to 2,700,000,000h/s. As you probably realise, even a powerful GPU would take significantly long to mine one coin. We will explain how you can join a mining pool later on in this how to mine Monero guide.

Software

You can find several XMR mining software options on the Internet. We recommend you use the XMR-STAK-CPU software as it is easy to use and can allow you to start mining without needing technical knowledge. This software charges a 2% development fee unless you can compile the source code yourself.

Is it Worth Mining Monero in 2021?

This is a very common question, especially by those looking at how to mine Monero. Generally speaking, it is still worthwhile mining this popular coin. However, you need to understand your specific circumstances, including the initial price of your investment, the running costs of electricity and maintenance, and the ultimate sale price of the coin.

Different Ways to Mine Monero

Once you have learnt how to mine Monero it is time to get started. There are three main ways to mine this cryptocurrency, namely:

  • Alone – without the help of other miners.
  • Pool – collaborating with a group of miners.
  • Cloud – renting rigs instead of using your own.

Mine Monero Alone

Monero Mining Alone
Source: Snapcraft

You can start mining Monero alone once you have the necessary rig and software. There are certainly benefits to mining on your own, including no sharing of profits and no rules to abide by. However, in an increasingly competitive mining market, it can be very difficult for you to mine any significant amount of XMR.

Mine Monero as Part of a Pool

Monero Mining Pool
Source: Cryptoage

Mining pools are a group of individuals, or rather, computers, which combine their computational power in order to mine cryptocurrencies faster. When you join an XMR mining pool you benefit from higher profits, although these are shared amongst all members. In addition, certain pools charge an administration fee and may have certain minimum rig requirements to enter.

It is important to note that unlike when you mine XMR directly, new coins from mining pools go to the mine administrators. It is then up to them to share them fairly. Unfortunately, there have been instances where this did not happen and pool participants were defrauded. The best way to avoid this is to join reputable mining pools with years of existence.

Mine Monero on the Cloud

Monero Cloud Mining
Source: Genesis Mining

Mining Monero on the cloud is an alternative to buying and operating your own rig. With this option, you are renting out computational power from a mining farm. Since no initial investment is required, but you can still benefit from the advantage of combined computational power, cloud mining can be a cost-effective way to mine Monero. Profits are shared amongst cloud miners based on their participation. However, just like with mining pools, there is a risk of cloud miners disappearing with your coins.

How to Mine Monero

In the following section of this guide, we will explain how you can mine Monero using either of the three options.

Mining Alone

If you would like to start mining Monero alone, all you need to do is:

  1. Purchase the necessary equipment to set up your rig.
  2. Download the mining software.
  3. Set up a Monero wallet where to store your coins.
  4. Start the mining software.

Mining Pool

The steps to start mining Monero using a pool are similar to those required to mine alone. These are:

  1. Lookup various mining pools and relevant rig requirements.
  2. Once you have settled on a pool, open an account with them.
  3. Purchase the necessary rig equipment.
  4. Download the mining software provided by the pool.
  5. Set up a Monero wallet where to store your coins.
  6. Start mining Monero.

Mining Cloud

Unlike the previous two methods of mining Monero, using cloud servers is fairly easier and faster. All you need to do is:

  1. Locate a suitable Monero mining cloud.
  2. Open an account and decide how much you will invest.
  3. Set up a Monero wallet where to store your coins.
  4. Pay the cloud server fees.

Tips for Storing Monero

One of the common factors between all methods of mining Monero is setting up your wallet. A cryptocurrency wallet is a vital component, designed to securely store your coins and prevent them from being stolen. You can read our detailed guide on cryptocurrency wallets, but for the time being, you should know that there are two main types of wallet and that not all wallets support Monero.

We found the following wallets to be especially ideal for storing Monero.

Ledger Nano S

The Ledger Nano S is a hardware wallet able to support over 1,100 different coins and tokens, including Monero. Durable, lightweight and easily portable, the Nano S is considered to be one of the safest cryptocurrency wallets in existence. It is known for offering superb value for money, featuring a display and two buttons to help you manage transactions. In addition, you can connect the Nano S to your computer and use Ledger Live to easily manage and carry out transactions.

Trezor One

Trezor One is a cold storage device and one of the oldest cryptocurrency wallets in existence. The manufacturer is well-known for offering wallets that are practically impossible to hack remotely and have a stellar track record in security. The Model One supports almost 1,200 different coins and tokens, including XMR, and is very easy to use. It features two buttons with which to manage transactions and can connect to your PC via USB. Trezor Bridge facilitates the connection between your wallet and PC, providing a convenient way to manage and execute transactions.

Guarda Wallet

The Guarda Wallet is a software wallet available on computer, mobile, and web browsers. Free to set up, it provides a fast and convenient way to store your newly mined Monero coins. However, since the wallet is constantly connected to the Internet, it is considered to be significantly more vulnerable than a hardware wallet. As a result, you should only use such a wallet temporarily, such as to convert coins to BTC or cash. The Guarda Wallet is very easy to use, with support available in case you need any help.

When and Where Should You Sell Monero?

How to Sell Monero

The reason you have looked up how to mine Monero is that you hope to turn a profit from mining this cryptocurrency. As a result, it is natural to wonder when and where to sell it. Answering when is difficult since the price of this coin is highly volatile. As a result, it could easily increase or decrease by 200% or more in a couple of hours. Since it is difficult to predict what the price of Monero will be in the future, you should seek to sell it when its price is, at the very least, equal to the cost of producing it.

When it comes to where to sell Monero, the answer is significantly easier. Cryptocurrency exchanges offer the best method to sell Monero for fiat currency or exchange it for another coin, such as Bitcoin. Whilst there are numerous exchanges available, we have found the following to be the best for Monero.

Kraken

Kraken is one of the world’s oldest cryptocurrency exchanges and has a reputation for offering a safe and reliable environment in which to trade coins and tokens. The exchange offers a quick account opening procedure and lets you store your XMR coins in a free, in-built wallet. Due to the exchange’s high liquidity and popularity, you can sell Monero in seconds and benefit from competitive fees.

Binance

Binance is one of the world’s largest cryptocurrency exchanges, supporting the conversion of over 450 different coins. Whilst this exchange lets you buy Monero using a debit or credit card, it does not currently support the sale of this coin. Instead, you can convert Monero to a more popular coin, such as Bitcoin, and then transfer this coin to an exchange in order to convert it to fiat currency. Although this might sound like an extra hassle, Binance is known for offering some of the lowest trading fees, so this process might provide you with a better EUR value in the end.

Alternative Coins that are Easier to Mine

There are a number of coins that are relatively easier to mine than Monero. Coins, such as Dogecoin and Ravencoin, require less powerful computers and can sometimes also be mined on mobile phones or web browsers. Another significant alternative is Komodo, a cryptocurrency designed to let users develop their own blockchains and sell their own tokens.

Over the years there have been numerous coins that were easy to mine. Tron, for example, required relatively primitive equipment. Unfortunately, the coin has been completely mined, so you can only get hold of it today by buying or trading it.

Conclusion

Understanding how to mine Monero can help you understand if it is worth it for you to make the investment or not. This coin has, so far, withstood the test of time, gaining significant popularity along the way. Given its high price volatility and its increased use in online purchases, it is likely to remain a popular coin that is worth mining. Before you do, however, you should calculate potential earnings and ensure a reasonable return.

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