(If you don’t know much about Bitcoin then check out this eBook)
UPDATE: Even altcoin mining is a waste of time now, mentioned in more detail in my latest blog post
Bitcoin mining has now become so difficult that only a minority of people with expensive ASICS (Application Specific Integrated Circuits) can make money, and even then they can struggle to get a return on investment (ROI). Unlike with bitcoin mining, scrypt cryptocurrencies, such as litecoin, worldcoin, dogecoin and netcoin, can be mined with a graphics card (GPU) and are therefore still profitable. Far more profitable than bitcoin or other sha256 coins.
Due to the nature of scrypt cryptocurrencies, ASICS are hard to produce and so far nobody has been able to do so. Perhaps in the future ASICS will be available for scrypt coins but that is not a problem at present. Scrypt coins need massive amounts of fast RAM and that type of memory is not cheap, which is why high-end Radeon GPUs are still the best way to mine scrypt coins.
There are now so many scrypt coins on the market that it’s hard to choose which one to mine for maximum profit. One way to check this is to use a site like Coinwarz, which will tell you how much you SHOULD make in 24 hours with whatever hashrate you have. It isn’t an exact science because the difficulty of each coin fluctuates, however, if you stick with coins that have a steady difficulty then the profit estimates are quite accurate. Currently, dogecoin is one of the most profitable scrypt coins to mine, but that can change overnight so it’s vital that you keep up to date with current trends and the market value, as well as the difficulty.
Once you mine these altcoins then there are numerous exchanges you can use to trade them for other coins, including bitcoin, with total ease. One of the most well known of these exchanges is Cryptsy, but it is also the worst and slowest. My exchange of choice is Virwox but some don’t like the high fees, although I don’t mind paying a bit more for 100% security, speed and reliability. It can often take days to sort deposits and withdrawals, whereas other exchanges take minutes. More info on these exchanges is available in this blog.
The video above is to show you how to select the most profitable altcoins and how to set up a miner.