Warrior Trading Blog

Mining Rig Definition: Day Trading Terminology

mining rig

A mining rig is any computer that is used to process the distributed digital ledger at the core of a cryptocurrency.

Some mining rigs are dedicated computers designed to maximize the return on the purchase price and running cost, while other mining rigs are merely used casually or part-time when they are not performing other tasks.

Cryptocurrency Mining

At the core of every cryptocurrency is the mining process, which requires miners to compute complex calculations to recreate the distributed digital ledger with an updated list of transactions and ownership of the cryptocurrency.

The successful miners are then rewarded with units of that cryptocurrency like Bitcoin, Ethereum or whatever else they are mining for.

Cryptocurrency mining is intended to be a costly process, and it is a substantial drain on computing power and electricity.

Mining Rig Profitability

While cryptocurrency mining was originally intended as a casual and distributed process, some users realized that they could achieve significant profits by creating dedicated and specially designed mining rigs.

The mining rigs were stripped down to their bare bones, and then augmented for maximum computing power and minimal power usage. The other key element of an effective mining rig was access to cheap or even free electricity.

Cryptocurrency mining is now seen as unprofitable for all but the most dedicated miners, particularly anywhere with high energy costs, though many miners still mine for the novelty or because they already own the equipment.

Final Thoughts

Cryptocurrency mining rigs are a key element of the functioning of the cryptocurrency sector. While the mining process for cryptocurrencies was originally intended to be decentralized, casual and distributed, people quickly realized that it could be turned into a profitable venture.

The advent of dedicated mining rigs has shaped the path that the development of cryptocurrencies has taken, and the mining process will continue to play a large role in the future of cryptocurrencies.