What is Mining, Minting, Forging and Staking?
These are all different names for how you earn rewards using your computer hardware to verify transactions on the network. Each type may use different algorithms and proof types.
Bitcoin and some altcoin mining use ASICs (Application Specific Integrated Chips) to compute large hashes in order to solve an algorithm. The algorithm may dictate a specific type of hardware like CPU or GPU. Upon solving a block, a miner (owner of the machine), earns a specific reward in that currency.
The term minting refers to the creation of a new coin through a similar process. Generally, used by platforms like NXT where you can create your own currency on their blockchain. Forging and Staking are based on Proof of Stake systems that allow users with wallets holding coins (sometimes a minimum number) to earn rewards for keeping their wallets online. There are other proof types like Proof of Stake Time and Delegated Proof of Stake (STEEM) as well.
How Do I Mine? I Want To Create Money!
Cloud Mining
There are several ways to get started, depending on your time, resources and interests. The quickest way to get started would be to signup for a Cloud Mining service. Pay them in fiat or bitcoin in exchange for hash power and payouts daily. Genesis-Mining is the most reliable and one of the oldest cloud mining services. If you purchase hash power through them, you can get a discount on each purchase with code: mJI5S2. The most profitable is probably Hash Flare.
Some benefits of cloud mining are saving money on electricity and not having to monitor your miners constantly. Your rented miners will be online continuously as long as the mining is profitable. That means daily or threshold payouts are a reliable passive mining income for a one time purchase, plus maintenance costs from rewards.
Some disadvantages are the fees on each of your earned shares, no control over the mining equipment and you have to trust the company operating the miners. There is also the consideration that a large cloud mining company centralizes the network to an extent.
Pool Mining vs. Solo Mining
If you want to turn your CPU or GPU into a money-making machine, you can either solo mine or join a mining pool. Let's talk about pool mining first. Solo mining is not nearly as profitable unless you are using a proof of stake or proof of stake time model.
There are dozens of pools out there and most of them are using open-source pool software available on Github.com, like the Cryptonote Universal Pool. The primary reason to use a mining pool is to earn rewards based on shares versus taking much longer to mine a block solo (could be years in bitcoin). You pool your mining efforts, thus Pool Mining.
Setting up the software to use your own miners can be a difficult process. Whether you use ASICs, CPU or GPU algorithms, you need software to tell your hardware what to do. Then you have to configure the software, point it to your pool and run the miner. (See image at top of post for mockup). The same is true for solo mining, but you use your localhost instead of a stratum and set your wallet address as the user.
There is a much simpler option. Let's say you just want to run your computer while you're not using it and don't want the hassle of setting up your own software and configuration...
Solo and Pool Mining
Probably the most profitable pool mining software I have used to sell hash power is Nice Hash. They use algorithms to switch to the most profitable coins to mine based on bids from buyers. Just sign up, download the client, enter your username in the software and start mining with CPU and GPU. It will automatically switch algorithms (roughly 30 seconds to 5 minutes) to send your hashes to the most profitable bidder's pool. Basically, you mine any altcoin and earn bitcoin for each share based on the bid amount in BTC/GH/DAY.
Note: any of the miners (Nice Hash, cgminer, bfgminer, sgminer, multi-miner, cpuminer, et cetera...) may be blocked by your firewall. Just create an exception to allow those programs access in your antivirus software and you should be fine. You may have to uninstall and reinstall the mining software for it to work properly afterwards.
What About Staking? That Sounds Profitable
You're right. Staking can be profitable, depending on the coin's market cap, trading volume, price and demand. Another factor is the minimum required coin in your wallet available for staking. In NXT, you can forge if you have a minimum of 1,000 NXT. However, those with much larger amounts (100k+) will be rotated into the queue to find more blocks much more often, so it really is not profitable unless you have a lot of coins.
The two most profitable Stake coin types are probably coins like Vericoin with Proof of Stake Time (PoST) and STEEM with Delegated Proof of Stake (DPoS).
PoST allows users to stake with any amount of coin with interest that decreases over time. If you complete a transaction, you have to wait for your coin to mature 24 hours before staking. Once the process starts, your chances of mining rewards from your stake increase and your interest decreases. Sounds complicated, but they have published a PoST White Paper to explain the process.
DPoS
is the proof system used on Steemit. Rewards are sent to a certain number of delegates (we call them witnesses) based on the weight they carry from voters for processing transactions. Delegates (witnesses) are also responsible for implementing changes and ensuring the platform is up and running efficiently at all times. That is why it is important to vote for witnesses. I can recommend a few:
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... Anyway, check out their witness threads and see if you like what they are doing to support Steemit. You can use up to 30 votes so don't be shy.
In Summary
By far, the most profitable hands-off way to mine if you have the money is Cloud Mining. If you have hardware and/or just want to use your machine, then you should consider Pool Mining. If you are hands-on and have some resources, invest in some mining rigs and point them at the most profitable coin at the time.
Proof of Stake coins allow you to leave your wallet unlocked for staking and hold some coins to earn with no additional effort. This is a nice passive way to earn, given you have some coins to stake.
You can see which coins are the biggest gainers and losers (1 hour, 24 hour, 7 day tabs) from Coin Market Cap.
DISCLAIMER: This post is my opinion based on research and experience. To mitigate risks from software downloads or damage to your hardware, use an anti-virus program and due diligence. A little research goes a long way.
As always, thank you for following, up-voting, re-steeming! Please only do so if you found this content valuable. Also, I really like to engage with feedback. Leave a comment!