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How Does Mining Work?

Most people know about the basics of cryptocurrency, but are not aware of how the infrastructure behind it works. Learn how cryptocurrency networks use mining payouts to incentivize the security of a decentralized system.

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The Infrastructure Of Crypto-Currency

1. How Does Mining Actually Work?

Verifying Payments

Mining operates very similarly to how servers work for banks and credit card companies. This process makes sure that there are no duplicate transactions on the network when money is sent from one account to another. Banks and CC companies handle the verification process themselves for all of their transactions for which they take a transaction fee for doing so.

Block Validation

In the mining process, information is validated in a blockchain block by generating a cryptographic solution that matches specific criteria. When a correct solution is reached, a reward in the form of new crypto and transaction fees for the work done is given to the miner(s) who reached the solution.

<a href="https://www.flaticon.com/free-icons/crypto" title="crypto icons">Crypto icons created by Freepik - Flaticon</a>

Infrastructure

Mining is the infrastructure of crypto. The purpose of mining is to validating the transaction information and maintaining the integrity of the blockchain, while the crypto reward is the incentive to mine. Mining is necessary to maintain the ledger of transactions upon which Bitcoin is based.

You Can Benefit

Since most cryptocurrencies are decentralized, there isno single company that owns the right to set up infrastructure to manage and verify transactions. This allows people and businesses alike to take advantage of it, generating revenue from the process of securing the blockchain.

For a more in-depth breakdown of how mining works, click here.
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Respective Benefits
2. Why Do People Start Mining Crypto?

Crypto mining is generally looked at as more of a long term venture compared to trading.

So what benefits does crypto mining have?

Machine Revenue Appreciation Potential

Historically, as the price of the coin that a machine mines increases, the value of the machine production increases as well. Miners that accumulate and hold their mined crypto have the potential to see their entire mined portfolio increase with the value of the market.

Machine Value Appreciation Potential

Each crypto mining machine has a market value. The market value of each machine flucutates based on how much revenue the machine produces. Historically, as the production of machines increases, their resale value on the secondary market has the potential to do so as well. 

Passive Operation Revenue Potential

Cryptocurrency mining is very energy intensive, which is why we have hosting centers strategically located around the world where we can provide affordable electricity, with stable cooling and filtration solutions and on-site technicians monitoring your machines for a truly hands-off mining operation.

Tax Deduction and Advantage Potential

Clients can structure their purchases to get potential tax deductions for their equipment purchases and operational expenses for both their personal and business accounts. Please contact a tax professional to see if a mining hardware purchase is something that can use as a deduction. 
Coins We Mine

Our mining operations cater to the most profitable algorithms on the market using the newest and most efficient hardware available.
Learn about the current coins we are mining.

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Bitcoin

The gold standard of crypto mining. Bitcoin offers significantly more

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Doge/Litecoin

North Washington holds our green energy facility where we source power directly from a hydroelectric plant.

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Kaspa

Northwest of Austin holds our green energy facility from wind and solar power supplemented by grid surplus.

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3. Options For Getting Started

3a) At-Home Mining Farms

Each machine takes on average 3400 watts of power, which is the largest barrier to entry for most individuals looking to get started with crypto mining. Before getting starting, check your cost of electricity. If it is higher than .098/kWh, you will get a better electricity rate by hosting your machines at one of our facilities.

For the wattage consumed, you will need at least a 220v 20 amp outlet. It is also important to use a PDU that has outlets that are rated for your voltage. Mining does not require a significant amount of internet data, but will need a consistent wired internet connection to connect your ASIC miner. Our team will provide guides on how to properly set up and configure your mining equipment if you choose to operate it at home.

3b) Miner Hosting

Due to the large power requirements of mining, most people are not able to take advantage of crypto mining because of the high electricity rates across the country. That is where we come in. We have data centers working directly with large power producers like a hydro-electric dam at our Washington facility and a wind farm in Minnesota where we have rates locked in that are cheaper than most places in the country.

This gives us the ability to offer our clients full a-z facilitation where you purchase and own your machine, but hire us to operate your machinery at significantly cheaper rates than if you were to run it at home and maintain it.

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What Is Hosting?

4. What Is Miner Hosting?

When clients choose to work with us, we store and manage their equipment in facilities designed specifically for operating high powered mining machines. Power purchase agreements put in place with electricity providers locking each client into a set electricity rate. This makes mining at our facility often significantly cheaper than running anywhere else. 

Each facility is created with solutions for cooling, air filtration, and monitoring in mind. Hosting with us features access to on site technicians handling all hardware operations, upkeep, and software regulation to give clients a hands-off mining experience. 

5. How To Start Mining With Us

5a) Click 'Get Started' Below

Click get started and fill out a purchase order to select your desired machine, quantity, and whether you want it hosted or delivered. You will then be directly contacted by your personal mining ambassador. Our ambassador will provide an invoice and give you a full walkthrough of our purchase agreement and contracts. Your ambassador will be there to guide you through any questions you may have moving forward.

6b) Get Set Up With Hosting

After payment is received, our facilitation team will begin setting up your mining operation. When hosting with us, your machines are set up to give you an entirely hands-off mining experience. You maintain complete ownership of your machine and retain sole access to your mined income. Monitor your machine's production in real time, get live updates and support from your ambassador, all while getting a cheaper electricity rate than most places in the country.

6c) Get Direct Crypto Deposits 

Watch your portfolio grow every single day. Monitor your machine performance in real time via your machine interface. Use your phone or computer to see your live machine production, mining efficiency, and more. Store, save, trade, and grow your crypto portfolio with daily deposits into your crypto wallet of choice. 
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Available Hosting Sites

We offer hosting services across North America, and our years of experience in IT infrastructure allow us to bring you exceptional value at an affordable price point. We make it easy for partners to white label our solutions and create and scale their own industrial grade mining operations.

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Site Alpha

South Carolina, holds our modular data center grid facility where we source power from renewable grid sources.

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Site Bravo

North Washington holds our green energy facility where we source power directly from a hydroelectric plant.

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Open

Site Charlie

Northwest of Austin holds our green energy facility from wind and solar power supplemented by grid surplus.

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Qualifying Questions
Is Mining Right For You?

Are You Looking To Invest In Crypto For The Long Term?

Crypto mining is a long term purchase into the infrastructure of crypto. While crypto mining may generate cashflow every single month, the beauty lies in the upside potential of your entire mined portfolio and the value of your equipment. Experts recommend to be prepared for the long term to truly get the most out of their mining operation.

Are You Purchasing With Money That You Are Reliant On?

If you are using money that you need to pay your bills, please be advised. While there may be a high upside, mining is not something that will guarantee rewards or make you rich overnight, however. A good rule of thumb is to only purchase with what you can afford to lose.

Do You Have Liquid Assets?

Liquid assets are all of your cash, crypto holdings, stocks, and other assets that can be easily converted to cash. Crypto mining often requires a minimum purchase amount of ~ $10,000 to get started. That money is locked up in a machine that may take some time to liquidate. We recommend anyone interested in getting into mining to diversify only the assets they are not going to need in the immediate future - similarly to real estate rental property.

State Of The Art Operations
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Mining Made Simple

"At Pickaxe, we strive to raise the bar for service in the crypto mining industry. When making the decision to purchase crypto mining hardware, the process should be smooth and transparent. That's why we strive to build out a relationship with each and every one of our clients based on trust and clear and direct communication. "

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Edward Zhidovlenko

Co-Founder

Frequently Asked Questions

What payment methods are accepted?

We accept Ethereum, Bitcoin, USDT, wire transfer, ACH payment, and credit card transactions (with an added 3.9% fee)

Do you accept payment plans/financing?

Unfortunately we do not accept payment plans for our machines.

How do I monitor the machines?

We use third party monitoring systems for all of the machines that allow you to see real-time machine production via a website or phone app.

Can I choose to take my machine back if hosted at your facility?

When hosting your machine with us, you are not locked into a long contract. You have the option to take the machine back after 12 months or resign the contract for another 12 months.

Do you have access to the machine payouts?

We make sure to use a third party software to ensure that you can choose if we have access to the machine production, but we can still monitor the performance pool-side to ensure stable operations.

How long does it take for the machine to deploy?

All of our machines are shipped worldwide from our Hong Kong distribution facility to ensure quick shipping times across the globe. If hosting with us, we estimate deployment from time of payment at about 2-3 weeks. If you are getting your machine delivered, it is significantly quicker at about 5-7 business days.

Do you offer wholesale discounts?

We offer wholesale quantity discounts for all aspects of our operations. We work with institutional miners to help procure equipment and hosting at industry-leading rates.

Do you control payouts from my machine?

You recieve consistent payouts in the coin being mined or BTC every 4 hours to a wallet of your choice via the 3rd party mining pool software that we configure the machines on. We do not have control the funds being generated.

*DISCLAIMER* This website is provided for informational purposes only. None of the material on minepickaxe.com is intended to be, nor does it constitute, a solicitation, recommendation or offer to buy or sell any security, financial product or instrument. You should conduct your own analysis and consult with professional advisors prior to making any investment decisions. Cryptocurrency investments have historically been highly volatile and are for investors with a high risk tolerance. Investors in cryptocurrency could lose the entire value of their investment. 

Pickaxe does not guarantee earnings, estimated returns, or profit estimates to be accurate as they are subject to change based on daily market price fluctuations, difficulty, Block Luck, estimated equipment lifespan, and other factors. Pickaxe does not guarantee that these earnings, estimated returns, or lifetime profits will be substantially similar or equivalent to the estimated values stated here. Pickaxe does not guarantee the lifespan of equipment or the viability, profitability, or stability of any crypto currencies. All production estimates are shown before electricity cost according to third party calculations. The content provided by minepickaxe.com is for educational and informational purposes only and does not constitute financial, tax, or legal advice. It is not intended as a substitute for professional advice. Pickaxe makes no representations about the reliability or suitability of the information provided – any action you take based on this content is at your own risk.

Pickaxe Mining Inc. © 2024