What is meant by Solo mining of a cryptocurrency?
Solo Mining is one of the central processes when talking about cryptocurrencies because this process writes transactions into blocks. Miners basically provide their available computational resources and use them to solve complex mathematical formulae.
The key point is the fact that a nonce must be calculated that is at least equal to or lower than the current difficulty in the network. If a correct nonce is found, the block can be completed and the miner receives a reward.
The key parameter in mining is the so-called hashing power. This expresses how many arithmetic operations can be completed within one second. A high hashrate means that the chance of success for the completion of a block is higher.
The hashrate is also important for determining the current difficulty; it rises once the computing capacity increases on the network.
This means that as the computing resources in the network increase, the hash power requirements also increase; and the yield decreases while the hashing power remains the same.
What is solo mining?
Solo mining is an independent mining approach. A solo miner only uses personal computing capacities, such as mining rigs are to be mentioned, which have a special optimization for the mining. Mining using the CPU or GPU is also a popular approach here.
However, solo mining is very complex and expensive since the entire infrastructure must be operated. Alternatives have emerged, such as mining pools and cloud mining, which are gaining more and more popularity in the community.