Welcome to my easy guide on how to mine Tron cryptocurrency. In this article, we will take you through each step of the process, providing you with detailed information to help you understand Tron, what you need to do to mine it, and how to maximize your mining profits. So, let’s dive in!
This article is part of my series on how to mine altcoins.
Understanding Tron Cryptocurrency
Tron (TRX) is a decentralized platform that aims to create a global digital entertainment ecosystem.
It is designed to provide a platform for content creators to interact directly with their audience, bypassing traditional intermediaries in the entertainment industry.
Tron’s native cryptocurrency, TRX, is used to facilitate transactions and incentivize content creators and users on the platform.
This is their official website.
Tron launched in 2017 as an Ethereum-based ERC-20 token. Soon after, Justin Sun the founder of TRON and CEO of TRON Foundation realized that the Ethreuem network was becoming too clogged up with high transaction fees. To address this issue TRON moved to its own blockchain in 2018.
By mining Tron, you can contribute to the security and decentralization of the network, while also earning TRX cryptocurrency rewards for your efforts.
However, there is one technicality that you need to be aware of.
Can you mine Tron?
Technically you can’t mine Tron because the Tron blockchain does not use a Proof-of-work consensus mechanism.
In proof-of-work blockchains, cryptocurrency mining is the process of validating and adding new transactions to a blockchain. This is achieved by solving complex mathematical puzzles, which require a significant amount of computational power. Miners compete to solve these puzzles, and the first to find a solution is rewarded with newly minted cryptocurrency.
Miners use specialized hardware, such as ASICs (Application-Specific Integrated Circuits) or GPUs (Graphics Processing Units), to perform these calculations. And this is the reason why Proof-of-work crypto coins such as Bitcoin, Litecoin, and Monero guzzle up so much energy.
Tron is different though.
It uses an alternative consensus mechanism known as Delegated Proof-of-Stake.
So if you want to be down with the crypto slang you can say you want to stake TRON rather than mine it.
Delegated Proof-of-Stake explained
With a delegated proof of stake blockchain the miners are called validators. To make matters more confusing TRON uses its own terminology and calls validators super representatives. I will stick with validators to keep things simple.
Every time a new block needs to get added a validator is selected at random. But in order to participate as a validator you need to put up a lot of TRON. If you try to trick or mess with the system then you lose your TRON i.e. your TRX is at stake and hence the terminology. The more you stake the higher the chance that you get selected. The validator that ends up adding the block is rewarded in newly minted TRX tokens.
Now, you don’t need to be a validator to participate in the process. If you want you can simply lend your TRX coins to a validator and if they win the block they will share the mining rewards with you in proportion to how much you staked.
Proof of stake blockchains are considered very robust. For example, the Ethereum blockchain itself has moved to a proof of stake model.
Why Mine Tron Cryptocurrency?
There are several reasons why mining (staking) Tron cryptocurrency can be a profitable venture. Firstly, Tron has a growing community and ecosystem, which increases the demand for TRX. By mining TRX, you can accumulate TRON coins and potentially benefit from future price appreciation.
Additionally, Tron’s Proof-of-Stake (PoS) mining algorithm allows you to participate in securing the network without the need for expensive and power-hungry hardware. This makes Tron mining more accessible for individuals with limited resources.
Furthermore, by mining Tron, you contribute to the decentralization of the network, making it more resistant to attacks and ensuring the stability of the platform.
Moreover, Tron’s blockchain technology offers various use cases beyond just cryptocurrency. The Tron network supports the development of decentralized applications (DApps) and smart contracts, providing opportunities for developers and entrepreneurs to create innovative solutions on the platform. By mining Tron, you not only have the potential to earn TRX but also contribute to the growth and advancement of the Tron ecosystem.
TRON Numbers
TRON generates a new block every 3 seconds. It has a circulating supply of 89 million TRON tokens (TRX) but it has no fixed maximum. Its total supply also stands at 89 million as no coins have been burnt.
TRON’s market cap is $7Bn at the time of writing which puts the TRON protocol in the top 20 cryptocurrencies by market capitalization.
Getting Started with Tron Mining
To start mining Tron, you need to follow a few steps:
1. Choose the Right Mining Hardware for Tron:
Tron utilizes a Proof-of-Stake algorithm, so you don’t need specialized mining hardware. Instead, you need a computer with a stable internet connection and a Tron-compatible wallet to stake your TRX.
2. Set Up a Tron Wallet for Mining:
Before you can start mining Tron, you need to set up a wallet to store your earnings. There are several options available, including hardware wallets, software wallets, and online wallets. Choose a secure wallet that supports TRX.
Popular wallets for staking TRX are
- TronLink
- Vision wallet
- Atomic Wallet (check my comparison of Atomic Wallet vs Coinbase for more on this one)
- Guarda
- Trust Wallet
- Simplehold
- Nano Ledger ( a hardware wallet)
- Trezor
If you decide to use a centralized exchange you don’t need a wallet.
3. Buy Tron
You can purchase TRON on any of the major crypto exchanges. If you are in a rush you can use a credit card but this will incur larger fees.
4. Stake your TRON
The easiest way to mine TRON is to do it on a major crypto exchange such as Coinbase, Uphold, Kraken, and the like.
So move your TRON from your wallet to the exchange if you have not done so already.
On the exchange, you should see the option to stake. This is by far the simplest way to earn a yield on your TRON. However, the TRX is on the crypto exchange and not your wallet.
The other alternative is to stake directly with a validator. You will get about 1% higher return by doing this but it is a more complex mining process as you have to manage the reward and staking on your own. This is not worth your time if you are investing less than $50,000 worth of TRX.
If you decide to use the second more complicated way then you will also earn TRON power which will allows you to vote for specific validators.
Calculating Potential Profits from Tron Mining
Calculating potential profits from Tron mining depends on various factors, such as your mining hardware, electricity costs, and the number of TRX you stake. The current payout for PoS mining with Tron on an exchange is 3.45%.
Exploring Alternative Methods of Earning Tron Cryptocurrency
If you don’t want to do the whole proof of stake mining thing then there are alternative ways to earn a yield on your TRON.
You can lend it or add it to a liquidity pool both of which will give you a decent yield. For more on this read my article on passive crypto mining.
FAQs
Should I join a mining pool for TRON?
No mining pools are only relevant for those who mine on proof of work blockchains. TRON is a proof of stake blockchain.
Can you mine TRX with CPU?
No you can't mine TRX with CPU and neither can you mine it with an ASIC miner or a GPU. Tron is a proof of stake blockchain. This means you can buy TRX and stake it with a validator to earn a return but you can't use graphics cards and the like to mine it.
How do I get Tron crypto?
TRON is readily available on any of the major crypto exchanges including Coinbase, Gemini, Kraken, Kucoin and the like.
Can I use a cloud mining service to mine TRON?
No cloud mining providers focus on proof-of-work blockchains like Bitcoin and Ethereum Classic. If you are looking for a hands off way to mine TRON then do it via one of the large crypto exchanges.
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