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What is Spec Mining? All you need to know about speculative mining
This is a great article from CoinGuides that we pasted here so you can read it ad-free :)
What is Spec Mining? All you need to know about speculative mining
Copyright coinguides June 3, 2019
There is a coin called Spec coin which is current inactive. Well, here we are not talking about mining spec coin but spec mining.
Instead of mining the most established / profitable coins have you ever mined a new altcoin before it has been priced? Well, that’s called spec mining. If you are in Discord or if you are following any mining community on social media then you might have seen people mentioning this: “I’m currently spec mining XXX coin”.
Newbies often think spec mining is something different than ASIC / GPU mining or some kind of cloud contract. No, it is not. Spec mining = Speculative mining a new cryptocurrency at launch and / or before price / value discovery.
Recently one of our users asked what is spec mining and where do I find coins to spec mine. Here in this post we’ll explain everything that you need to know about spec mining.
What is Spec Mining?
Spec mining is a short term of speculative mining. It is a process of mining a cryptocurrency which you believe that their value will increase in future but has no established value yet. Spec mining allows miners to have a very low ROI on the coin they are mining and is opposed to mining the most currently valuable coins.
In other words spec mining is nothing but finding and mining a newly launched low difficulty altcoin which not many people are aware of it yet. These type of coins won’t be listed on any exchanges and so they do not have any real price discovery. Also these coins may or may not be available on mining pools. Not only that but since the project is in its early stage the wallet could be buggy and even the mining software would be unstable.
Even though miners can often find valuable / profitable coins on WhatToMine and other mining calculators there will always be a batch of miners looking for coins to spec mine. Have you ever wondered why do people mine these new not so well established coins that have no value? It is because they think the coin might yield a good profit once it goes to an exchange. But this is not the case always.
While speculating mining can yield some major profits (only if done right); it can also be highly risky. Before you get into spec mining know the dangers involved.
Pros and Cons of Spec mining
Speculative mining has both advantages and disadvantages.
It is well worth it if you ever come across a hidden gem. Did you mine Ravencoin in its early days? Then you know what is it worth now. Also think about people who mined Turtlecoin initially and the ones who done OTC trading for less than one satoshi and sold it at 6 satoshi. Not only these, but there are many coins that resulted in great profits for those who spec mined them.
On the other hand think about those who mined those other 100s of scam projects that never even hit the exchange. All those are wasted hash power and this is one reason why large operations don’t get into spec mining.
In current situation majority of new coins are clones which in most cases will end up being trash. Most people who mines these coins are jumping in blindly without any proper research and as a result they end up losing money hashing them.
As with any investment; whether it is cash or hash. If proper research is done then spec mining can be rewarding (but not all the time). However if you simply FOMO in just because others are mining it then you’ll end up losing a lot.
Okay, so is there any criteria to find the right coins?
First of all understand the reason why it is called speculative meaning. People spec mine less established coins because they believe that it will moon at some point. It is not a proven method to get rich and you know that this space is wild. There are tons of scams and low quality altcoins out there. We do not recommend mining every other coins that you come across.
Also if anybody gives you any recommendation on coins to look at then don’t just go by their shill. Instead do your own research. Analyze what the project is all about. Read the whitepaper. Check the website. Get to know the team and ask them questions regarding the project. Moreover make sure there is no premine or ICO and the coin has some interesting features. Finally only get in if you believe in and feel good about the coin that you are going to mine.
Anyways, even with all those research the chances of failing from spec mining is high. With all that said, let’s see how to spec mine and where to find coins for spec mining?
How to spec mine cryptocurrency?
The whole point of spec mining is getting involved with a coin at a very early stage and reaping the benefits of the projects long term success. It’s all about hunting the micro caps and there is no special tactics to it.
The process is simple and is no different than regular mining. If you know how to mine any altcoin then you can also spec mine a coin. All you have to do is find and mine a new or low difficulty altcoin before it gets priced or has been placed on a market.
Now where do I find such new and low difficulty altcoins? Well, here are few places to look at.
GitHub, Reddit, Discord, Twitter, Telegram and most importantly Bitcoin Talk announcement thread.
To know how to find one take a look at the following link that explains how to find new launched low difficulty altcoins.
Before you get into mining
Now here are few things to note when it comes to spec mining.
If you are mining a new and low difficulty altcoin then chances are; the coin may or may not be available on mining pools. So you must basically know how to solo mine.
Spec mined coins cannot be converted immediately. If you looking for coins to mine and sell immediately then this kind of mining is not for you. Coins that are newly released won’t be listed on any exchanges. If you are willing to buy or sell your mined coins then OTC is the only way. If you are not comfortable with OTC trading then you’ll have to wait until the coin gets listed on an exchange.
There are not much tools available to guide you. You are on your own. Initially when the coin is launched you may not find mining calculator and even block explorer. If you are new then you’ll find it difficult to calculate the mining rewards. Also since you are solo mining you should keep an eye on network difficulty and other parameters. Else you’ll end up losing your hash power.
If none of these applies to you then spec mining is not for you. There are many profitable established coins out there which you can mine. Always do your own research and find the ones that you believe has long term value.
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