Mining cryptocurrencies often involves buying mining equipment, hardware knowledge and hours of dedicated work and patience. That’s because most cryptocurrencies are mined through a Proof of Work protocol, which means that you need to provide computational power to maintain the network, register transactions and get coins. In a Proof of Stake algorithm, coins are mined by staking coins you already own: the more you have, the more you’ll make - its a form of interest. This consensus protocol has many benefits, the most noticeable being energy efficiency.
In order to accommodate users that want to participate in the mining consensus, but don’t want to fill their house with hot and loud equipment or bet in a Cloud mining contract, we are going to show you how to mine (forge) NXT. Let’s call this a guide for miners who don’t want to get their hands dirty!
NXT is a fully pre-mined cryptocurrency with a limit of 1,000,000,000 NXT. But if the currency is fully pre-mined how can users get rewards by mining if they’re not producing new coins?
Nxt relies the transaction fees spent on the NXT platform to reward the miners. The minimum fee for any NXT transaction is 1NXT. This process is called “Forging” NXT.
Part 1 - Create a NXT wallet
Step 1: First thing you’ll need is an NXT wallet! head over to the NXT website, choose your Operative System and download the latest NXT software.
Step 2: Install the NXT software in your preferred language and folder. this process is quite fast.
Step 3:Open the NXT Server and create a new account. The NXT software will generate a seed that can be used as a backup to restore your account or to use it somewhere else. Make sure you save this key in a safe place before moving forward. The NXT setup will also prompt you for this seed when clicking next.
You are now the proud owner of an NXT account! There are many features to explore in the NXT platform such as creating your own profile, encrypted messaging, Asset creation and much more, our focus will be on how to mine NXT, but take a moment to explore the platform and see what it has to offer.
Part 2 - Fund your account, create a public key and start forging NXT
Step 4: Before we can start staking NXT we need… well we need NXT. Since this cryptocurrency works on a Proof of Stake protocol the more coins you have the more you’ll make. Grab your wallet address from the NXT server and send coins through your preferred exchange or using Shapeshift.
Now, once you fund your account, you will notice that you can’t forge NXT yet. There are three requirements to stake NXT:
- 1 - You must have at least 1000 NXT
- 2 - You have to wait 1400 blocks from your initial deposit to be able to stake NXT
- 3 - You must have public key
Since all we have to do to cover the first 2 requirements to stake NXT are some coins and a bit of patience, all we need now is a public address. We can create a public address by sending an outgoing transaction. You will pay 1 NXT for every transaction you make, so you can even send 1 NXT to create a public key (By doing this, you will only spend 1 NXT, which will be given to the miner who finds that block).
Step 5: Make an outgoing transaction to create a public key. Click Send NXT and fill in the information. Since we want to keep as much as NXT as we can we will send 1 NXT with 1 NXT fee to the exchange market account we used to fund our wallet.
Step 6: Send NXT and wait for the transaction to be confirmed. You need to have 1440 confirmations before you can start mining (both on the first incoming transaction and on the most recent outgoing transaction to create a public key)
Step 7: Once the outgoing transaction is confirmed click "Not Forging", input your Passphrase, click "Start Forging" and you're done!
If you’re unsure if this process was successful, just check the little red/green button on the upper left side of your NXT server:
In order to see how much NXT you have forged, you can go into the Account Ledger section, under Dashboard (We made 2 NXT so far):
Now you are officially mining NXT! That was easy, right? If you have some coins rotting somewhere on an exchange, why not put it to use and forge some more NXT? If you want to stop forging and withdraw your NXT you can do it at any time. You can also mine this crypto on any computer, old or new, including a mining rig, as long as you leave the NXT Server open at all times.
- What is Proof of Stake?
- What is Diamond Coin (DMD) and how to profit from its PoS and Masternodes?
- What is Delegated Proof-of-Stake (DPoS)?
- Delegated Byzantine Fault Tolerance (dBFT) & Generals’ Problem Explained
- What is a Decentralized Exchange
- How to install and use the PandaPool miner
- Proof of Work (PoW) vs. Proof of Stake