A mining calculator is a tool with the help which miners can calculate possible profit and the return on investment. How mining calculator works? Basically, to understand how the calculator works it is crucial to have an idea of how mining works in general.
Mining is the process of using the computing power of the computer to support the functionality of blockchain and the emission of cryptocurrency. Cryptocurrency is not miserable coins on the web that cost a lot, behind most popular coins stands the blockchain with unique functionality. The blockchain can be used for business or legal purposes, but to ensure enough computing power for the viability of the system, mining was created. Mining is the process of sharing or simply ranting computing power to the blockchain in exchange for awards (cryptocurrency). The size of the award depends on the computing power and is calculated in MH (mega hashes per second). The more computing power you have the more MH per second you can mine so that the basic way of calculation of returning of an investment in mining. Knowing the price of the cryptocurrency on the market, and knowing the outcome of all available computing power it is possible to calculate how much this will cost.
So answering the question of how mining calculator works – it multiple the computing power of mining farm by the projected price of the cryptocurrency on a certain period. Also, different calculators have different functionality and are used for different purposes. Because the effectiveness of the mining depends on the price and stability of coin mined, it’s important to cope with risk and compare the profitability of different options. Today people mostly use Etherium and Bitcoin for mining, but who knows, maybe new coins with even higher returns will appear soon?