January 6th, 2018
If you’ve heard of Bitcoin, chances are that you have heard of “mining Bitcoin” as well. Even if you haven’t heard of Bitcoin or the term mining, they are important terms to know and understand if you ever plan on using them. Thanks to their rise in value, Bitcoin is becoming more and more popular as a virtual currency for people all over the world. Basically, Bitcoin is a digital currency that is based off of peer to peer transactions and review without having to deal with a “middle man” or a central bank. Mining Bitcoin is the process of verifying other Bitcoin transactions. Mining is what keeps Bitcoin a reliable and trustworthy digital currency, while still remaining decentralized. Below you will find out more information about the mining process and how to mine Bitcoin.
Before you begin downloading programs and software to begin mining for Bitcoin, you need a place to send, store, and receive those bitcoins. This is where the Bitcoin wallet comes to play. These digital wallets are used to store Bitcoin and are correctly encrypted to protect your coins. There are different types of wallets. so make sure to choose a digital wallet that suits your needs. Most Bitcoin users will recommend a local wallet for security reasons. Local wallets require verifying the blockchain. You can also download wallet apps to your smartphone or tablet for use on the go.
An important thing to know about wallets is that there is no ownership of wallets, which means if not properly secured anyone can get access to your wallet. We recommend enabling a two-factor authentication and store your wallet in a PC or other device that does not have internet access. You can also store your wallet on a SD card to keep it safe.
When Bitcoin first started, people were able to mine using normal CPU. However, even though it is still possible to mine using CPU, the returns make this method impractical. Miners will end up spending more on electricity alone, then they will for earning bitcoins through mining. Nowadays, there are custom hardware devices available that allow for better processing with similar power usage. A Bitcoin mining machine can cost upwards of few hundred dollars and even a few thousand dollars, depending on the operations it can perform per second.
Mining programs are available online for free. There are different mining programs available based off of the type of hardware you are using. Mining programs run in command line and need a batch file to start correctly when you connect to the pool. Two of the most popular mining programs are:
If you are mining in a pool, be sure to check the pool’s Help section for any specific details about the mining program. Solo miners can connect to the mining program using their personal wallet, this way anything that you earn will be automatically deposited into your Bitcoin wallet.
Once you have downloaded the appropriate mining program, you can start your mining operation. When the miner starts working on your computer it will slow down to a crawl. You will want to keep an eye on your device’s temperature as well. Mining programs have a tendency to push hardware to its limits, especially if the hardware was not designed for mining.
When you decide to mine there are two different options to choose from, both of which have pros and cons. These are:
Join an already established pool of miners – The pool was created to share resources and split rewards, which can lead to faster returns. Some pools will also charge a small fee on your earnings.
Strike out on your own – Mining alone can be hard to get started (Bitcoin is highly competitive) but what you do mine, you get to keep for yourself.
If you’re not sure what the best option for you is,run the numbers. After you have mined for a certain period of time, check your figures and see where you’re making the most profit. You can do this by checking how much you have earned over the last few days and compare it to the money it takes to run your system during that period of time.