BitCoin Mining – A beginners guide to bitcoin mining.
Let’s summarize what we will learn today.
- We are going to learn how a bitcoin is “mined,”
- how we can begin mining own bitcoin,
- the most efficient software we can mine with,
- the most efficient hardware we can mine with,
- what mining pools are and where they are found
- and how to maximize our returns from mining.
How Does Mining Bitcoins Work?
Bitcoin mining is performing the necessary security measures for a transaction between two parties in the bitcoin public ledger. You are essentially verifying and providing the necessary security for the transaction. You are proving that the transaction is indeed valid. This is completed by executing SHA256 double round hash verifications. The rate at which you mine is understood as “hashes per second.”
Bitcoin mining works on an incentive model. Bitcoin miners are given the incentive to mine by earning bitcoin for putting up the necessary CPU necessary for the job. Bitcoin miners receive freshly mined bitcoin (fractional amounts) in addition to transaction fees paid by the parties transacting. The more CPU power you are capable of putting out based on your hardware resources, the larger the reward.
Mining Hardware is readily available on sites like Amazon. Make sure you check feedback and reviews before making a purchase. The top of the line miners at the moment are manufactured by Bitmain. The have created the Antminer series of ASIC mining hardware. These are not your cousin’s GPU mining rigs but dedicated miners that can deliver almost 14H and .36 bitcoins a month.
Due to the nature of the bitcoin protocol, bitcoin mining takes much more CPU power for a reasonable return now than it did it times past. There was a time when you could use your every day PC or Mac for mining profitably. At this stage of the game, you need chips specifically designed for the purpose of mining. Custom BTC ASIC chips are one hundred fold more powerful and efficient than legacy systems. If you decide to mine with legacy hardware, the truth is that you are going to end up consuming more in electricity than you are capable of earning via mining colocation. One provider of custom BTC ASIC chips is Avalon – they offer exceptional systems designed solely for mining purposes.
Cloud Mining Services
Another method to profit from bitcoin mining is by utilizing cloud mining pools. This relieves you of the burden of owning and housing hardware, but increases risk due to the same fact – not owning your own hardware means you need to trust the provider leasing and pooling their own hardware.
Here is a list of come cloud mining providers. Many scams exist so do not take the following as official endorsements:
Hashflare Review: Hashflare provides mining contracts; you buy into a mining pool. You will be paid out in bitcoin over the span of a year. Check out the calculator at https://hashflareprofit.com/ to see how profitable this can be for you.
Genesis Mining Review: Genesis is the number on provider in the mining space right now. They offer three different mining options and aren’t overpriced.
Hashing 24 Review: Hashing 24 offers high performance via their use of state of the art ASIC chips via Bitfury. Their facilities are located in the US and Europe. They have been offering cloud mining services since 2012.
Minex Review: Minex is unique in that they offer a simulated economy gaming platform. Clients can buy Cloudpacks which are in turn used to create a portfolio of lotteries, mining farms, real-life markets, casinos and many others.
Minergate Review: Minergate provides cloud mining, merged mining and pool mining.
Hashnet Review: Bitmain is the creator of the Antimer hardware and owns Hashnet. Hashnet has over 500 Antimer S7s which can be leased to end-users. Check out their website for current rates and stock availability.
Bitcoin Cloud Mining Review: While this company was once viable, the are currently sold out on all contracts.
NiceHash: NiceHash connects buyers and sellers via an online orderbook. Visit their page for updated rates.
Eobot Review: Eobot will allow an end-user to begin mining with a very small investment.
MineOnCloud Review: MineOnCloud offers about 30 TH/s total to end-users via their S4 and S5 Antiminers.
Comparing Bitcoin Mining Equipment
- AntiMiner S7
- AntiMiner S9
- AntMiner L3
Step 2 – Gain Access to Free Bitcoin Mining
If you, in contrary to using a pool, decide to begin mining with your own hardware resources, you will need the necessary software for the task. There are quite of programs available right now, but two reputable programs are BFGminer and CGminer.
If you have more of a novice, you can use programs that come with a graphic user interface, such as EasyMiner.
Check out more information mining software here.
Step 3 – Join a BTC Mining Pool
If you’re not in the position of mining coins profitably using your own hardware resources, why not join a pool? BTC pools are an aggregate of miners sharing resources to solve blocks and sharing the rewards split across the pool. Without the use of a pool, you may be stuck mining for years without earning meaningful profits. It makes more sense to share resources with a larger group and earn rewards as a party.
For a pure pool without centralization, check out p2pool.
The following are believed to be offering 100% block validation with BTC Core 0.95 or later.
- CK Pool
- Slush Pool
Step 4 – Open a BTC Wallet
This step in the process where you direct where profits are sent. A BTC wallet is very similar is a bank account or even an actual, physical wallet that you carry around with you and have sole access to.
- Software Wallets:
- Hardware Wallets:
- Local Bitcoins
- Buying Bitcoin Guide
Step 5 – Keep up With Bitcoin
Keeping track of bitcoin’s latest news and upsrWA can give you a better feel for where the market is going and where best to attribute your resources. As many of us in the space believe, bitcoin is here to stay. Keep hodling on and why not give mining a try?
Bitcoin Whitepaper: Brush up on your understanding of bitcoin by checking out Satoshi’s original whitepaper: bitcoin.org/bitcoin.pdf