Bitcoin Mining Guide

If you’re new to the world of Bitcoin, then you may not know so much about how to get your hands on the cryptocurrency. Obviously, you do have the option of simply purchasing some from an online exchange. However, should you want to participate in mining Bitcoin, you’ll find that it offers its own appeal.

But it’s not something that you can just walk into and begin doing. You’ll need a bit of prior information about how it all works and what you need to do to partake in Bitcoin mining. That’s why we have brought together this instructive guide for you to follow. Here, we’ll inform you on everything that you need to know so that you can jump in and start mining and generating Bitcoin! So, read on to find out how this process works, and start crafting your own Bitcoin now!

When you hear the word “mining,” it’s common to imagine dirt-covered men wearing hard helmets, chiseling away at the side of rocks to get to the precious materials underneath. Of course, mining Bitcoin has very little to do with grabbing a pickaxe and working away at a rock for several hours.

Bitcoin works on a peer-to-peer network. This basically means that everyone who uses this cryptocurrency has a small fragment of the “bank” of Bitcoin. Now, of course, Bitcoin is decentralized, so there isn’t actually a physical bank. All of its users make up this virtual bank. Yet the Bitcoin itself has to come from somewhere, right? And this is where mining comes into effect.

Additionally, miners are required to be able to approve Bitcoin transactions. Therefore, with more people mining, the Bitcoin network improves in security.

The Bitcoin network itself will automatically change the difficulty of the math problems, depending upon how quickly these problems are being solved. When Bitcoin was first launched, miners solved the math problems by using the processors on their home computers. It didn’t take long for miners to discover that graphics cards that are usually utilized for gaming are much better suited towards mining Bitcoin than processors, though. They’re faster, although they use a lot more electricity and generate far more heat.

With this being the case, when the first commercial Bitcoin mining products were released, they included a special chip. These were specifically set up for mining Bitcoin – providing both a speedy service and less extreme usage of electricity.

It didn’t take long for Bitcoin to become a popular cryptocurrency, and in the same respect, it didn’t take long for Bitcoin mining to become popular. Yet with more people involving themselves in mining, it became increasingly difficult for individual miners to solve the math problems. This is where pool mining came into play – something that remains popular and necessary in itself to this day.

Pool mining basically sees groups of miners unite their mining strengths together so that they can find solutions to the math problems a lot faster and easier. The people in these mining pools are rewarded with Bitcoin that is proportionate to the amount of work that they put into the mining itself. “Work” refers to how much power their computer(s) contributes towards solving the math problems.

Mining is a specifically important part of the Bitcoin cryptocurrency. It ensures fairness, while also keeping the Bitcoin network stable, safe, and secure. And with miners uniting to participate in pool mining of the cryptocurrency, more of the cryptocurrency works its way into the system.

Acquire Your Mining Hardware

There are several things that you will need to do in order to involve yourself in mining Bitcoin. The first and most important item that you will need is specific Bitcoin mining hardware. As mentioned earlier, when the cryptocurrency first became available, it was possible to mine the coins from a home PC. Today, though, this is not something that such computers have the ability to do.

Therefore, it’s advisable to acquire something known as a Bitcoin ASIC (Application-Specific Integrated Circuit Chip). They provide up to 100 times the performance capabilities of older systems and have come to be a prime focus of the Bitcoin mining industry. Such chips can be found on popular e-commerce websites, such as Amazon. Therefore, they’re not difficult to get your hands on.

If you decide to mine with anything less than an ASIC, the strong likelihood is that you will consume much more electricity than you can cover by earning Bitcoin. If you’d like a specific brand of ASIC, check out those offered by companies like Avalon for a great system.

The alternative to having your own ASIC is to buy into Bitcoin cloud mining contracts instead. With these, the process of mining is significantly simplified, yet it poses much more of a risk, as you are not the one who has control of the hardware itself. So, while cloud mining is a possibility, it’s advisable to be quite wary of participating in such. Bitcoin cloud mining scams have been a frequent issue with this particular method of mining over the years of its activity.

Download Bitcoin Mining Software for Free

Hardware is only part of the necessary items that you need to be able to mine Bitcoin. You’ll also need software that is able to do the mining on your computer. In the beginning, Bitcoin mining was only possible through a single software. However, with the increase in the popularity of the cryptocurrency, there are numerous programs that you can use to be able to mine them.

Two of the most popular mining programs are called CGminer and BFGminer. These are both command line programs. On the other hand, you could utilize a software called EasyMiner, which is basically like a “click and go” mining program. This is available for Windows, Linux, and Android operating systems and is quite considerably easier to use for newbies. Generally speaking, all Bitcoin mining software should be free to download to your computer, and once you install it, it should be instantly ready for use.

Possessing both the hardware and software that is necessary for mining Bitcoin is just the beginning. After you have successfully installed both, you need to join up with a Bitcoin mining pool. As explained earlier, this will allow you to unite your computer’s power with that of several others in order to solve the math problems swiftly and obtain your Bitcoin as a proportional reward.

This is a highly recommended way of mining these days, because operating as an individual may see you mine away for months and years on end with very little to show for it. In this respect, it’s much easier to split the work between multiple miners and then share the rewards between all of you.

Several mining pools exist online, although there are some that are more popular than others. You could check out mining pools like p2pool, CK Pool, and Slush Pool, which all have free downloadable software to allow you to link up with their mining pools.

The only thing left for you to do is set up your own Bitcoin wallet, which is where your mined coins will be sent to. Alternatively, you can use an existing wallet, if you should already have one. As with the mining pools, there are various options available for you to use as far as opening a wallet is concerned.

The Bitcoin that you mine will be sent to your chosen wallet via its unique address. It’s advisable to set up your Bitcoin wallet and secure it from any kind of threats by enabling two-factor authentication. Alternatively, you can keep it on an offline computer, or even on a USB stick, for example. This way, your Bitcoin is sent to the wallet and not stored on a computer that is connected to the internet. Upon choosing a wallet, you simply need to download a software client to your computer, and that’s where your mined coins will be sent to.

Once everything has been set up, you simply need to sit back and allow the mining to take place. Your Bitcoin will begin to appear in your wallet, and then you can utilize those as you wish.

Many miners opt to sell the Bitcoin that they have mined, which you will need an exchange for. We also have a guide that can take you through the steps of finding a good online exchange and how to use them successfully. Buying and selling of Bitcoin via an exchange is an easy enough process and allows you to benefit from the changes in the value of the cryptocurrency.

In this respect, it’s also quite important to stay informed on the latest Bitcoin news. Therefore, you will always know when the price is on the rise, when it’s starting to fall, and other important information relating to it. If you’re fully informed, you can choose when to buy and sell Bitcoin via your chosen exchange.

The answer to this question is not something so simple. Buying coins from a Bitcoin exchange is, of course, a simpler way to get your hands on the cryptocurrency. However, mining coins can bolster a balance that you already have and doesn’t require you to exchange fiat currency or other cryptocurrencies for Bitcoin.

Naturally, with mining, you won’t see your wallet become full to overflowing in one day, so there is some time that you’ll need to wait to be able to amass the coins. Yet when you sell them on an exchange afterwards, you can benefit from the different price values of Bitcoin.

Mining is potentially something that you may want to consider doing alongside purchasing coins. In this instance, you will hold a certain number of purchased Bitcoin and will continue mining them so as to bring more coins into circulation, while increasing your own balance of them. Therefore, it really depends upon your own personal preference as to if you opt to involve yourself in mining for the cryptocurrency.