For the past decade, Bitcoin has attracted the attention of many investors and financial institutions. People can choose to earn Bitcoin through Bitcoin mining instead of buying Bitcoin. Learn about Bitcoin mining, and how you can earn Bitcoin by mining.
ou’ve seen the news and seen the market rate. Today Bitcoin is considered the best performing asset, and you are ready to stake your claim in the market. But where do you start? What do you need? You could just buy the coin, but the rate is sky high, there must be another way and there is- mining.
What Is mining you ask? Well, read our short guide below to give you the rundown on how to mine bitcoin.
Bitcoin mining, simply put, is the foundation of the entire bitcoin network. It is the action that provides the security of the network and allows for the confirmation of all bitcoin transactions and by mining, you can earn cryptocurrency without having to put down any money for it.
Miners successfully mine for bitcoin by solving a computational problem, allowing them to chain together “blocks,” the units which bitcoins are mined in. When miners are successful in solving these complex problems, they are rewarded with transaction fees and newly created bitcoins.
Mining does two key things, it allows for the regulated creation of new bitcoins and it secures the network, safely confirming transactions.
Unlike a bank, bitcoin can’t be issued at any time or based on economic analysis of what may support a national or global economy. Bitcoin rewards miners about every ten minutes and the rate are set in code. No system cheating, and no abuse, and per the bitcoin protocol, bitcoin is even capped at 21 million BTC.
A transaction can only be considered secure and complete once it is included in a block. When this happens, it is officially embedded into Bitcoin’s blockchain.
Generally, there are different numbers of confirmations needed for different tiers of transactions.
$1,000 – 1 Confirmation.
$1,000 - $10,000 – 3 Confirmations
$10,000 - $1,000,000 – 6 Confirmations.
Because of the process of mining, the Bitcoin network is secured, preventing unwanted attacks, alterations, or terminations of transactions.
The more miners that mine, the more secure the network is!
To be frank and to the point, you probably should not be mining on your own in 2020. Most mining requires specialized hardware, huge energy supplies, and loads of space to store the equipment. Today, It is simply not worth it. That being said, if you have the resources to do it and you are determined, keep reading on!
1. First, you probably want to get your hands on an ASIC miner, you can’t do anything with it. These are specialized computing devices that were created just for mining. In the early days, you could mine with just a powerful CPU and GPU, but this is no longer the case. Without the ASIC miner, you won’t make any profit and it’ll just cost you in energy bills.
You could solo mine, but this is probably not going to work on your standard computer and your competition is pooling as well, don’t forget. When you join a pool, you share your hash rate, (the Hash Rate is the speed at which a compute is completing an operation in the Bitcoin code) your reward is the percent of hash rate you contributed to the pool.
Example: 12.5 bitcoin is the current block reward, if you contributed 5% (which is quite high) you would receive .625 bitcoins.
There are options in cloud mining as well, which is the practice of renting mining hardware and having someone else do the mining for you. However, do your research on this as cloud mining is not done well across the board. Digitaltrends recommended Genesis Mining in their article on bitcoin mining stating they were the “largest and most reputable of the bunch.”
There are a bunch of options for you to choose from, for all platforms (yes, you too Mac). Some popular options include CGminer and BFGminer. You’ll also need a “wallet” and an address.
Bitcoins are sent to your Bitcoin wallet using a unique address that only belongs to you. The most important step in setting up the software and your wallet is securing it from potential threats by enabling two-factor authentication or keeping it on an offline computer that doesn’t have access to the internet.
It goes without saying that the best financial experts always stay informed about global events and market trends. Like the dollar today, it is important to understand how events affect BTC and other cryptocurrencies. Things like government law changes and criminal activity can change confidence in the market and affect the stability and value of bitcoin.
To keep up-to-date, we recommend following different news sites such as CoinDesk, Cointelegraph, CCN, and of course, keep following us at ReadBTC.
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