What is Bitcoin Mining?
Bitcoin mining is an energy-intensive process that allows you to create a new bitcoin by solving computational puzzles. These puzzles consist of mathematical problems, which are equipped with specialised chips. The bitcoin miner who solves the puzzle first is rewarded with a bitcoin. This mining confirms transactions on the cryptocurrency network making them trustworthy.
Bitcoin miners make the cryptocurrency network trustworthy by solving computational mathematic problems. They also verify its transaction information. We verify the Bitcoin transaction information to prevent double-spending. Bitcoin mining is essential to maintain the roster of transactions upon which Bitcoin is based. Mining has become very refined in the past years. Miners use complex machinery to increase the pace of mining operations. On the other side, miming is not eco-friendly which is making it controversial.
How to mine Bitcoin?
Bitcoin mining is one of the approaches you can take to make a tremendous profit in your investment. The profit is not guaranteed. The parameters like mining hardware, electric rate, mining difficulty and the price determine the rate of profit. Bitcoin mining might seem a little complicated but it is a great investment. Bitcoin mining requires sophisticated machinery which consumes a huge amount of electricity. Mining bitcoins can be very expensive for an individual, therefore, it is advised to be a part of a mining pool. You share the profits and the rewards together based on your investment. Let us see how to mine bitcoin step by step :
Step 1: Get the best Bitcoin Ming Hardware
Earlier, you could mine Bitcoin with your personal computer CPU or high-speed graphic cards but now you cannot do so. As we know that the use of sophisticated mining hardware is increasing tremendously, especially the application-specific integrated circuit (ASIC) chips, designed for Bitcoin mining.
So to get into Bitcoin mining you would have to buy this sophisticated hardware. They are available on Amazon and you can easily buy them. Some essential Bitcoin mining hardware is field-programmable gate array (FPGAs), graphic processing units (GPUs), and application-specific integrated circus (APICs). The FPGAs and GPUs help increase mining power as much as a hundred times, with less power usage. The ASICs provide a hundred times more hashing power which helps in enhancing mining output.
2: Join a Mining pool
Now that you have sophisticated hardware to mine digital gold. Now you should join one of the best mining pools after doing your research. This would allow you to have a better chance of earning a profit. You can also pool your resources with other miners in your mining pool.
In a Bitcoin mining pool, Bitcoin miners work together, pool their resources, share hashing powers, and distribute the rewards based on their contribution toward solving the problem. If you choose not to join a Bitcoin mining pool, you might not be able to mine a bitcoin for about a year. So it is better to share the work and split the reward.
Step 3: Download Bitcoin Mining software
Now that you have your Bitcoin mining hardware and you have joined a Bitcoin mining pool, you require a special program software used to mine bitcoins. There are several bitcoin mining programs out there. BFGminer and CGminer are command-line programs and are very popular. Also, keep in mind that some bitcoin mining pools will provide you with their own program.
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Step 4: Create a Bitcoin wallet
Bitcoins are received in Bitcoin wallets by using a unique address which only yours. You can use your existing Bitcoin wallet. If you do not have a Bitcoin wallet, you can easily create one. A bitcoin wallet is necessary to get the Bitcoins you mine. Blockchain.com is a pretty standard Bitcoin wallet that functions on several operating systems. You can easily get a Bitcoin wallet by downloading it from the internet to your computer.
It is always smart and efficient to secure your Bitcoin wallet from threats and hackers by keeping it offline and facilitating two-factor authentication.
Step 5: Start Mining
Now that you have your Bitcoin wallet set up, link it to your mining rig. It’s time for you to start mining, achieve rewards and make money. To start mining Bitcoins run a double SHA256 hash function verification process in order to validate the Bitcoin transactions. You must have a high hash rate ( measured in terms of the speed at hashes per second) to mine Bitcoin.
Bitcoin miners are rewarded by the Bitcoin network for their efforts in issuing Bitcoins to the individuals who took part in the contribution. As an individual, the computing power you contribute is reciprocated to you in terms of rewards.
Step 6: Stay up to date with Bitcoin mining news
Since you are mining Bitcoins, make sure you are well informed and up to date about the mining difficulty, price development, and other details to make sure your set-up remains profitable.
In the above article, we discussed what is Bitcoin mining and how to mine Bitcoin step by step. let me sum up the steps for you:
Step 1: Get the best Bitcoin mining hardware
Step 2: Join a Mining pool
Step 3: Download Bitcoin mining software
Step 4: Get a Bitcoin wallet
Step 5: Start Mining
Step 6: Stay well informed about Bitcoin.