What is Bitcoin Mining?
Bitcoin mining is the process of authenticating and legitimizing bitcoin transactions — sort of like being a bitcoin bank teller. Every time a new transaction comes along, it needs to be added to the final bitcoin ledger or blockchain, which records every bitcoin exchange.
Having said that, here are the different steps it takes to Mine Bitcoin
1. Understand the amount of effort involved
Mining for bitcoins is not a casual undertaking. The idea seems simple enough, but the practice of bitcoin mining takes a lot of work. You need to invest a significant amount of money when first starting up, be willing to upgrade your equipment regularly, and constantly monitor the conditions of the bitcoin market — and that’s just the beginning. To earn any appreciable money while mining bitcoins, you have to work at it. Additionally, earning money via bitcoin is more difficult than ever now that the monetary reward for mining bitcoins has been essentially cut in half, a process that’s supposed to occur every four years.
2. Choose your hardware
The heart of bitcoin mining is the bitcoin miner or mining rig, which is essentially a separate computer that handles all the mining work. If you have the tech skills, you may also be able to build your own. The costs vary, but the best miners tend to be priced above $500, sometimes well above that. Returns vary greatly, but with a good-to-average miner and the right setup, you could be looking at around a $100 profit in a robust month — that should give you an idea of how long it will take to recoup the initial cost.
3. Choose your wallet
Unless you already have one, you will also need a wallet to help manage your bitcoin transactions. There are an assortment of bitcoin wallets, both online and software-based. Examples of such wallet are Copay and Breadwallet.
4. Download the software
Now you need to pick out your mining software, or a client that allows you to control the mining process and check out the specs on your mining rig to make sure everything is optimal. If you don’t have much experience with basic command interfaces, then GUIMiner is probably your best bet, as it offers an easily-digestible interface. If you have a Mac, you may want to try out MacMiner. For those with a bit more experience, 50Miner is an excellent choice. Many people also prefer GitHub’s BFGMiner.
5. Join a mining pool (If possible)
Mining pools are communities of bitcoin miners who work together and share the reward. The benefits to a reliable pool can be considerable. They typically make it quicker to find blocks, which means payouts occur more regularly and everyone gets more money.
6. Always update
You need to consistently update your software, wallet, and yes, even your hardware, if you want to keep making money. Stay on top of any important news or developments, watch how bitcoins compare to other currencies and cryptocurrencies, by subscribing to our news letter and don’t be afraid to change.
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