How do I start Bitcoin mining?

Before going into Bitcoin mining, one must have an idea of what Bitcoin is and how does it function?

Bitcoin is a cryptocurrency that uses a peer-to-peer network system. This implies that people who use Bitcoin are a part of the bank of Bitcoin. But unlike regular currency Bitcoins are not printed or distributed by a government. In fact, they don’t have a governing system that regulates the flow of this currency. This explains the fact why Bitcoins are not printed but mined. The process of mining a Bitcoin is done to verify other Bitcoin transactions that take place, and people are rewarded with Bitcoin for that verification process i.e. mining. In Bitcoin, the miners use special software to solve math problems and are rewarded a certain number of Bitcoins in exchange. This not only issues more currency but also acts as a catalyst for more people to mine. Since the process is done to verify Bitcoin transaction, more the number of miners more secure the network is. If the math problems are solved faster the Bitcoin network increases the difficulty of the math problem. When Bitcoins where first introduced, miners used their computers and processors to solve these problems. As time went by miners came to know that the graphics card in the computer (primarily used for gaming purposes) were a much better fit for mining. As they are faster and efficient, but they used more electricity and they generated a lot of heat. 

Now there are chips available that are designed and produced specifically for the process of mining. They are called as ASIC (Application Specific Integrated Circuit). They mine coins faster and use less power comparatively. Hence one needs proper Bitcoin mining hardware to do the same effectively. Now that the basic information is known, next one must know about the process of mining a coin and how it is done.

Bitcoin Mining:

It is clear that as time goes by the mining process becomes increasingly difficult and expensive as the hardware and chips that used to speed up the process of mining are costly. But there are a number of cloud-based mining services that are being used increasingly and with this new system; miners can lease the equipment and the gadgets that are required for mining. Here is the step by step process that explains how to get started with mining process. 

Bitcoin wallet:

It is common that one needs a wallet in which he can store the money that he has earned; this is same for the case of Bitcoins as well. Bitcoin wallets are digital wallets that are used to store Bitcoins. This wallet will also serve as your address book, and it can be used to receive the Bitcoins. This can also be used to buy, sell or transfer the Bitcoins to someone or transfer it to your bank and convert it into cash. If you already have wallets look for the wallet address. If you don’t have a wallet, there are a thousand different wallet that one can set-up online, but one can also store it in a cryptocurrencyexchange as that will allow you to convert the Bitcoin into any currency and store it in your bank account. The Bitcoin wallet Coinbase is one of the popular wallets as they also have provisions to store other cryptocurrencies. It is also recommended to use local wallets to store Bitcoins. It is also important that one secures the wallet as it is digital, one can gain access to your wallet and do as they please. You can have your wallet in an SD card to be secure.

Calculations:

Since it is a very difficult task and there are also a lot of risks involved, one must calculate if the mining process will actually be profitable for you. One of the ways to know the profitability is through the use of a Bitcoin mining calculator. This calculator can be used by proving the processing speed of your computer and it will tell if there is any chance of generating Bitcoins through your current mining system. One can always improve the mining rate by using software and mining device that are for this purpose. 

Ways to mine:

Before we go over the ways to mine, one must take into account the PC requirements. 

Graphics:

One can either use ASIC miners or cloud based services to do the same. One can also personally mine Bitcoins, using their computers. In early days people used their own computers to mine Bitcoins, that still can be done, but it would be ineffective if the person doesn’t have a powerful graphics card. 

Cooling system:

People who mine through their PC are advised to not use their PC for anything else but only for mining. The process of mining might not only slow down their computers but also it high cause a lot of problems related to over-heating, hence they are advised to either have a separate cooling system or a dedicated fan.

Mining pool:

With the wallet in hand one is almost ready to start mining, but to make Bitcoins one needs to join a mining pool. A mining pool is one wherein there is a group of miners who combine their computing power to extract Bitcoins. If one does it alone, it would be difficult to solve the problem hence it is advised to join a pool. In this mining pool, the algorithms that one must solve will be much easier and you get paid according to your contribution. 

Mining programme:

After all of this, you will need a mining client to run on your computer which will be able to control and monitor your mining. If you join a pool, they might have their own mining software. On the same hand, some don’t have such mining software. There are many mining software that is available such as BFGminer, BitMiner, BTCMiner etc. Most of them are available for free online and hence all you need is to download it and connect it with a power outlet and you are good to go.

This mining process not only issues more Bitcoins but also establishes a stable, safe and a secure network. One must also know that there is a limit on the number of Bitcoins that will ever exist. Only 21 million Bitcoins can be mined and currently, there is 12 million in circulation. This means there are 9 million that are waiting to be mined! So what are you waiting for? Just start digging!