Cryptocurrency

What is Bitcoin Mining?

Bitcoin

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If you are interested in Bitcoin, I am sure you have already heard about Bitcoin Mining. If you just know this word and have no idea what it exactly, is, this article will help you.

Before I talk about Bitcoin, let me ask you a question.

  • Where do bitcoins come from?
  • How do we know that person A has sent a certain amount of bitcoin to person B?
  • How do we know that the transactions are accurate?

The only answer to these question is Mining.

In a current currency system, the government decides when to print and distribute money. But Bitcoin does not have any central agency to control or govern. Bitcoin uses mining for all these things.

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What is Bitcoin Mining?

Mining is the process of creating fresh units of the digital currency. There is only a limited amount of bitcoin (21 million) and the more you take out, the more difficult it is to find more.

Every time, there is a new Bitcoin transaction, Bitcoin Mining computers update the current block of transaction block chain. While doing this, they also collect a miner’s fee contained in each transaction. This is how Bitcoin minors receive the incentive.

For every block on Bitcoin transactions generated, miner computers compete to solve a very ‘difficult’ math problem. The winning miner is awarded newly mined bitcoins.

Bitcoin Mining requires a powerful computer and a special software program to solve complicated mathematical problems.

Before becoming a Bitcoin miner, you must know the energy consumption and hash rate. These play important role in the profitability of bitcoin mining. If you are able to balance this, you can think of becoming Bitcoin miner. You may need to purchase mining hardware. The investment and energy cost should not overtake the bitcoins you earn through mining.

How To Start Bitcoin Mining

To become the Bitcoin miner, you need to purchase bitcoin mining hardware. In early days of Bitcoin, it was easy to mine Bitcoin with your normal computer. But now it is not possible. Nowadays all serious Bitcoin mining is performed on ASICs. It is recommended to mine Bitcoin with good bitcoin mining hardware built specifically for that purpose. There are few good Bitcoin mining hardware you can buy to start mining at home.

Here are the good Bitcoin hardware miners

Once you have purchased a bitcoin mining hardware, you need to download a special software for Bitcoin MiningCGminer and BFGminer are two most used programs for mining Bitcoins. These two tools are command line programs. If you want a GUI tool, you can also use EasyMiner.

Bitcoin mining to earn Bitcoin is now harder and will become even harder in coming months and years. You might mine bitcoins for over a year and never earn any bitcoins. So, Bitcoin mining Pool has become the new way.

Bitcoin Mining Pools 

You can join the mining pools where a group of people cooperate for mining and share the block rewards in proportion to their contributed mining power.If you do not want to invest hugely in Bitcoin mining hardware, you can try Bitcoin Mining services.

The p2pool is the most recommended Bitcoin mining pool. Other Bitcoin Mining pools include:

Cloud Mining

You can also purchase Bitcoin cloud mining contracts. It simplifies the process but risky as you do not control the actual physical hardware. Here are some known Bitcoin cloud mining services. But be sure before you trust. There have been a tremendous amount of Bitcoin cloud mining scams. I have not tried any of these but listed here based on reviews.

  • Hashflare
  • Minex
  • Genesis Mining
  • Hashing 24
  • Hashnest

Final Words

I hope now you know what is Bitcoin mining and how to become a miner. Anyone can become Bitcoin miner to earn Bitcoins. However, Bitcoin mining has become hard and needs investment in powerful hardware. It is being done by dedicated professionals with specialized hardware, big data centers, and cheap electricity. It is not profitable for a normal person even with good configuration system.

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