Bitcoin Mining
BITCOIN MINING
Bitcoin Mining
Bitcoin is the infamous “digital gold”. This cryptocurrency is ensured to have a huge price and it is the oldest lion in the jungle.
This guide is made specifically keeping in mind the Bitcoin mining for dummies. We are your friends and we’d want the best there is for you.
Normally, in case of the paper currency, the government decides to print and distribute the money to the people. However, in the case of the Bitcoin, there is no central government, so how do we get the new Bitcoins?
This is a question that almost all of us have thought about at some point. The answer is simple, we mine new bitcoins.
What is Bitcoin Mining?
In order to mine Bitcoin, we work on the blockchain! We (the miners!) use special bitcoin mining software to process the blockchain. Often, state of the art bitcoin mining hardware accompany this processing, making it faster.
We call this entire process the bitcoin mining.
Collectively, the working on the blockchain is just like an incentive to the people who are mining and a smart way to issue the cryptocurrency. That makes mining a two-in-one shot!
How to Get Started: Bitcoin Mining?
The Bitcoin mining actually consists of two basic activities:
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Validation
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Solution
This entire process follows decentralization; therefore millions of users all across the world ensure simultaneous processing on both of the activities.
Validation and Solution Explained
Take the blockchain as a huge jigsaw puzzle with a constant addition of new pieces. Now, there are two things that you could do on this puzzle. We either put the new pieces in their place, or we correct or verify if the old ones make any sense.
This is exactly how mining works. The miners either Validate the older blocks, or solve the newer ones. The validation also serves to block the attempts of re-spending the already spent coins. The blockchain on the other hand, displays the solved blocks over the network to assert the solution of those blocks.
This entire process requires specialized software (the bitcoin mining software) and rigs (the bitcoin mining hardware).
How Bitcoin Mining Works
The Process of Mining
The process of mining consists of 5 steps if we look at it systematically:
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The miner verifies if all the transactions are valid at his ledger. Therefore, the miner compares his ledger with all the other ledgers on the blockchain. Also, we often check the previous block to see if tampering is there in the ledger or not.
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The miner bundles the transactions into a block.
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The miner takes the header of the previous block and uses it as reference to the new block. This is to make sure that others can verify the new block through their own ledgers.
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Everyone solves the newest block. Proof of work comes into play at this stage.
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The solution is found eventually, and everyone receives their share from that block. Moreover, the local blockchain adds the new block and sends it over the network.
What Are the Requirements for Bitcoin Mining?
Although the bitcoin mining is an autonomous process, it is an expensive one. Therefore, you might want to look at these requirements before getting to some point in the mining business.
Bitcoin Mining Software
For me, setting up Bitcoin mining software is the first thing. Software like BFG Miner and CG miner etc. would allow you to access the blockchain with your network.
In addition to that you would also need some software that works with your bitcoin mining software. An example of it would be a wallet that would keep your hard-earned cryptocurrencies. So, we will advise you to set up your bitcoin mining software in the first place.
Bitcoin Mining Software
Bitcoin Mining Device
A mining device is the second thing that you’d be requiring. Obviously, without bitcoin mining hardware, how good will your mining thing is?
For the purpose of mining, three types of platforms are considered by people: the Personal Devices, GPU Rigs and ASICs.
Bitcoin Mining Hardware
A mining device is the second thing that you’d be requiring. Obviously, without bitcoin mining hardware, how good will your mining thing is?
For the purpose of mining, three types of platforms are considered by people: the Personal Devices, GPU Rigs and ASICs.
The first bitcoin mining hardware we’d be talking about is your personal devices. These are the desktops, Laptops, smartphone or any other device you could use as a node over the blockchain. These devices are already in your hands. However, the mining on these devices will leave you with an almost dead speed.
Therefore, by using the personal devices, a miner doesn’t get anywhere; EVEN FOR YEARS!
The second priority for a bitcoin mining hardware is the mining rig. These specifically made and designed GPU systems process the Blockchain at high speeds. The mining through a GPU bitcoin mining hardware is extremely easy and convenient. However, the downside of having this rig is that it is a lot costly, both to buy and maintain as compared to a personal device.
The third in the bitcoin mining hardware list is the ASICs. An ASIC or an Application Specific Integrated Circuit is a hardware that is built specifically for some application. The power and requirements of a mining rig (GPUs) and ASICs is comparable. The only difference between the two is that ASICs process a single application at a time, while the GPU can process multiple applications simultaneously.
Beginners Bitcoin Mining Hardware
Recommended Hardware
Here, we are looking forward to giving you the best mining experience. Therefore, to any person who is setting a foot in the mining business, we would recommend him to use GPU Bitcoin mining hardware. There are a number of reasons for doing so. We will point out a few here:
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GPU Rig has a good resale value
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GPU Rig is also a normal computer. They are not made as Application Specific devices that only mine.
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GPU rig is more energy efficient as compared to an ASIC
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It doesn’t produce irritating noise
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You can upgrade a GPU rig anytime
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Cool looks of a PC box can give your PC a Bitcoin-level swag
Huge Amounts of Money
In the present world, the money is the core component for everything. And to buy a good bitcoin mining hardware, you’ll probably need good money. So, make sure you have saved up a few bucks before you come into the mining business.
You’ll need cash to buy a bitcoin mining rig. Once you’ve done that, you’ll need more money to pay the bills (rigs drain electricity). Eventually, you’ll need even more to upgrade the rig so that your processing rate stays upto the mark with the market.
Ability of Patience
This one is for free folks! However, this one is the hardest to maintain. If you have spent money and making cryptos out of it, you’re still nowhere. You will probably have to hold your coins for some time if you want to profit from this business.
So, the fourth in our list is not a bitcoin mining hardware, nor some bitcoin mining software but your ability to be patient!
Precautions
Before starting-off with the Bitcoin mining, there’s a caution! There are some potential loopholes too that you need to look out for. Make sure you are careful regarding the following:
Precautions
When Mining Bitcoin
Get Guidance: Bitcoin Mining Calculator
Bitcoin is a potential well that could quench your money-thirst over time. But if you are not having a calculated approach, this well has the potential to devour you also. Therefore, make sure you use a bitcoin mining calculator. A bitcoin mining calculator will make sure that your business is profitable by estimating your budget for you. It will ask you for your costs and you can get the business profit/loss margin in seconds by looking at your processing power and expenses. Therefore, make a good use of the bitcoin mining calculator. Who knows, the area you are in might have so high prices that your business is a loss from the start?
There’re No Freebies
Bitcoin is a highly priced currency. It has a high value and everyone is crazy about it. So, keep in mind. There’s no such thing as free bitcoin mining. All the free bitcoin mining mails you’ll be having will be nothing more than a scam. Yes, there will be some faucets that will give you a Bitcoin after you complete some 100 million points. In the time you’ll be able to do that; you can get yourself a job and earn thrice as much. So, play the game like a smart guy and don’t fall for the free bitcoin giveaway or free bitcoin mining scams. Even if one of them is legit, a treasure chest in the mouth of a shark is no treasure at all!
Volatility
There’s a big factor of volatility when it comes to mining bitcoins. The prices rise and fall almost instantaneously sometimes. So, make sure you have an eye out for the rapid pits and grounds. If, you haven’t made a plan about that then this might be a big risk in your bitcoin mining game. Make sure you have something about it from the very start. I recommend holding the currency so that you can sell it for a decent price (sell only a part of it, so you don’t regret) later on!
Bitcoin mining business
I have given you a hack that I use for my bitcoin mining. That requires patience! We’ve already discussed how Bitcoin is a game of patience. So, I would just leave it here and move on.
If you have paid a considerate amount of attention to the above arguments, then you are ready to step inside the Bitcoin mining business. It is a pretty lavish field with lots of limelight. It can make or break you overnight, so make sure you go in with a plan.
Best of luck with mining, Bitcoiners!
