So, you know a little bit about Bitcoins (also check this article if you are looking for vendors who accepts bitcoin), but how exactly are they “mined” into existence, and how can you get in on some of the action?
At its core, Bitcoin mining is simply the process of verifying other Bitcoin transactions by solving complicated mathematical hashing equations. The Bitcoin network compensates those who successfully validate a transaction with newly created Bitcoins as a reward. Given the collective number of miners around the globe; the sheer number of attempts at solving each transaction today; a Bitcoin reward, is given out around every 10 minutes.
Get started mining Bitcoins at home. Given below are a few simple steps you can do to start mining your first Bitcoin.
Step 1: Get a Bitcoin Mining System Set Up
Because the process of mining involves solving sophisticated mathematical equations that have a high computational overhead, using anything other than specialized mining equipment to mine Bitcoins will consume excess electricity and outweigh the benefits of any Bitcoins you acquire.
Nowadays, all serious mining is performed out on ASICs, or Application Specific Integrated Circuits. When deciding which ASIC to buy, it’s important to assess a couple of factors, including the hash rate, efficiency, and price point of the ASIC. Check out this comparison list of different ASIC’s before making a decision.
Step 2: Acquire a Bitcoin Wallet
Similar to how you need a wallet to store your bills; you need a digital Bitcoin wallet to store your Bitcoins. The bitcoin wallet is encrypted to protect the money. Wallets can be downloaded at sites like bitcoinwallet.com, or you can use a self-hosted wallet.
Step 3: Acquire Mining Software
You’ll also need mining software to control and monitor your mining rig. The type of software you get will depend on what kind of hardware you chose, but most mining programs are almost all open source and free. For a comparison of different mining software, check out this comparison list.
Step 4: Join a Mining Pool or Mine Alone
A mining pool is a group of Bitcoin miners that combines their computing power to make more Bitcoins, which are distributed among the group. (Check out this comparison list of mining groups).
The miners get smaller and easier algorithms to solve. The groups combined work can solve bigger and more complicated problems. It’s an easier way to make Bitcoins, but comes with less return than if you were mining alone.
Step 5: Start Mining
Now that you’re ready to go, you can begin mining right at home! Check in every so often to monitor your profitability and decide if you need to make any changes. Happy mining!