How to Start Bitcoin Mining Today
What Does it Mean to Mine Bitcoin?
Mining is what releases new Bitcoin into the digital ecosystem. The flagship cryptocurrency takes a cue from the process of discovering and harvesting veins of gold from the earth in it's approach to virtual tender. But how do you mine something with a computer? By solving inconceivably difficult math equations, of course! You will be using specialized hardware and software to run SHA256 double round hash verification processes, which are incredibly complex systems that verify the existence and transaction of Bitcoin.
But why would you bother with such complex stuff if there weren't a reward? While the Bitcoin you mine aren't given directly to you, a portion of every Bitcoin successfully mined goes to those who helped to mine it. This is especially relevant when mining in pools - and you need to be mining in pools - because the amount of Bitcoin you personally receive will be directly affected by how much computing power you put into its mining.
First Off, Figure Out What Bitcoin is and What to Do with It
This point speaks for itself. If you aren't familiar with Bitcoin's history, the technology behind it, and how it can benefit you, DO NOT ATTEMPT TO MINE BITCOIN.
There are thousands of resources out there that will help you figure out this complex, nuanced, and groundbreaking piece of history, from YouTube videos down to asking a friend for advice. Study up on those and come back when you're ready.
Now that You Know What You're in for, Buy Some Hardware
Back when Bitcoin first started, it was easy enough to use a plain old computer to solve all those pesky math problems. Now that Bitcoin is a worldwide phenomenon, however, you're gonna need some specialized hardware to get the job done.
Machines with ASIC chips designed specifically for mining Bitcoin not only present an invaluable upgrade over your dusty old desktop, they also have a much better computing power to electricity consumption ratio, which is a much bigger deal than it appears at first. Do some research and make some price comparisons to figure out which machine is for you.
Next, You're Gonna Need Some Software
Now that you have the hardware, you'll need some software to run with it. This step is far more flexible than the last, as personal preference can take precedence over raw data. There are dozens of reputable mining programs out there, and you are encouraged to find one that appeals to you. Some of them even run on Android systems!
It's Dangerous to Go Alone
While the idea of striking out on your own like an old-time prospector has a certain charm to it, it is highly recommended to join a mining pool. Mining pools are large groups of fellow miners who actively take on mining bits of the blockchain together.
Whenever your pool finishes the block it's working on, the reward will be shared between you. Does sharing suck? Yes, but so does mining for months on end alone and never successfully solving a single block, and thus never receiving any compensation.
Where Do I Put All this Shiny New Bitcoin?
Anyone who has dabbled in Bitcoin before attempting to mine their own will already have this step covered. A Bitcoin wallet is a virtual vault that keeps track of the Bitcoins you send and receive, and thinking of it as a fancy computer wallet isn't far from the mark.
Wallets exist in various different forms, and some exchanges that allow you to buy and sell Bitcoin will have their proprietary wallets. Once again, do your research to decide which program you will entrust your loot to.
Speaking of Buying and Selling Bitcoin...
Turning around and selling the Bitcoin you receive from successful mining has proven to be profitable for many people. Finding reputable exchanges like Coinbase to enact trades with other crypto enthusiasts is a must for anyone looking to actually do anything with the Bitcoin gained from mining.
Mining Bitcoin can be a tricky business. Remember that line about electricity consumption? You'll need to be very wary about how much energy your new fancy machines are drawing from your city's power grid. Figure out how much the price per watt of electricity is in your district or city, and then use that information on a mining efficiency calculator like the one on CryptoCompare.com.
Mining for profit may present a challenge at times, but without it, Bitcoin would cease to exist entirely. For the adventurous and the crypto-obsessed, Bitcoin mining can prove to be a rewarding, satisfying venture.
Find out where to get next with the best places to learn about Bitcoin