If you want to mine bitcoin, here’s how to get started on it. But don’t be surprised that what you know about mining and the process involved is a different thing.
As it turns out, not a lot of people have knowledge around the digital assets industry. If you find yourself in this category, or just interested enough to learn more about the mining process and the time resources it requires, this guide will entertain you well.
What You Will Learn From This Guide:
- What is Bitcoin Mining?
- Bitcoin Mining process
- How long it takes to mine bitcoin
- How to start bitcoin mining
- How much it cost to mine Bitcoin?
- Other ways to mine bitcoin
- Recommended mining pools
- Best Bitcoin Mining Software
What is Bitcoin Mining?
Mining is a process of creating bitcoin, by adding transaction records to bitcoin electronic public ledger which records past transactions or blockchain. This process works through a distributed database spread across nodes of a peer to peer network record transactions using encryption to provide key security functions, which includes maintaining ownership and avoiding double spacing.
The transactions recorded in this peer to peer network will be transferred into a large general ledger, shared by all network users in the system.
- Shortly, Bitcoin mining is the validation process of the transactions made by Bitcoin.
- Bitcoin mining solves the double-spending issue (that has never been solved with the previous digital currencies originated from other sources).
Bitcoin Mining Process
Bitcoin mining is a complicated math-related process that includes several crucial elements and steps. Sometimes it’s better to deliver the process in a visually illustrated form:
For the transaction to happen we need to illustrate a peer (individual or a company) who desires to transfer Bitcoin.
- The payment in Bitcoin is made or received by someone for the service rendered or goods purchased.
- The transaction would require two ends and one more element to go. These two ends are the sender and the recipient, and the element in between is the network of users.
What happens once the payment is made?
- Network of users will cooperate with different mining rigs. The transaction needs to be recorded on a public ledger, but first it needs the validation from the miners.
- Machines (mining rigs) compete to arrange outstanding transactions in a block by solving a complicated mathematical problem.
- The first miner that will be able to verify and store every transaction distributed in the network, “wins.”
- Every ten minutes all the machines will receive the latest transaction using a cryptographic hash function.
- Machines will receive a number of bitcoin as a reward for each block completed successfully, meaning that the “winner” miner will receive a reward.
How Long Does it Take to Mine Bitcoin?
This question could have many answers, depending on the context.
- Mining process (to validate one transaction and create one block) takes around 10 minutes.
- At current difficulty rate, to mine one whole Bitcoin, it would take more than 1000 days for an Antminer S9 (Bitmain).
The time it will take an individual miner to mine one bitcoin, depends on the miner’s software and the competition involved.
Bitcoin was introduced to us in 2009. Back then, mining Bitcoin was a piece of cake. It could be done from a single PC, and the output was an entire Bitcoin per day (of course, in 2009 it was nothing much).
Through the years, Bitcoin gained value and popularity. Different companies and individuals all over the world decided to start mining. This fact increased the mining difficulty and overgrew the capacity of a PC.
Today, to mine Bitcoin, you must have a piece of specific mining equipment, designed to mine Bitcoin – ASIC miner. Originally, rewards from one block were 50 Bitcoins, due to the halvings of block rewards, today that number is 12.5 BTC. You can follow the timeline of Bitcoin block reward halving and see when’s the next one is coming.
How Can I Start Bitcoin Mining?
The cost of running a bitcoin mining farm is too high, so miners come together to form a pool. All that is needed is that you divide the reward for solving complex mathematical problems with other miners.
What is required in a mining pool is that you have to contribute 4% of the bulk of processing power, needed to mine a block, to earn 1 BTC? The time needed to mine bitcoin in a pool depends on the pool you choose and the equipment you use.
How Much Does it Cost to Mine Bitcoin?
Though it is expensive to mine bitcoin, the cost of mining varies from country to country, depended on the availability and cost of power. In the table below, I will show you the different amounts it takes to mine bitcoin in different countries.
The above table shows that Venezuela has the least cost of mining 1 BTC and South Korea the highest. Therefore it is easier to set up a mining farm in Venezuela.
Other Ways to Mine Bitcoin?
Mining is the process of creating bitcoin, this can be done in three legitimate ways. Here are some alternative ways to mine Bitcoin:
- Cloud mining
- Mining Apps
- Rig Mining
Pros: it is a good way to earn residual income, no mining equipment required, no knowledge required
Cons: not very profitable and it is affected by bearish market and subscription issues, high risks of scam and malicious activities
How it Works:
- Find a trusted company that owns a mining farm and offers cloud mining
- Compare their prices and offers to other companies’
- Sign up and create an account. Go through the identity verification process and make sure that your funds are safe and secure.
- Purchase a package that best suits you (packages differ in price and hashrates)
- The mined bitcoin will be sent to your chosen wallet from time to time, either daily or weekly.
- Follow the payouts, control your balance and transfer your funds to your digital wallet.
- The contract can continue for years.
Pros: it is very easy to start, it’s mobile and suits smartphones and tablets
Cons: there is a limited amount of bitcoin to be processed by my devices, not so profitable
How it Works:
- Download the app that does the mining for you. (The bitcoin miner is a window 10 app that is free to download and use. It works on Windows 10 PCs and tablets; it also works on Windows Phones).
- Enter your bitcoin wallet address in the Payout Address settings screen and press the Start button.
- The amount of bitcoin transactions processed depends on how powerful your device.
- Using Windows Phone will not earn as much bitcoin as Windows 10 computer.
Pros: it is expensive to start and maintain, consumes so much power
Cons: it is very lucrative
How it Works:
- You will need a substantial amount to start up and buy an application-specific integrated circuits (ASIC) hardware device, this is also known as a mining rig.
- This device is specifically designed to mine bitcoin and other coins. It is intended to run non-stop all day, every day.
Recommended Mining Pools
If you are looking to start mining, you need to join a mining pool, we have searched out the best mining programs you can join.
Pros: it is well secured and easy to use
Cons: it is expensive because you need different software to mine different coins
Slush Pool is the most mining program designed and brought into existence by SatoshiLab, a company with headquarters in the Czech Republic. This has been identified as the most stable mining pool.
How to start:
- To join this pool, you need the have the bitcoin mining device (ASIC)
- Then register an account with Slush Pool, which can be opened in a minute.
- Provide your user name, password and email, wait for a confirmation email
- Click on the verification link in the email, and your account is active.
Mining bitcoin on Slush Pool
- Choose the server address based on your geographical location
- Input your username and password.
- Choose one available mining software and enter this information showing to Slush Pool servers in it
- Input your public bitcoin address
All the earnings made from Slush Pool mining will be automatically transferred to your wallet address.
Pros: it uses GPU core and not the memory
Con: it is very complex to run
CGminer is a mining software that uses GPU core and graphic cards
How it Works:
- To set up, configure and mine with the CGminer download the latest version of cgminer from its Git Repository
- Unzip cgminer into your hard drive
- Navigate to the cgminer folder and open cgminer.exe
- Enter your pool address with the port when it asks you
- When it asks you for your worker, enter your username
- Enter your worker’s password when asked and click enter
- Once you have entered all the information correctly, it will start mining.
Best Bitcoin Mining Software
The well-known bitcoin mining software is the application-specific integrated circuits (ASIC) hardware device, this device is specially designed to mine bitcoin. They are very expensive, can go for thousands of dollars, also consume so much electricity, it takes like a year of continuous mining to start earning a profit.
The most popular type of ASIC is Bitmain with their Antminer miners, they easy to use, provide consumers with good support and written set-up guides.
When bitcoin was newly created, mining was not easy but presently with the advent of mining software, it is easier to mine bitcoin. The major issue of the high cost of electricity can be taken care of, if you are a beginner, you can start with cloud mining to build up capital and invest in the bigger method which is more expensive but lucrative. Using the higher method which is rig or pool mining enables you mine bitcoin faster and earn more.
What is bitcoin mining?
It is the process of creating bitcoin. Network of users, called miners compete with each other to validate and confirm a transaction that occurs every 10 minutes. The validated block gives out the rewards to miners
How can I start bitcoin mining?
There are several ways to start mining Bitcoin:
- Purchase mining equipment and start mining yourself
- Purchase a cloud mining contract and “rent” mining equipment from someone else
- Download mining apps on your phone or desktop
Which is the best software to use in mining bitcoin?
ASIC is recommended but you can do your own research to find out about other ones
How long will it take for me to start making money from bitcoin mining?
It depends on the method and the mining equipment you use.
Do I need my wallet address to mine bitcoin?