Is it safe to mine bitcoins?
So you want to learn how to get mine bitcoin, correct? That's a good thing, because you've found the perfect starting point!
In the following guide, You will find out everything you need to know about Bitcoin mining. Of course, if you want to do this, you will already know the basics of Bitcoin's amazing disruptive technological and financial breakthrough!
If you've ever wondered where bitcoins come from, how to keep transactions safeand consistentlyin the Bitcoin network, or How long does it take to mine a bitcoin?, This guide should be of great help to you.
So grab your shovel and headlamp and let's take it down! Just kidding. I'm sure you know we're not really mining, right?
Note: You can also buy some bitcoins from a trustworthy exchange. If you're interested, check this out Coinabase or Binance!
A quick explanation of how to mine bitcoin
Before I teach you how to mine Bitcoin, I should first briefly explain what we mean when we talk about it Bitcoin mining.
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As you most likely already know, Bitcoin is a blockchain-based cryptocurrency. It works in much the same way as a bank's ledger (record of transactions). However, banks need you to trust them. Bitcoin is different. All you have to do is trust the code that created the network and its rules. It is no accident that Bitcoin was created in the immediate aftermath of the 2008 global financial crisis. It was designed as trustless money!
But wait a minute, if you don't have to trust a bank, how do you know people aren't cheating on the network? How do you know that each bitcoin can only be spent once?
The network is secured by specialized computer units so-called miners, who are spread over a large number of unique units. When you send a transaction to the Bitcoin blockchain, these miners need to verify that you have the bitcoin required to send it and that various other rules are being followed.
Transactions are grouped into blocks and then a string must be guessed by the miners on the network. These characters are known as the “hash” of the block. Each block contains the hash of the previous block as well as a new hash that needs to be guessed.
Once the miner has guessed correctly, he can add the block to the chain. This presumption process is called "Proof of work”. This is the most important security feature that you will need in order to mine Bitcoin.
By inserting the hash of the previous block, the other miners in the network can check whether the transactions contained in a block were made after those in the previous blocks. This collection of blocks in the sequence is called the blockchain. Easy right?
Block rewards and miner's fees
Miners unlock new bitcoin when they add a block to the blockchain. They also get the reward for the fees that users put in their transactions. Hence, it pays to spend money on the electricity and computer systems needed to extract it. If each bitcoin is worth thousands of dollars, it is a very powerful incentive indeed!
The three ways
Ok, now that you know exactly why you want to mine bitcoin, let's get to the point you sure all came here for - learn how to mine bitcoin! There are Three ways to start mining bitcoin:
(not recommended for beginners or hobby miners)
|Using Cloud Mining Services(not recommended for anyone!)|
I will take a closer look at these and then explain exactly how bitcoins are mined!
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Bitcoin mining as part of a larger pool of miners The easiest, as fast as possible, and the most reliable way to ensure your bitcoin mining operation is profitable. You will team up with other miners to share the rewards.
When you sign up for a pool, you (and everyone else in the pool) consent Share any bitcoin you have rewarded with the other pool members. This means that you will receive small payments on a regular basis.
however, Not all pools are created equal. There are many things that you need to consider when choosing a pool. You are:
- The size of the pool.
- The Minimum payments.
- The fees charged by the pool.
Size of the pool
The size of the pool This is an important thing to think about when mining as part of a pool, as the chances of a reward increase as more people mine in the pool. However, since the rewards are shared among multiple users, they are smaller too!
Largest mining basin | Source: Blockchain
Joining large cryptocurrency mining pools is usually a convenient option for beginners to mine bitcoin. That's because they will beget a lot of payments and won't spend much on electricity Waiting for the next fraction of a Bitcoin to be rewarded.
The minimum payment
Another important point is the minimum payment you can withdraw using the pool. By minimum payment, I mean the smallest amount of bitcoin that you can take out of the pool. If you are new to cryptocurrency mining, you probably want to join a pool as low as possible a minimum payment. This means you can be sure that everything is working as it should in less time.
You don't want to consume a lot of expensive electricity accumulating a few hundred dollars worth of bitcoin only to find the pool disappears or something very bad happens on cryptocurrency news, causing the price of bitcoin to suddenly drop!
There is a fee for each pool to organize everything for you. The fee is usually a percentage of your profit. It is always taken from the Bitcoin, which you mine automatically, so you don't have to worry about paying for it yourself!
Of course we don't have to tell you The lower the fee you pay, the better for your profitability. It's just obvious!
Typical fees are between 1% and around 3%. There are also pools with 0% mining fees. However, their reliability remains to be seen. If you don't know a person who you trust and who recommends a free mining pool, you'd better go with someone who has made a name for themselves.
Running a pool is expensive. There are many computer systems and data center space that must be paid for. It's a full time job for some employees. Fees of around 1% are fair. However, you should probably avoid pools with fees above 3%.
When it comes to how to mine bitcoin, Mining alone is possible. It probably seems like the best idea. Surely you shouldn't have to share your mining rewards with thousands of other people? Also, paying 1% on everything you make can get expensive if you plan to mine it for long periods of time.
You're right. Type of.
Solo Bitcoin Mining means that You don't have to share your winnings with a large group of other people. However, it also means you won't be able to share the profits of thousands of other miners, either. You're only paid out if you're the miner solving the hash.
This means that not only are you competing with every other solo miner on the planet, but every pool as well. Even if you have more processing power than any single miner in any pool, do you have more than the entire pool combined? Probably (definitely) not!
That said, if you're a multimillionaire, you could build a profitable solo mining operation. You would have to buy hundreds (if not thousands) of ASICs (application-specific circuit chips). The best mining chips will cost you between $ 1,000 and $ 1,500 to spend.
Problems for Solo Bitcoin Miners
It takes hundreds of computer chips to run quite a lot of electricity. The best way to mine Bitcoin right now is with the help of the DragonMint T1 miner. This runs on 1,600W. Multiply that by 100, for example, and you'll see a huge electric bill every month!
To make matters worse, hundreds of computer chips are running hot. Make sure to use a laptop on your knee for a couple of hours. They can get pretty warm, right? The average laptop runs on around 60W. This is About 26 times less power than a single DragonMint unit. Now imagine 100 of these bad guys running in a small room at the same time. You're going to need serious ventilation! That means more power consumption!
One of the problems that will arise on your way to learning how to mine bitcoin is the noise. With the constant buzz of hundreds of computer components and industrial-scale 24-hour cooling systems, a solo professional mining operation gets loud as hell!
If you look at where most of the solo miners decided to set up their operations, you can see a pattern. You like cool climate (less ventilation required), cheap electricity (The electricity costs devour less profits) and remote control, rural locations (There is room for extensive operations outside of people who might complain about the noise.) The top bitcoin mining locations today are Iceland, rural Canada, and Russia.
You might be wondering why someone bothered to spend the huge sums of money on expensive mining equipment to rent to someone else. The reason is simple. You want guarantee profits on your investment and do not allow them to be influenced by Bitcoin price fluctuations.
The concept seems strange, but some people are choosing how to mine Bitcoin this way. Let's look at some of the pros and cons of cloud mining.
Benefits of cloud mining
✓ You are not responsible for the equipment. Often times, when something breaks, you don't need to replace or repair it (but always read the fine print on a cloud mining contract. The company may ask you to pay for any damage to the equipment!).
✓ Bitcoin mining allows you to make money without spending thousands or millions on mining equipment. It also means you don't have to deal with the heat or noise in your own home or other potential locations.
✓ The final benefit is that You Don't Need To Know About Cryptocurrency Mining. If you're looking to tarnish mine, you probably don't need this guide to mining bitcoin at all!
Disadvantages of cloud mining
✗ You pay money in advance. If the price of Bitcoin drops significantly, you can get stuck in a contract and mine at a loss until the price rises again (if it ever does). You take all the risk as the cloud mining operator is guaranteed a profit.
✗ You cannot update or change the mining software or the hardware used by the cloud mining provider.
✗ are cloud mining companies Targets for hackers. In July 2017, Genesis Mining was hacked. Bitcoin was transferred from the company's hot wallet to an external wallet.
Personal opinion: If you want to purchase cryptocurrency but don't want to invest in expensive mining hardware, just buy Bitcoin with the money you would have spent on a cloud mining contract. This allows you to sell your position when the market experiences a dramatic downturn. You will not get stuck in a mining contract that is becoming worthless by the day.
How to mine bitcoin in a pool: tutorial
You probably already want to mine Bitcoin? There are a few things that you must have before you start:
- At least one ASIC Bitcoin mining rig.
- A mining application.
- A digital wallet to store the bitcoin that you make.
- Ventilation devices - fans, pipes (only for larger operations).
- Membership in a pool.
- Power divider.
- Power supplies (the power of your ASIC determines how many and what power you need).
- Ethernet cable.
- Internet connection.
- Computer or mobile device that can surf the Internet.
Set up the gear
The specific setup options depend on the ASIC miner model used. The manufacturer should specify exactly how to do this in their instruction manual or on their website. The following instructions are specific to how to mine bitcoin with the Antminer S9 unit on the Antpool. However, a lot of it is useful regardless of which ASIC miner you choose.
1. Determine the power consumption of your ASIC. This should be clearly stated in the manual under Specifications. The S9 used 1,275 watts.
2. Adapt your power supply units to the current consumption. Two 110 V power supplies with 1,000 W and 650 W are sufficient for most single-miner operations.
3. Connect the power supply units to the Antminer device using the appropriate connections.
4. Once you are connected to the power supply, plug in the ethernet cable and plug it into your internet router.
5. Make sure all necessary connections are made and turn on the power. Your Antminer S9 should now be switched on.
6. Use on your computer or mobile device an IP scan tool to view the devices connected to your internet connection. You should see your Antminer listed. You can then enter the IP address of the Antminer in your browser window on the device you have selected.
7. The next screen that appears should be the miner's login window. With the Antminer S9 the standard login data is username - root, password - root. You can change this by clicking on "AdministratorTab. I recommend doing this.
8. You will now need to enter various details from the mining pool that you will be using. You should be able to find these out easily on your mining pool's website.
9. Once entered, your Antminer should start mining in the pool.
Choosing a mining pool
On your way to learning to mine bitcoin, you can choose any bitcoin mining pool. However, we recommend that you first select one of these recommended pools:
|Pool name||Pool fee||Minimum payout||Pool address||Pool size|
|Slush pool||2%||1mBTC (for a fee) 10mBTC (free)||stratum + tcp: //eu.stratum.slushpool.com: 3333|
|ViaBTC||2% -4% (depending on the payment of the shares)||0.1 mBTC||stratum + tcp: //btc.viabtc.com: 3333||Large|
|F2Pool||3%||1mBTC||stratum + tcp: //stratum.f2pool.com: 3333||Large|
|Antpool||1%||0.5 mBTC||stratum + tcp //stratum.antpool.com||Large|
Note: Pool addresses are for users from Europe, if specified. Other addresses apply from other parts of the world.
Note: 1 MBTC is 1/1000 of a Bitcoin.
How to check how much you've broken down
Every mining pool has its own user interface. However, the idea is always the same. You must Visit your pool's website and Enter the public address of your wallet when prompted.
Enter your wallet's public address in the search bar. This will allow you to see all the information about your Bitcoin mining efforts to date. In some pools, users can choose how much they want to mine before their bitcoin is automatically sent to the external wallet Address you have given.
Calculation of expected profits
If you want to check how much you should be making, you can use a mining calculator. CryptoCompare offers an easy to use.
- Open your mining software and check how many megahashes are running per second (Mh / s).
- Load up the mining profitability calculator.
- Enter your current mining hashing power.
- Enter the power consumption of your device or devices.
- Enter the electricity costs in kWh. You should be able to get this from your utility company.
- Enter the pool fee for the pool you are using.
In the example from the image below we are using a single DragonMint T1 miner mining in the slush mining pool. Our electricity is roughly the average price in the UK. However, you should shop around to find the lowest electricity bills near you!
As you can see, mining in the UK is not particularly profitable! The high price of electricity means you will be lose $ 2.45 every day, even with the most efficient miner on the market. Taking into account the price of the device itself, this sample operation will run incredibly expensive!
If you've ever wondered how long it takes to mine a bitcoin, you can see that it depends on your hardware. With this sophisticated kit, it would take time just over three and a half years. This is also the current level of difficulty. The more miners work in the network, the greater the level of difficulty and the less Bitcoin a miner can expect.
That was it! This is my guide on how to mine bitcoin. I'll close the guide with a few thoughts on Bitcoin mining.
Bitcoin mining is very important. It's worth doing this even if you're not making big (or no) profits. The more miners work in the network, the safer it is. Some hobby miners are at a loss to dismantle the network. They see it as their duty to run a miner to grow the network decentralization and reduce the likelihood of a possible attackbe successful.
Unfortunately, Bitcoin is mining very competitive these days. Without a huge investment and the freedom to settle somewhere with low electricity prices and a cool climate, your chances of making big bucks mining Bitcoin are very slim.
Even if you have no plans to mine Bitcoin, it is still good to learn how it works so that you can better understand the technology as well as the entire industry.
If you don't have to spend a lot and are more interested in making a profit than securing the network, you can always mine another cryptocurrency. Several digital currencies can be successfully mined with a GPU or a CPU chip. ether and Monero are among the most popular choices. However, a quick search on the internet will find many more opaque projects that can be mined with less expensive hardware.
So that was it. That is the end of this bitcoin guide. I hope you learned a lot!
You should now know pretty much everything there is to know about mining Bitcoin. For the reasons, you should consider mining bitcoin, the setup procedure, and the answer to the question "How long does it take to mine a bitcoin?" If you want to learn more about Bitcoin mining software, click Here. If you're interested in top-notch bitcoin mining hardware, press Here.
If mining doesn't look like a cup of tea, you can also buy bitcoin on one of the more reliable exchanges such as Coinbase or Binance.
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