Before you can start mining for bitcoins, first you have to understand how it works and everything that you will need. Bitcoin mining is a legal form of mining for cash, and you accomplish it as a round hash verification process that will provide you with a security for your Bitcoin network. They measure the speed of Bitcoin mining with hashes per second. After you have joined a network, you will be compensated for your effort in releasing the various bitcoins, and everyone who contributed to the computational power will be awarded bitcoins. It should be noted that the more computing power that you have contributed, the greater your share when the reward comes around.
Your first step in getting started with mining bitcoins involves buying the best Bitcoin mining hardware that you can afford. The better the hardware, the more you will earn when you start mining. There are computers that have been made specifically for Bitcoin mining, and they can reach into the thousands of dollars, but the better your high speed video processor card, the easier time you will have with mining. Choosing a custom-made Bitcoin ASIC chip will improve your performance by a lot. In the past, you may not have needed it, but these are the systems that have come to dominate the industry, and they perform at up to 100 times faster than the older system. If you choose to use anything else, you should be aware that you will consume more electricity than what you will earn. Electricity becomes another reason that you have to mine bitcoins with the best hardware that you can afford. Without it, you will have to pay more than it is worth.
When choosing a machine, understand that there are several companies like Avalon that offer amazing systems that were built for the purpose of mining bitcoins. You can also purchase a bitcoin cloud mining contract. That simplifies the process, but it increases your risk because you will not have control over the physical hardware that has been listed. You especially have to be cautious of Bitcoin cloud mining contracts because there has been an astounding level of scams in this field.
After you have bought your Bitcoin mining hardware, next you will have to download the free mining software. There are actually multiple programs available that you can install for Bitcoin mining, but there are a few key players in the industry:
- BFGminer
- CGminer
- BitMinter
- BTCMiner
- DiabloMiner
BFGminer and CGminer are both command line programs, and if you prefer the ease of use with GUI, then you could also try EasyMiner, which is available for Android, Linux and Windows. In the next step, you will need to join one of the bitcoins mining pool. Bitcoin mining pools involve groups of people who share the common goal of trying to solve blocks, and they will share the spoils of the effort. Some people have sometimes tried to mine bitcoins without a group, and then they complain that they have not earned anything. The problem with trying to mine bitcoins alone is that you could try to do this for over a year, and you are still not any closer to earning a bitcoin. You end up paying more for electricity than what you earn.
With a Bitcoin mining pool, the advantage is that everyone on the team will share the work, and they will split their rewards. The fourth step involves creating a Bitcoin wallet. Before you can start mining bitcoins, you will want to create a Bitcoin wallet or use your existing Bitcoin wallet. Like a traditional wallet, you Bitcoin wallet can be based on software, the Internet, mobile or hardware based. Whenever you have earned a bitcoin, the money will be sent to your wallet, and you will use a unique address that belongs to you. When setting up a Bitcoin wallet, the most important step in the process is to secure it to avoid problems with cyber criminals. To do this, you can create a two-factor authentication. You can also keep your bitcoins on a computer that does not have Internet access.
Mining bitcoins could be compared with competing in a giant lottery on a network to win bitcoins. The faster your mining hardware, the more tries per second you will have, and the greater the chances that you will have at winning. Electricity and specialized equipment could be said to be the cost of getting started. The Bitcoin mining world has evolved with time, and the Butterfly Labs FPGA “Single,” has given way to manufactured hardware that focuses on mining bitcoins. Whenever mining bitcoins, it is crucial to make sure that the electricity does not overtake the output, or you will be losing money when mining bitcoins. In essence, the more power efficient your mining device, the higher your profits will be.