BITCOIN mining is the key to unlocking the wealth of the super-popular crypto token. Here is an introductory guide on how to mine bitcoin.
Bitcoin prices soaring over the course of 2017, potential investors are once again eyeing their option of jumping the bitcoin bandwagon in the new year.
If you are sitting on the fence about joining the crypto community, you are faced with two options.
You can either buy bitcoin for around £10,000 ($14,000) a token, or you could try and mine it.
But before you go ahead be aware that they halcyon days of bitcoin mining are over and the process to successfully find tokens is getting harder everyday.
1. Get a bitcoin wallet for your tokens The very first thing you need to do is secure a public bitcoin wallet address and a private key password. Remember that all bitcoin transaction are publicly visible on the blockchain, but just like your bank account, your wallet is yours and yours only to see.
There are four options available to you. You can choose an online service to store your tokens, run a wallet locally on your computer, on your smartphone or buy a physical wallet similar to a hard drive or USB stick.
Bitcoin wallets give you full control over your tokens and keep them safe and secure in the event that a crypto exchange is hacked or goes bust. You should never store your coins on an exchange.
There are several different pros and cons to the different types of wallets, so bear that in mind when you make you choice. Bitcoin.org has a good breakdown of the various choices you can make.
2. Get a powerful bitcoin mining rigEach bitcoin in existence is mined from a data set or block of intense calculations on the bitcoin network. Every time a block is successfully mined, a handful of around 12.5 bitcoin is handed out to miners as a reward.
The blocks are broken down by power-hungry ASIC mining rigs – specialist computers built for the sole purpose of mining bitcoin.
Just a few years ago this would have been possible with nothing more than a desktop computer or a graphics card (GPU), but the difficulty of mining bitcoin increases every four years or so, with the rewards for successful mining decreasing as well.
There are currently about 17 million bitcoins in existence, and the mining process is already slowing down.
Buying a mining rig can be a costly venture and with the current difficulty of mining it might not always be a cost effective method for everyone. This bitcoin mining calculator will help you calculate the costs of buying a rig now and the potential returns you might see.
3. Find a good bitcoin mining poolOnce you have set up your brand new mining rig, you will need to find a ming pool. A ming pool is a group of biotin miners that combine the power of their rigs to mine a block.
Mining through a pool is usually a better idea than going at it solo because the rewards are better. In a shared pool you will receive a smaller reward for successfully breaking a block, but the rewards will be more consistent and frequent.
The Bitcoin Wiki has a good comparison of various mining pools around the world, and the rewards they offer for joining.
4. Find the right mining software to kickstart your mining ventureThe very last step before you begin mining for bitcoin is to find a mining client that will run for you on your computer.
The program you use will depend on your computer make and the model of your mining rig. Some of the more popular options include BFGminer, CGminer and BTCMiner.
Here is a comprehensive list of the options available for Windows, Mac OS and Linux distros.
5. Start mining your very first bitcoin
There is one last thing to do before you kick back and wait for bitcoin to stream in. You need to fire off your mining rig and mining client.
You will have to start the software of your choice and enter the address and password of the mining pool you have chosen in step 3. After that, all you have to do is wait for your bitcoin rewards.