So You Want to Start Bitcoin Mining
So you want to start bitcoin mining
Bitcoin mining is a perfectly legal endeavor. In order to mine bitcoins, miners run SHA256 double round hash verification processes to validate bitcoin transactions and provide security to the distributed Bitcoin network. Bitcoin mining makes bitcoin possible.
The Bitcoin protocol and network compensates Bitcoin miners for the computing power they dedicate to the network with new issued bitcoins and a portion of the transaction fees they validate. The more computing power you contribute, the greater you share of the reward. The current most powerful bitcoin mining machine is the Antminer S9 by bitcoin miner Bitmain.
There are some important questions to ask yourself before begin bitcoin mining: Why am I doing this? Am I doing it to be profitable? Then, you should ask if it would even be profitable for you with a Bitcoin mining calculator. Are you doing it for a hobby? If so, keep in mind that should you profit, whether for hobby or profit, you’ll likely still owe taxes.
You’ll have to purchase specialized mining hardware with bitcoins. For instance, ASIC chips are computing chips tailored specifically for bitcoin, and are the only way to mine bitcoins. Bitcoin mining without the right equipment will undoubtedly result in the consumption of more electricity than you will earn.
An ASIC miner is the machine needed in order to mine bitcoin, and generally houses an ASIC chip. Short for ‘application-specific integrated circuit’, ASICS are integrated circuits (IC) customized for a particular use, rather than general purposes. In terms of Bitcoin mining hardware, ASICs far outperform predecessor bitcoin miners based on CPUs and GPUs, and FPGAs. Companies currently creating mining equipment include Avalon, Bitfury, Bitmain, Canaan, GekkoSciene, and Ebang.
You will also need software for Bitcoin mining. For some of these programs, you will need to know how to use your computer’s command line. Some software options include: BFGMiner, Bitminter, CGMiner Genesis Mining, Hashing 24, Minex, Minergate, Hashnest, Bitcoin Cloud Mining, and more.
Joining a bitcoin mining pool - that is, a group of bitcoin miners working together to solve bitcoin blocks and share in the rewards- might make your mining efforts more efficient. There are many different mining pools to choose from. For instance: Bitcoin.com, BitMinter, CK Pool, Eligius, libblkmaker, P2pool, Slush Pool, and Stratum Pool. You will receive smaller and easier algorithms to solve in a pool, and when your bitcoin miner’s work is combined it will make it more likely to solve the bigger algorithm and earn bitcoins.
Before choosing a mining pool, you’ll need to consider the reward method (Proportional/Pay Per Share/Score Based/PPLNS); What fee they charge for mining and withdrawal of funds; how frequently the pool finds a block; how easy it is to withdraw funds; what kind of stats they provide; and how stable is the pool. For more on mining pools, here a useful thread on Bitcoin Talk. The Bitcoin wiki also offers a comparison of mining pools.
https://bitcointalk.org/index.php?topic=51261.0
https://en.bitcoin.it/wiki/Comparison_of_mining_pools
Connect your bitcoin miner to a power outlet and turn it on. Be sure to connect it to your computer, which is generally done through a USB, and then open your mining software. You will be instructed to enter your mining pool, username and password.
Once this is configured you’ll basically start mining for Bitcoins, and you will actually start collecting shares of the reward which represent your part of the work in finding the next bitcoin block. According to the pool you’ve chosen, you will be paid for your share of coins – just make sure that you enter your address in the required fields when signing up to the pool.
In review, you’ll need to purchase bitcoin mining equipment, like an Antminer S9. You’ll need to create your bitcoin wallet, which could be as easy as setting up a wallet on Coinbase depending on your needs. You might consider joining a pool rather than being a solo miner. Joining a pool is much easier. Set up your mining hardware and install the bitcoin mining software on your computer so that you can monitor input and output, as well as vital statistics, including temperature and hash rate.
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