Bitcoin (BTC) Mining for Beginners
In the few years after Bitcoin launch, before the cryptocurrency boom of 2013, mining Bitcoin was a slam dunk. A lot of people regret missing the Bitcoin mining train in the early years. Back then, Bitcoin mining was relatively easy, and not the competitive, sophisticated activity it is now. You could mine from a CPU and make a handsome profit off the exchange rate.
The phenomenon of cryptocurrency was still mostly exclusive to tech enthusiasts. This fact meant that only people excited about cryptography and the decentralized ideals Satoshi Nakamoto espoused saw the potential of Bitcoin.
Furthermore, the timing right after the global financial meltdown meant Bitcoin appealed to some people disillusioned with the existing financial system. Of particular concern was the effects of unchecked centralized monetary systems.
Bitcoin, believers reckon, was the answer, a kind of “God sent” solution to save the burdened masses. Eleven years later, Bitcoin is a household name. But what exactly is Bitcoin mining? Is crypto mining profitable?
What is Bitcoin Mining?
Bitcoin mining is what gels the Bitcoin network together. Miners earn new Bitcoin by channeling actions that support the Proof of Work system. Bitcoin mining is, therefore, the process of securing the network and validating assembled BTC transactions.
Why is mining important? Decentralization means that no one can claim ownership or control of Bitcoin. Without a single entity to manage the network, whose responsibility is it to secure or confirm (validate) transactions? In ordinary bank transactions, it is the responsibility of banks to verify that all transactions effected over its network are valid.
To ensure decentralization works, the miners fulfill the vital task of securing the network. The blockchain network relies on distributed computers (full nodes) that have a copy of the open digital ledger. The miners compete to add the next block of transactions to the network and have the incentive of earning newly mined BTCs and transaction fees. This revenue is compensation for the time-intensive and resource-consuming activity that Bitcoin mining requires. The software automating a miner’s operation is called the Bitcoin Core. It is freely downloadable from the Bitcoin Foundation.
Crypto mining is a straightforward activity: bundle together the latest BTC transactions into a block and confirm its validity by solving a complex cryptographical puzzle through Proof-of-Work.
That is where the miner’s hardware is called to “work” as this is a race where the fastest, most efficient gadget, packing the most hash rate, is most likely to emerge victorious and earn 12.5 BTCs. The act of mining ought to be economically prohibitive to avert malicious elements from taking advantage of the network weakness. Otherwise, they will have the incentive to launch attacks and mint “false coins.”
A dreaded attack called the 51% or a Majority attack has been carried out in other low hash rate networks. Ethereum Classic and Bitcoin Gold are some of the latest victims. There are hundreds of others, but hackers have their muzzles set on Bitcoin since it is the most liquid and valuable coin in the sphere. However, it will be a long shot: BTC is also the most secure and theoretically impossible to attack given the level of investment and hash rate.
Bitcoin Mining: Step by Step Guide
You may wonder, so how exactly is Bitcoin mined? How do I get started, and how to mine Bitcoin at home? Well, there are two ways of participating. First, one can buy the best Bitcoin mining hardware, locate an ideal place with low electricity, and get going. Alternatively, you have the option of investing in hash rate from a legal Bitcoin hardware mining company. If you want to mine Bitcoin at home, do this:
First, get a Bitcoin mining rig. In the early days of Bitcoin, your home PC would have done the job. However, times have changed, and there is noticeable advancement in the technical capabilities of manufacturers. Nowadays, Application Specific Integrated Circuits (ASIC) rigs dominate. These are specialized hardware tuned to specifically mine Bitcoin and other coins based on Bitcoin’s algorithm. ASICs are energy efficient and can mine more Bitcoins because of their high hash rate. But they don’t come cheap. The latest from Bitmain, the Antminer S17+ retails between $2,400 to $2,700 but packs a punch. This miner offers a 73 TH/s of hash rate. In your research, check the gear’s performance-gauged by hash rate, its power consumption, and price. One thing though: Bitcoin mining gear is on-demand, and the best ones are pre-ordered but always out of stock. Assuming you get lucky, once you have zeroed in on one, factor in the cost of electricity, the cost of joining a mining pool, and the spot BTC rates.
Second, get a Bitcoin wallet. This wallet is where you will receive your BTC dividends, and it also where you will manage your BTC address. There are lightweight options, but as a miner, you ought to download the full network, and that means a single coin Bitcoin core wallet. Downloading a whole miner requires space, and synchronization will take hours now that the Bitcoin network size is big and keeps increasing as it gains mainstream adoption. Always backup your wallet’s private key in another device. You can write it down on a piece of paper and tuck it away safely.
Third, join a mining pool. Another reality check: Mining on your own is most likely unprofitable. Pooling the hash rate increases your odds of earning BTC and competing against dedicated Bitcoin farms. This necessary cooperation by miners creates a mining pool. Rewarded Bitcoins are divided depending on the contributed hash rate. Although yields are low, rewards are regular. For a typical mining pool, fees vary anywhere from 0 to 2 percent of the earned BTCs. Identify one, Register, and set up an account. Upon confirmation, you’ll receive a worker ID.
Fourth, get mining software. The software will be your mining client, an interface that connects your mining gear to the Bitcoin network. The mining software delivers and collects “work.” It also adds all the details back to the blockchain. Bitcoin (BTC) mining software are usually free.
Fifth, synchronize and start mining Bitcoin.
Earn Bitcoin From a Hardware Mining Company
From the aforementioned, mining on your own is difficult without the equipment and setting to facilitate the process. Electricity prices and scarcity of mining gear are a significant hindrance. You may be inclined to participate, but controlling availability and pricing are factors beyond your control. That’s not forgetting inflation, which always pushes electricity costs higher. Accordingly, mining costs will go up naturally with time. Electricity distributors will always pass this to consumers, and there is no way around it.
For this exact reason, joining a hardware mining host is a viable option. Through a trusted Bitcoin hardware mining provider like Advanced Mining, you have a sophisticated way of mining Bitcoin without incurring overheads and letting your money do the work. All you have to do is register for free and buy a Bitcoin mining contract from their modern data centers located in the US and Canada.
Every day, depending on the facility’s productivity, BTCs are sent to your wallet, meaning you can start earning after a day. Advanced Mining has a transparent Maintenance and Electricity Fees (MEF) costs, contract buyers own up-to-date gear on top of getting rewarded with Bitcoins. The cool thing is that it is free to set up an account, and there are seven packages to choose from. Sign up and start earning Bitcoin.