How to mine Bitcoin it is one of the ways to own this currency instead of investing in reputable virtual currency exchanges. This question is of interest to many investors because now there are so many ways that make you wonder which path is right for you. This is exactly the article for you, Kiemtien.com will guide you through 5 steps to participate in Bitcoin mining extremely effectively. Let's start!
Step 1: Create a Bitcoin Wallet – The First Step When Mining Bitcoin
The first important step is to set up a Bitcoin wallet. This is where you will receive your Bitcoins and be able to manipulate them. Bitcoin Wallet allows you to manage your Bitcoin address (Bitcoin is technically stored on the Blockchain).
Each Bitcoin address has a corresponding form of public and private key. The public key consists of a unique combination of characters and looks like this: 18ukxpD1eqnVjux13ehEz8r4d8py1dSdzw. It basically works like a bank account number, so if you want to receive Bitcoins from someone, you have to tell that person your public key.
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Every Bitcoin address is public and you can track all transactions that went through that address. In contrast, the private key is secret and is used to send transactions. If you lose your private key, you will permanently lose Bitcoins placed at this particular address.
In general, there are many types of wallets, from simple online wallets, software wallets to paper wallets, and hardware is the most secure. Each wallet has its own pros and cons. Some may contain multiple currencies at the same time.
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Which wallet is best for beginners?
The best option to start mining is a software wallet. It is safe but still manageable and suitable for frequent handling of mined currency. You easily download the wallet to your computer where your money is stored and no one can get it.
There are two types of software wallets: full-featured wallets that download the entire Blockchain or lightweight wallets that only store relevant transactions. The first option requires a lot of space and memory on your computer, but is definitely safer. On the other hand, the lightweight variant is connected to a Blockchain managed by a third party and you cannot completely control it.
If you have decided to go for the full version of the wallet, you can download the Bitcoin Core. Note that its full sync takes several hours as the Blockchain is now tens of GB in size. Set your own password for the wallet in the program and don't forget to save a copy of your wallet on another device, otherwise your Bitcoins will be lost forever if your computer crashes. If you like a wallet that can manage multiple currencies, give it a try. Exodus.
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Step 2: Build a Bitcoin Mining System
If you want to start mining Bitcoin, you must have a system. This system includes: facilities, electrical system, grid system and ASIC miner – Bitcoin Miner. Do not try to mine Bitcoin with your desktop or laptop as they cannot generate enough profit to make up for the electricity you have to pay.
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The current way of mining Bitcoin is with special hardware dedicated to mining Bitcoin or other coins based on the same algorithm. It's called ASIC (application-specific integrated circuit chip), it uses less power, and Bitcoin mining is much faster. However, the device is expensive and the manufacturing process is time consuming, but its speed is incredible. The most powerful machines can resolve up to 14 terahashes per second (meaning it does 1012 times to resolve a block per second) and it's still growing.
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How to choose the ASIC system?
If you are thinking about how to mine Bitcoin efficiently, you should focus on the following parameters in your selection process: Performance (hash rate), electricity consumption and price. The hash rate indicates how many times the machine can resolve a block per second.
We recommend that you go through different miner reviews and then choose the one that seems most beneficial to you. Don't just choose the price, focus on the overall weight of price, performance and consumption. In a word, the most efficient miner is the best. You can join the new Bitcoin mining fraternity on the Asic Miner Value website, which displays detailed information about new miners.
Keep in mind that it is very difficult to get these devices nowadays because the demand is so high. It also affects the price of these devices which fluctuate between hundreds or even thousands of dollars. Before buying an ASIC miner, try to calculate the profit of the selected device on an online calculator. In addition to your mining rig parameters, the calculation also includes electricity prices, mining pool fees, or mining difficulty. You will learn if this way of mining bitcoin can be profitable or how much money you have to invest in the first place.
In your decision making, consider the increasing difficulty of mining as well as diminishing returns over time. What does it mean in practice? If the difficulty increases by about 10% after 14 days, the profit will decrease by about 10%.
For more information on Bitcoin mining, see:
Where should you place your Bitcoin miner?
Bitcoin mining not only requires a lot of electricity, but also a special location for a machine, because mining rigs are very noisy and give off a lot of heat. The service operator provides a solution to this problem that you can put your Bitcoin miner in a professional data center and remove all these worries. You will profit from lower energy prices, refrigerated area, constant monitoring and you will not be disturbed by any noise.
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Step 3: How to mine Bitcoin – Join a Bitcoin mining pool (Mining Pool)
Even with the best ASIC miner, it is almost impossible to earn Bitcoins today. A single machine cannot compete with many of the world's top mining systems, and mining your own Bitcoin is not always profitable. But don't worry, there is a solution to this situation which is cooperation between other miners or mining pools.
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Miners give their computing power to a pool and when Bitcoins are mined, the profits are divided among the members according to certain power. Lower but stable income. However, members of a group have to pay a group moderator fee, which is usually between 0 and 2% of the reward received.
This 2017 chart illustrates a representation of the best groups. For better guidance, you can use Bitcoin Wiki comparison of mining pools. Beginners should try the Slush Pool, the first one out there and considered one of the most reliable. An interesting fact is that a Czech programmer – Marek Palatinus is responsible for the birth of Slush Pool. Once you choose a mining pool, register on their website and set up your account. You will receive a personal ID for your miner.
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Step 4: Install Bitcoin Mining Software – Bitcoin Mining Instructions
Now that you have your hardware, a Bitcoin wallet and have chosen a mining pool, it is time to install mining software that runs on your computer. It connects you to the Blockchain and Bitcoin network. Mining software provides miners with work, collects the complete results of their work and adds all the information back to the Blockchain. In addition, Bitcoin mining software monitors miners' activities and displays basic statistics such as temperature, cooling, hash rate, and average mining speed.
In general, there are many free programs used to mine Bitcoin, the best ones can run on almost any system and each of them has its own advantages and disadvantages. Some mining pools also have their own software.
Beginners will appreciate Nice Hash Miner. It is very easy to use, mines a lot of cryptocurrencies and automatically chooses an algorithm that gives the most profit at a given time. Download the program and choose a device you want to mine.
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Step 5: Start mining
And now you can start mining and earning Bitcoins. Plug your mining machine into an electrical outlet, plug it into your computer and install the mining software. Fill your wallet and mining pool information in the mining software, choose a device and start mining.
If you want to mine profitably, follow news and rates of virtual currencies, the market development is very fast and changes every day.
Above are 5 detailed and effective Bitcoin mining steps that we want to share with you. There are many ways to own Bitcoin with Bitcoin mining being one of the ways tech-savvy and technical investors want to get involved. Because this is an opportunity for them to show their talent and be able to own Bitcoin without spending money to buy it on Bitcoin exchanges. I hope the specific steps above will be the foundation to help those who are learning about Bitcoin mining and participating in Bitcoin mining. Don't forget to regularly update the news related to the economic and financial markets to have new judgments on the price of Bitcoin as well as the volatility of this billion dollar industry.
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