Bitcoin mining is a process through which new Bitcoins come into existence. The Bitcoin blockchain network consists of “miners” who are responsible for creating new blocks, validating transactions and creating new Bitcoins. Miners around the world have to solve mathematical puzzles in an attempt to create the new block and earn “block rewards.” These rewards are 12.5 Bitcoins. Keep piling on the money, and you could be sitting on a small crypto fortune.
But things are easier said than done in the world of cryptocurrencies. Remember, you are competing with an army of miners from around the world who have the same goal as you- mine the next block. This means that you will need lots of computing power, electricity and a mountain of patience before you could get something in mining. According to the current difficulty level, your chance of mining a block is one in six trillion.
If you think that mining for Bitcoin could be a valuable business for you, follow our guide and get started.
Get the latest miners
The Antminer S9 is the gold standard in Bitcoin mining, and if you don’t have it, the chances of burning cash and getting nothing in return are high. Remember, you are competing against thousands, if not millions of other miners to mine the next block by solving a mathematical puzzle and you have to be the first one to do it. Therefore, having a powerful mining machine by your side will be a good idea. In the early days of mining, GPU or PC based mining was considered okay, but not anymore.
Ensure a steady supply of electricity
You will need a steady and surplus supply of electricity, no matter where you are mining. The equipment tends to heat easily and are power hungry monsters themselves. Therefore, you will have to bear the costs of cooling systems and well as the power to run the equipment, which will likely run 24×7.
Get the right software
Depending on the brand of mining hardware you buy, you will need to download a few software as well. The most important piece of your software puzzle will be your Bitcoin wallet. This is a place where you will receive and store all the BTC that you earn via mining. You can use it to send and receive BTC payments as well.
Join a mining pool
It is difficult for a miner sitting in his garage to pump up enough power to mine the next block leaving several large miners behind. In order to increase your chances of getting some returns, you should join a Bitcoin mining pool. You don’t even need to buy equipment. Just pay for the services which pool the resources of several miners like you. This helps in giving the pool maximum power and a higher probability of mining the next block. The block reward is split between all users, but you at least receive something.
Calculate your mining profitability
Before taking the plunge, it would be better to check your mining profitability. There are a few websites that could help you estimate the electricity and other costs of Bitcoin mining and compare it with the most recent price of Bitcoin. As the crypto is going through a bear market, you may not be able to recover your costs. Therefore, checking profitability is essential.