KEY Tips You Should Know Before Mining Bitcoin
Regardless of your drive to mine Bitcoins through any mining pool around, access to cheap electricity, broad internet bandwidth and large computing hardware is critical. An Easy way out…join a mining pool.
What is Bitcoin Mining?
Bitcoin mining is simply securing and validating every Bitcoin transaction into the blockchain network. The mining process is done by miners and it is the backbone of the Bitcoin trading network.
Bitcoin miners are required to solve a complex computational problem called hashing.
Hashing in cryptography involves generating a unique 64 hexadecimal number code for securing each bitcoin transaction. In the Bitcoin protocol, the hash function is used to write new transactions into the blockchain network.
Bitcoin miners get paid for completing this service and securing the network, thereby keeping the integrity of the system. Miners are like auditors, checking through each transaction and validating it.
Since Bitcoin is a digital currency and cannot be held or exchanged by hand, the tendency for a holder of Bitcoin to illicitly duplicate a coin is possible, this is called Double Spending.
Bitcoin miners are paid to prevent duplication or fraud of any kind thereby strengthening the Bitcoin and cryptocurrency network. Remember that bitcoin has no government regulating its affairs, so miners stand in as gatekeepers to take care of this.
What Do Miners Actually Do?
With the thrill of earning cryptocurrency especially Bitcoin since its advent in 2009, some investors that were not willing to convert their Fiat currencies to Bitcoin found other ways to earn this coin. Mining became one of the ways of earning crypto as a reward for painstaking work of entering these transactions into a blockchain.
A miner’s job is to complete blocks of verified transactions by solving a complex hashing puzzle. The trick here is that you have to be the first to solve the puzzle to earn a reward. Getting a reward depends on the total mining power of your own network.
As a miner, you’re required to verify 1Megabyte (MB) worth of transaction to the blockchain to be eligible for a reward. These verifications help keep the system clean and trustworthy. Why the limit is set to 1MB by Satoshi Nakamoto in 2009 is still unclear, miners have pushed for a review of the limit to enable miners earn more and get the job done faster.
Note that verifying 1MB worth of Bitcoin transactions is not a guarantee that you would earn.
However, there are two requirements for earning.
- Must process 1MB worth of Bitcoin transaction.
- Must be the first to solve the hashing puzzle with a proof of work, which is also known as your evidence.
You need to put in the effort to earn, but most importantly, you need a dose of luck to get there first.
What Does it Take to Solve the Hashing Puzzle?
What this entails is to solve a numerical problem of guessing a hexadecimal code close to, or equal to the target hash or code. The 64 digit hexadecimal code appears alphanumeric.
With the miners’ powerful computers, they can guess these 64 digit hexadecimal code called Nonce (Number only used once) as many as possible and fast. A nonce is usually 32bits in size compared to the targeted hash of 256bits. Each nonce is a possible key required to get the targeted hash for securing a Bitcoin transaction.
Now, looking at this whole mining process seems it’s all guess work and an uphill task. In order to solve the hashing problem first, a miner needs a lot of computing work and a high hash rate to possibly get successful. And that’s why tons of investment in computer hardware needs to be done upfront.
Minimum Requirements for Bitcoin Mining
You possibly could have heard of big computer hardware in Bitcoin mining?
YES…This is correct.
When Bitcoin was introduced back in 2009, mining was possible with your regular home desktop PC. With more mining pools and miners, home PCs have fallen short as system requirements for mining has since stepped up really high. Desktop graphic cards for PCs used to be compatible but not any more.
These days mining requires a special hardware built for the purpose of mining more efficiently. These powerful machines are quite expensive too which uses a special chip known as the ASIC (Application Specific Integrated Circuit Chips).
For example, to mine with bitcoin core, these are its minimum requirements and warnings.
To mine Bitcoin with the bare minimum, a computer system needs a minimum disk space of 200GB and frequency equal to or higher than 1GHZ to accommodate the high hashing activity.
With Bitcoin core, these are the minimum requirements in three unique settings.
Bare minimum (With default settings)
- Disk space – 200 GB
- Download – 250 MB/day (8 GB/month)*
- Upload – 5 GB/day (150 GB/month)
- Memory (RAM) – 512 MB
- System – Desktop<br, Laptop<br Some ARM chipsets >1 GHz
- Operating system – Windows 7/8.x<br Mac OS X<br Linux<br Some BSDs
Bare minimum (With custom settings)
- Disk space – 5 GB
- Download – 150 MB/day (5 GB/month)*
- Upload – 10 MB/day (300 MB/month)
- Memory (RAM)– 256 MB
- System – Desktop<br Laptop<br Most ARM chipsets
- Operating system – Windows 7/8.x<br Mac OS X<br Linux<br Some BSDs
* Plus a one-time 195 GB download the first time you start Bitcoin Core.
- Disk space – 200 GB.
- Download – 500 MB/day (15 GB/month)
- Upload – 5 GB/day (150 GB/month)
- Memory (RAM) -1 GB.
- System – Desktop. Laptop Some ARM chipsets >1 GHz.
- Operating system – Windows 7/8.x/10<br. Mac OS X Linux.
Considering upload and download requirements, it’s advisable to check with your internet provider on the max upload bandwidth. Some providers will cut you off without warnings when you exceed you quota. Have it in mind that additional charges may apply to customise your internet plan.
How to Start Bitcoin Mining
To start mining Bitcoin, these are key steps to take.
Get a Bitcoin Mining Rig
Getting a mining rig is the same as owning your own computer mining rig or hardware. If you’re keen on mining Bitcoin, these are key rig factors to consider.
- Performance (hash rate)
- Power consumption
The hash rate suggests the number of times and speed to solve a block per second. Mining rigs consume a lot of power and generates a lot of noise and heat. With the inconvenience of the huge systems, Mining pools now run professional datacentres around specifically to house miners machines, taking over power, cooling and noise concerns at a small fee to miners.
With enough cooling to keep the system at the right temperature and working efficiently, miners need not worry about hardware.
To choose a rig right for you, consider going for the best, check customer reviews to see what others are saying. Choosing solely on price is not enough and may not be effective in the long run. ASIC miner value is a site to compare mining rigs.
SEE ALSO: 10 Best Cryptocurrency Exchanges in 2021
Get a Bitcoin Wallet
A Bitcoin wallet is where all your coins are stored and manipulated. There are different types of wallets with varying features and advantages.
- Software wallet (secure),
- Hardware wallet (highly secured) and,
- Paper wallet (highly secured).
For Bitcoin miners, it is advisable to go for a software wallet; they can be easily managed, suitable for easy currency manipulation and it is secured as well. The software wallet can be downloaded to your computer to start mining. It is safe and secure and only you can have access to them.
There are two types of software wallets, the fully downloadable one and the light-weight. The full version is most secure but requires a higher disk space to store all blockchain transactions. The light-weight only store relevant transactions as you permit but you have no full control over it because it is linked to a third-party.
SEE ALSO: Best Hot and Cold Bitcoin Wallets
To download a full version you can do so with Bitcoin core.
Note that downloading takes time because of the size of the blockchain estimated to be over 10GB. Ensure you create a backup of your downloaded wallet on another device to avoid losing your Bitcoins forever in case of system failure.
What Are The Best Bitcoin Mining Software?
Now you have a Bitcoin wallet, address and mining hardware, it’s time to link your wallet with mining software where all the manipulations would be done.
We have searched around and have found these five reliable Bitcoin mining software.
This is one of the best Cloudbase Bitcoin mining pools with over 370,000 users mining Bitcoin with the latest algorithm. With BTCMiner, you do not need any complex mining equipment which aims to reduce setup cost and increase mining power.
BTCMiner’s datacentres round the world provides the computing power and dedicated up-links needed to mine with 99.9% uptime and so users need not worry about the hardware stuff. All you need to do is to select your desired power and start generating revenue.
One of the coolest features is that its dynamic frequency scaling is based on error measurement and so produces one of the highest hash rates.
The BFGMiner is a modular miner of ASIC/FPGA written in C, which features monitoring, dynamic clocking and remote interface capabilities. It runs on Windows, Mac and Linux. Its coolest feature is the ability to mine multiple cryptocurrencies simultaneously. It also has a high frequency hash rate on major algorithms like SHA256d and Scrypt.
EasyMiner is a multiple cryptocurrency mining software developed with a very simple interface. It is a GUI for Cudaminer, Cgminer, CCminer, Cudaming and a couple of others. EasyMiner supports the ASIC mining based on the Cgminer ports.
To mine with EasyMiner, you must complete your mining sessions with a cpu or gpu hardware. Mining sessions mean getting as many shares as possible using the hardware. It’s important to note that it has two working modes;
- Classic mode – Allows you choose the mining pool and coin of your choice.
- Moneymaker mode – Mines only in EasyMiner’s pool, earning you Litecoins.
The CGMiner earned its popularity as one of the most versatile mining pools to use and has embraced a lot of users in the cryptocurrency mining space. Being an open source code, it is written on C and runs on Mac, Windows and Linux. Its versatility is hinged on the fact that it is compatible with three mining hardware ASIC, GPU and FPGA.
CGMiner’s coolest feature is its ability to scale a hash rate of any measure without stalling.
The Awesomeminer is a complete solution you need to manage and monitor your mining operations. This mining software is capable of scaling up to 200,000 ASIC miners and 25,000 GPU/CPU miners at the same time, that’s a hell of work this mining software accomplishes. The use of Native overclocking to control clock speed, voltage and other GPU properties are amazing and automatically applying itself on a large scale to the entire mining farm in view of the current mining algorithm.
The coolest feature is its profit switching feature that optimizes the system for maximum profitability considering the statistics from the multiple-coin pools. This you can do at the click of a button.
Can I Mine Bitcoin with a Mobile Phone?
You can mine Bitcoin on smartphones that uses the Android operating system. With this possible, the Google Play store is flooded with Bitcoin mining apps.
This is however not so for Apple IPhone users. Apple updated its developer guidelines to ban Bitcoin mining on its devices, claims were that the apps consumed lots of computation power and as such limited the use of mining apps.
Can I Mine Bitcoin with A Home Pc or Desktop?
It is possible to mine Bitcoin with a Home PC, but look at it this way…Would you rather stick with a PC mining with 1/1000th the computation power you need?
Compare your Home PC to serious miners who have invested in the right mining equipment and have possibly hired more hands in getting the job done fast.
Remember that earning Bitcoins through mining pools go to the fastest fingers first and so mining is a serious business. You shouldn’t waste your time doing it the wrong way.
How Long Does It Take To Mine 1 Bitcoin?
On the average, it takes about 10 minutes to mine 1BTC due to many mining pools around and lots of combined computation power.
How Many Bitcoins Are Left In The World?
There are only 21,000,000 Bitcoins left in the world to mine. Analyst suggests that it may take up to 2140 to mine all the Bitcoins left. BuyBitcoinWorldwide suggests that about 98% of the 21 million Bitcoins should be technically mined by 2030.
What Happens To Bitcoin After All Are Mined?
When all the Bitcoins in the world are mined, Miners will no long earn rewards from blocks anymore. They can only earn from transaction fees from every transaction they confirm. The race is on and miners are increasing their ability to mine and earn more from their services.
Is Bitcoin Mining Worth It?
Yes it is …But with a few variables.
Cost of Electricity – Will your mining profits cover your energy costs?
Cost of Hardware – How long will it take your earnings to cover up investment cost in machines? The 2020 Bitcoin halving occurred in May 11, 2020 for the second time since 2009, reducing the block subsidy from 12.5BTC to 6.25BTC per block, 6.25BTC is what a miner would earn from completing a block of transaction.
So if you check what your potential earning could be, then compare with your investments into mining, you perhaps would know how long it would take to make your capital back.
Choice of Hardware – The most expensive hardware is not necessarily the best. Due diligence on the requirements your system must have is key to efficient mining at fast frequencies. Hardware capable of computing a high hash rate with less power is usually an overriding factor.
Getting ahead and staying there requires sorting out these variables.
What is Bitcoin’s Price Today?
On October 12, 2009, Bitcoin gained for the first time after its release and was worth $0.0009. Since then, Bitcoin has maintained an upward trend getting to an “All-time high” of $62,964 on April 14, 2021. Bitcoin is trading within the $19k – $22k range mid 2022.
See Live Chart for Today’s Price
SEE ALSO: Investing in Litecoin and How it works
Bitcoin has a very impressive history and its recent trend shows it’s not slowing down. This digital currency is the currency of the future as it daily gains more grounds all over the financial world.
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