So you've heard of Bitcoin, and you're ready to get rich digitally. You can buy and sell bitcoins, or you can "mine" bitcoins. Mining bitcoin is actually a process for verifying other bitcoin transactions, for which the user gets rewarded. This is the central mechanism behind the bitcoin economy, and mining is used to keep transactions safe and trustworthy. This guide will explain how to mine bitcoin and the potential to earn some money.
Step
Step 1. Purchase custom made bitcoin mining hardware
When bitcoin was first started, mining for bitcoins could only be done using a processor and graphics card on a desktop computer. While this can still be done, the results obtained make this method impractical. You will spend more on electricity than the money you make mining bitcoins. In contrast, custom made hardware allows for a better process of mining bitcoins and uses the same electrical power.
- Hardware comes in the form of a graphics card which is installed in the computer in the same way as a graphics card.
- The well-known hardware for mining bitcoins are Butterfly Labs, Bitcoin Ultra, CoinTerra, etc.
- Hardware specifically for mining bitcoins can cost anywhere from a few million rupiah to hundreds of millions of rupiah depending on the number of processes that can be performed per second.
Step 2. Create a bitcoin wallet
Bitcoins are stored in encrypted digital wallets to protect your money. These wallets can be online or locally. While online services that store your wallet will not be able to access it, it is considered less secure because your money could potentially be lost in the event of a major disaster in their place.
- Most bitcoin users recommend using a local wallet for security reasons.
- Local wallets usually require verification of the entire blockchain, which is the history of all bitcoin transactions. Storing a blockchain on a server helps keep bitcoins running safely. Synchronizing with this blockchain for the first time will take about a day or so.
- Popular local wallets include BitcoinQT, Armory, and Multibit. Multibit is not necessary to download the entire blockchain.
- You can also get apps for your gadgets. This application does not need to download the entire blockchain. Notable applications include: Blockchain and CoinJar.
- If you lose your bitcoin wallet, then you will lose your money!
Step 3. Secure your wallet
Since there is no "ownership" when it comes to wallets, anyone with access to your wallet can use the coins as they please. To prevent this, use two-step verification and store the wallet on a computer that does not have internet access.
Step 4. Decide whether to join a pool or try mining yourself
When it comes to mining bitcoins, you have two main choices: join an existing pool or try to mine on your own. A pool allows you to share resources and split the rewards, which can lead to faster results. Mining yourself can be difficult because getting new bitcoins is very competitive, but you can keep them all.
- Without joining a pool, you may go a year without earning bitcoins. Because bitcoins are awarded to the pool that finds them.
- Most pools quote a fee (about 2%) of your revenue.
- When joining a pool, you need to create a "worker". This is the sub account used to track your contributions to the pool. You can have many workers at the same time. Each pool has instructions on how to create workers.
Step 5. Download the program to mine bitcoins
Almost all programs for mining bitcoins are available for free. There are several different mining programs depending on the type of hardware you are running. Mining programs run using the command line and may require a batch file to run properly. Especially if you are connected to a pool.
- Two well-known bitcoin mining programs are CGminer and BFGminer. EasyMiner is run using a graphical interface as opposed to the command line.
- Refer to the help section of your pool for details on how to link the miner program to the pool.
- If you mine bitcoin yourself, be sure to link your miner program with your personal bitcoin wallet, so that the bitcoins you earn can be saved automatically. If you mine as part of a pool, you will link your wallet with your account in the pool. Coins will be transferred once earned.
Step 6. Run your miner
Once you have configured the miner, you can start mining activities. Run the batch file you've created if necessary and watch the miners start to connect and start mining. You will find that the computer you are using will be slow when the miner starts working.
Step 7. Pay attention to the temperature of the computer
Mining programs push hardware to their maximum limits, especially if the hardware was not originally designed to mine bitcoins. Use a program like SpeedFan to make sure your computer's temperature doesn't go over a safe limit. Graphics card temperature should not exceed 80°C.
Step 8. Check your profit
After you've been mining for a while, check your earnings to make sure it's worth continuing. How much did you earn in the last few days? Compare that to how much money you spend to run the computer at full speed during that time (some graphics cards require around 300-500 watts of power).
