11 min read
Admit it, when you first heard the words: ‘mining bitcoin‘, you must have reproduced in your head an image of a sweaty miner sowing the earth, concentrated on extracting gold coins with the bitcoin logo.
Well, although Bitcoin is considered the gold of cryptomonies, the imaginative image you’ve been able to visualize in your mind is far from reality, and today I’ll explain why.
In the meantime, try to replace the image of mining with huge shelves that support super-powerful hardware machines and … voila.
Here you are, catapulted into the fantastic world of bitcoin mining. So, if you’re interested in learning how to mine bitcoin and how to make money from it, read on.
What it means to mine Bitcoin
We can define bitcoin mining as the process of creating new bitcoins that is executed by high-powered computers that have the task of solving complex mathematical puzzles.
Bitcoin mining is necessary to keep track of the transactions on which bitcoin is based, to protect the network and to process each transaction in Bitcoin.
How Bitcoin mining works
By means of bitcoin mining, the blocks of the blockchain are generated. This operation is intended to process and verify the transactions made in bitcoin.
Every time you want to add a block to the blockchain and the miners have to solve the computer puzzle, it needs a certain period of time and a certain processing power to achieve it.
In fact, the rules of the network are set so that the difficulty of solving the mathematical problem is adjusted to maintain the output of 1 block every 10 minutes or so. The more miners participate in the mining activity, the greater the difficulty in generating a block.
The higher the difficulty, the less vulnerable the chain of blocks will be and the harder it will be to attack the network and allow a potential attacker to endanger it.
In short, miners protect the Bitcoin network.
The more miners they mine, the safer the network will be.
Therefore the miners, who collaborate in the maintenance of the blockchain and in the construction of the blocks, are given a reward consisting of new Bitcoins and certain transaction fees.
In fact, when we talk about a reward for miners, we mean a double type of reward:
- On the one hand, the miner gets a bonus from a number of newly created bitcoins, agreed upon by the network (the value of the bitcoins donated to the miners will be halved for every 210,000 blocks; see also Bitcoin Halving).
- On the other hand, it gets a commission for the transactions validated by the miners.
Therefore, the processing power used to produce valid blocks and the extraction of bitcoins constitute the activity of BITCOIN MINING.
Besides the importance for the maintenance of the transaction database, mining is also the mechanism through which bitcoins are created and distributed to people in the bitcoin economy. The standards of the network are set in such a way that a total of 21 million bitcoins will be created in the next hundred years.This means that the number of bitcoins is limited.
How to mine Bitcoin step by step
Now that you have seen that mining bitcoins is a benefit for the miners who do this activity, if you want to try mining bitcoins too, you can do it. However, it’s not as easy and profitable as you think.
Being a miner has become a very hard task in recent years as more and more complex machines are used to speed up mining operations and compete with large ‘mining farms’ (places with a lot of mining equipment working together). The latter are usually equipped with powerful devices and, at the same time, are located in places where they have cheap electricity (an example is China, where the largest concentrations of bitcoin mining farms are located).
However, if you want to try to extract bitcoins and give your contribution to the chain of blocks of the first crypto in history, I will explain you how to start.
STEP 1: PREPARE YOUR BITCOIN WALLET
To receive the bitcoins you have earned from your mining activity, you must have a virtual wallet, also known as a wallet, in which you will keep your small fortune.
If you don’t know what kind of wallet to use, I suggest you use one that allows you to keep full control of your bitcoins. You may not know this, but many sites that offer free wallets keep control of your crypto-currencies and the money you keep on these platforms is entrusted to third parties.
That’s why I suggest you use a Bitcoin purse that you use to be the sole owner of your bitcoins. So if you haven’t already done so, I suggest you try the Bitnovo bitcoin wallet.
STEP 2: GET A HARDWARE TO MINE BITCOIN
If you thought you could extract bitcoins using your phone or laptop, unless you want to earn less than one euro a year and receive exorbitant electricity bills, this is no longer possible today.
In fact, the use of a GPU has been the least recommended practice for years.
To mine bitcoin you will need an ASIC mining, that is, specialized computers for mining bitcoins.
ASIC (Application Specific Integrated Circuit) is a circuit made for a specific use, which allows to mine bitcoin with a higher speed and power than traditional miners using CPU, GPU or other components.
They are also more energy efficient, consuming less power than GPUs.
In fact, ASIC chips process transactions 100 times faster than a typical GPU stack.
The only drawback is that construction costs are quite high.
Among the latest best hardware for Bitcoin mining we find:
– Antminer S19 Pro
The Bitmain S19 Pro is an incredible hashing that contains 110 th/s and has a power consumption of 3250 W.
– Antminer T19
Launched in June 2020 and produced by Bitmain, this model was designed in an attempt to find a middle way between the price and the hashing power of the Antminer S19 PRO.
The T19 delivers 84 TH/s with a power consumption of 3150 W, making it a more economical and efficient alternative to the S19 Pro.
– Antminer S17+
Distributed in March 2019, it is one of Bitmain’s most popular miners with a power consumption of approximately 2680 watts.
– MicroBT M30s ++
Ranked as the new king of hash on the company’s website, it uses 12-nanometer chips instead of the new 7-nanometer chips seen in rival miners. It reaches 112 Th/s and is extremely efficient at 31 Joules/TH.
STEP 3: CHOOSE A MINING POOL
Unless you are thinking of doing solo mining using the power of your computer, which I do not recommend given the difficulty and high costs, once you have the mining hardware, it is advisable to look for a mining group to join.
Why is it more convenient to join a mining pool?
Because when you join a mining group you share your hash rate with the whole group. Once the pool finds a block, you get paid according to the percentage of power you have contributed to the pool.
Among the most popular mining pools are: Poolin, F2pool, BTC.com, Antpool, Viabtc.
STEP 4: GET A BITCOIN MINING SOFTWARE
Bitcoin mining software is how you connect your mining hardware to the desired mining pool.
If you’re a lone miner, the mining software links your Bitcoin miner to the block chain.
If you mine with a pool, the software will connect you to your mining pool.
If you use cloud mining, you don’t need a mining software.
Extraction software is available for Mac, Windows and Linux.
Below I’ll show you some of the best Bitcoin mining software.
MultiMiner: recommended for its ease of use.
BFGMiner: recommended because it offers the possibility of customization.
Easyminer: considered the best GUI front-end for multi-tool.
Awesome Miner: ideal for centralized management of mining.
STEP 5: MAKE SURE THAT MINING BITCOIN IS PROFITABLE
Once you have set up your bitcoin mining equipment and chosen the mining group to join, I recommend using a mining profitability calculator, such as WhatToMine.com, which will help you find out if mining bitcoin is worthwhile.
Bitcoin mining as a hobby can still be fun and even profitable if you have cheap electricity and can get the best and most efficient Bitcoin mining hardware…
However, mining bitcoin alone isn’t ideal for the exorbitant electricity and equipment costs that are necessary to make a profit today.
Therefore, if you want to get your first bitcoins, the best advice I can give you is to buy them through a page dedicated to buying and selling cryptcoins, since the process is much easier and faster.
If you haven’t done it yet, I remind you that buying bitcoin (BTC) or other cryptomonies in Bitnovo will be the easiest and most practical solution.
In their web or free App you just have to choose the cryptomonnea to buy, enter the wallet number and choose your preferred payment method. A few minutes after confirming the transaction in the blockchain, your bitcoins will arrive in your wallet.