Beginners guide to Bitcoin mining.
January 23, 2019 5:33 am,
Bitcoin Mining has become one of the widely used and highly favored methods to earn quick money in the digital realm. All you have to do is solve a block and then you get the appropriate reward. The reward is, of course, the bitcoins. But the process is not as easy as it sounds. You need to possess certain tools in order to start mining and earn a decent amount from it. Bitcoin is built on the blockchain mechanism and the duty of the miners is to solve each block, which will be in the form of a mathematical problem.
How does Bitcoin mining work?
Miners will have to solve each block and in return, gets bitcoins as a reward. In the beginning, miners used their CPUs and normal computer systems to solve a block. But as more and more miners began to mine, the size of the blocks also increased. So, the common computers took too much time and electricity to solve the problems. Graphics cards were used for some time, but that too seemed inefficient. Later, chips were modified and used. ASIC (Application Specific Integrated Circuit chips) have made a huge difference and increased the mining speed manifold. As the popularity of the mining process increased, the number of people interested in mining also increased. This led to the mathematical problems becoming more and more difficult, and unable for a single person to solve. This led to the start of Bitcoin mining pool. A group of miners could solve a problem quickly.
Hardware and software requirements
As explained earlier, the normal computer system is insufficient to solve blocks in the blockchain mechanism. So, it is better to purchase bitcoin mining software. It consumes comparatively less electricity and is also much faster. Some of the best hardware are AntMiner S7, Avalon6, and AntMiner S9. Coming to the software part, there is free Bitcoin mining software available in the market. The most popular one is the BFGminer.
After installing software and hardware, the miner has to join a bitcoin mining pool. The rewards are shared among the members of a pool. The most important part of bitcoin mining is to set up a bitcoin wallet. This serves as a storage place for all the bitcoins you receive as a reward. There are both hot wallets and cold storage wallet. Hot wallet lets you store coins online while cold storage allows offline storage. One has to choose a bitcoin wallet with much care and opt ones that offer maximum security. There is a transaction fee when it comes to blockchain and this transaction fee the user’s pay comes around as a reward for the miners. Also, mining ensures that every transaction that is carried out in the platform is legal and legit.
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