Bitcoin Mining Explained Simply

Bitcoin Mining Explained Simply: Complete Guide

Bitcoin was first introduced in 2009, it was first of its kind and bitcoin mining was so easy that you could even mine it with your PC. But today the situation is total different if you want to make any profit you have to invest in costly hardware to do so. 

People have questions in their mind like :

How to start Bitcoin mining  or Does Bitcoin mining work ?

 

Bitcoin Mining Content Guide :

  • Bitcoin mining explained simply.
  • How to start bitcoin mining.
  • Cloud mining
  • Pool Mining
  • Alone Bitcoin mining with mining Hardware.

Simple Explanation of Bitcoin Mining

BTC is blockchain based cryptocurrency. Bitcoin is like a virtual currency which breaks the monopoly of banks world. It doesn’t have a central government. It works in a blockchain network with some algorithem program. 

The network is secured by miners, here comes the role of miner who help to check the completion of your bitcoin transactions by solving the BTC blocks. This process is also known as blockchain mining.

how to mine bitcoin
A Bitmain Antminer S9-Hydro ASIC miner

All the transaction are grouped into blocks on network. Miner needs good hashing power to solve the block chain transaction. Miners must guess the hash means the string of characters for blocks. Once miner guessed correct hash it can be added to blockchain. This is called POW “Power of work”.

In simple words miners uses a software to solve a math problem and in rewards get a certain number of bitcoin. And this makes it worthwhile to spend money on mining. 

So when it comes to mining or buying bitcoin than you should know the risks that nothing in this world is guaranteed. So make sure before investment that you have enough knowledge about mining and cryptoworld. 

How to Start Mining Bitcoin - 3 Methods

Lets starts for what you all came here for – there are three methods to start mining bitcoins :

  1. Cloud Bitcoin Mining
  2. Join a Bitcoin Pool Mining 
  3. Mining Alone

Cloud Bitcoin Mining

What is Bitcoin Cloud Mining?

Block Cloud mining is a process in which you buy hashing power on rent from the mining company who has a big mining farm setup. Its simply having someone else to do mining for you.

You are paid for the investment you made with the regular income in BTC. Here you can also invest a less amount. Cloud mining for bitcoin with joining a good company plan. 

As there are many companies claiming to provide best returns in cloud mining, you should well research before investing.

Step One   

Finding a good Mining Company, below are the names of some good cloud mining providers:

  • Genesis mining
  • Minergate 
  • Hashflare 
  • Nicehash
  • Hashing24
  • Minex
  • MineOnCloud
  • Eobot

Above mention are the giants and most profitable companies in the market.

You can check the rating, price, hash rate etc for different companies on CryptoCompare Website.

Step Two

Once you find a good cloud company with good mining contract, you need to choose a package which gives you maximum profit. Better choose a high value package which gives you maximum profit quickly.

But there is also a risk factor, if the mining difficulty of bitcoin increases the BTC profit given by company will decreases. So its better to understand the market trend before investing.     

Step Three

After you join with a cloud mining package, most of the companies will ask you for joining a mining pool. You should join best global mining team to increase the chance earning bitcoins.

After completion of all these steps your cloud mining will be started with in a few days and you will see your account starts filling with bitcoins. Every thing has some advantages and disadvantages, same goes with cloud mining.

Join a Bitcoin Mining Pool

how to mine bitcoin

Pool bitcoin mining is a process in which BTC miners mines together to solve a single block of blockchain to get the rewards which will be shared with all miners as per their contribution in solving the block.

And to do so you need to get into a bitcoin miner pool. Without joining mining pool if you go for mining on your own then it might takes years or even impossible to solve a single block for you. 

That’s why it is good to mine in group so that block can be solved quicker and you can have your share of rewards.

Find out Best bitcoin mining software

There are some steps you need to follow :

Step One : Purchase ASICs Bitcoin Mining Hardware  

If you are in bitcoin mining then you need to find and buy yourself a good hardware to mine bitcoin. Purchase a powerful ASIC miner. There are many ASIC miner in market provided by bitmain

  • Antminer S9 -Hydro
  • Antminer S9i -14.5 TH/s
  • Antminer S9j -14.5 TH/s
  • Antminer T9+ 10.5T
  • Antminer S7

Currently Bitmain’s Antminer S9 and S7 ASIC miners are best in the market.

Now should also make a digital wallet for storing your bitcoins.

Step Two : Joining Mining Pool

Once you find a good ASIC miner and finished setting up your hardware. Now its time to join a good mining pool which have plenty of miners, trustworthy, low fee and have more smaller regular payouts.   

Bitcoin Mining Pool have people who mine together and get rewarded for solving block as per their contributions.

Following pools are trustworthy :

Step Three : Downloading the right software

This is last step to start mining, so its very important to download the right software and synchronize with hardware correctly. 

Select software which supports ASIC Mining below mention are the list of software :

Start Mining….. 

  1. Connect PC to Miner
  2. Log in to mining pool
  3. Start mining with software. 

Mining Alone

Mining alone is for big miners where complete mining is done without any other miner’s involvement. It Means mining without going into a mining pool. 

Solving blocks without any helping hand is not an easy task but all rewards are yours.

What is Mining Alone or Solo Mining

Mining Alone is a solo mining process. When you connects yourself to mining pools what happens is all pool miners connected to same bitcoin block to solve the mathematical problem. 

It helps to solve the block more quicker, more people in pool means more power to solve the bitcoin blocks and the incentives are also shares in between the pool miners.

But if you are doing solo mining, The best option for finding a block is to connect miner to the local btc client. The probability will decrease but you will keep all the rewards.

If you have hardware with several tons of hashing power then it can be used to get more rewards from solo mining but if you have small hardware with small hash rates then you could use pool mining to get your rewards.

How bitcoin Solo mining works ? What you need to do ?

  • First you need is Installation of Bitcoin-core (both GUI and Daemon). Bitcoin core is full node software program
  • Start and it will download complete blockchain with approx. 20 GB.
  • Create a file named as ” bitcoin.conf ” for mining bitcoin. On window file location would be                                            C:\User\yourusername\AppData\Roaming\Bitcoin\
  •  Set your username and password, replace X with username and Q with password
  • Download ASIC miner like CGMiner or  BFGMiner.
  • Finally launch miner software with local host : 127.0.0.1, rpcport : 8332, username, password as you set in bitcoin.conf file.

KNOW ABOUT how to mine other Altcoins like Ethereum, LTC, Dash Click here….

KNOW About GPU MINING RIG…..CLICK HERE….

.…CLICK HERE…. to know best GPUs in Market.

Hope this information gives you an idea how bitcoin mining works and helps you to get start with mining . 

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