So you have decided to join the crypto world. Maybe it feels like being a bit late for a party, but trust us, it is never too late to join the winning side. And cryptocurrencies are growing and are here to stay. They are going to be prevalent in the future. But trying to mine bitcoin these days might be a bit scary to some. It did get a bit more complicated, a bit harder than in the start. So if we want to profit from mining bitcoin, what do you need to know from the basics? Here are ten things you need to know for beginning this adventure.
Table of Contents
1. The basics of mining Bitcoin
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So you are ready to mine and get some valuable coin. For that, what is necessary is a device that is specifically made for solving crypto algorithms and puzzles. The way it works in the bitcoin world is that one puzzle is open every ten minutes. Only one computer can get to solve that puzzle and harvest the rewards of it. Bitcoin is quite decentralized too. That signifies that all the transactions are transmitted to the peer-to-peer network. Verification is necessary, and after that, transactions are posted and on the public transactions database. That one is also recognized as Bitcoin blockchain.
2. Getting good hardware
A lot is different from the early days of mining. Back then, all we needed was a good PC and a better graphic card. If someone tries to mine bitcoin on his PC or a laptop, they would have a hard time getting anywhere. Not impossible, but hardly profitable. So what is next? How did mining evolve from CPUs? Today, we use Graphics Processing Units or GPUs. These extremely good graphic cards are much better at mining when it comes to bitcoins. And they will also help you with electricity bills, which are still important.
3. Power consumption could be a problem
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So we have our hardware now. Maybe you thought that is where investments stop, and it is all money-making from now on. Not true. Power consumption is still a problem. To mine bitcoin, large quantities of electricity will need to be spent. So one of the things we all have to think about when deciding to embark on this journey is how expensive electricity is in my country?
4. How difficult is mining
As the number of miners is getting higher, the rate of block creation is also developing. That drives us to quicker mining. And when that occurs, mining difficulty is also getting bigger, bringing the block creations to the perfect ten minutes that we already told you about. As the mining challenge is getting harder, the time required to do it successfully is returning to normal, and the cycle itself is happening, again and again, every 14 days. So the long story short, the mining difficulty is inversely proportional to the actual value of the coin.
5. Something to be concerned about
img source: cointelegraph.com
We don’t want to sugarcoat it too much. Some problems are concerning. First of all, the market itself was never under so much pressure for centralization. Decentralization is significant for Bitcoin, and to centralize it would prove troublesome as the safety of the network could be in dispute. Even more concerning is that nobody wants to have one side imposing their will and desires upon the rest of us. That is especially true when it comes to governments, and those are the ones that are forcing the centralization.
6. Scammers will always exist
Scammers are always going to be interested in those industries that are profitable. In that way, it is almost flattering for the crypto industry to attract them so much. There was a firm in the Philippines that scammed a lot of people from their money this year. Eventually, the scammer is detected and brought to justice. But that means little to those who suffered already. That is why it is crucial to be extra careful, read up, check every company, and be even more careful when something seems too good to be true. Because very often, it is a scam.
7. You are going to need a Bitcoin wallet
img source: blockchain.com
Once we have finished with the necessary research and got all the right equipment, it is time for some software that is going to be vital for us. Getting a good Bitcoin wallet will let you accept your coins and control the Bitcoin addresses since, as we remember, bitcoins are nominally collected in the Blockchain. There are multiple wallets out there, so it is up to you to see which one suits you the best. Very similar to real-life wallets, so we know their name was not an accident.
8. What is PoW
One of the things that might be confusing to someone new is PoW. That is short for Proof-of-Work, and it is a protocol made by the Bitcoin network, with the sole goal of finding out who gets to claim the reward for the mining. The protocol is actually a complicated mathematical equation, so far beyond our comprehending. What we do understand is that the mining process will make our processor exhausted, therefore the high electricity bill.
9. Join a mining pool
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As mining alone became harder, mining pools came into existence to help out the little guy. In these pools, all of the user’s strengths are joined. That makes it possible to reap the rewards more consistently. Naturally, the rewards are shared as well, but a piece of pie is better than no pie at all.
10. Select your mining program
Once you get everything else we mentioned, you need to pick a client to use. That mining program will be a link between you and the Blockchain. With a good selection, you will be able to also monitor various statistics, like the warmth of your hardware, hash rate, mining quickness, and others. Many of these programs are free, which is good for a beginner. The thing to be aware of is that some mining pools have their program. So maybe choose those two together.
As we saw, there are a lot of things we need to be aware of before we start mining. No matter do you want to read up on more details, or you are ready to get some of that software we mentioned are vital, check out bitcoineranew.com/login. The adventure you are about to embark on might not look easy, but it can certainly be both exciting and profitable.
