Bitcoin mining is one of the best ways to make good money in the crypto world. Bitcoin is and still is the most expensive cryptocurrency in existence, which makes it especially desirable. The high computational complexity limits the fast generation of BTC currency, the process is stymied by the limited power of typical home computers and even graphics processors.
We are going to deal with several questions about bitcoin mining that many newbie are interested in. We will talk about what mining is in principle and how it is done. Also, let’s look at what equipment we can use for this interesting process. And, of course, we will pay attention to the ways of bitcoin mining that exist at the moment.
What is Bitcoin Mining?
Well, first of all, it is mining any cryptocurrency using special equipement. If the price of gold is proportional to the number of resources used to mine it, the value of bitcoin depends on the power of the miner’s equipment. Many miners simultaneously solve a mathematical problem by guessing the hash. A hash is the header of a transaction block. Each block references the hash of the previous block.
The task of the miner is to match the key to a particular hash of a block or transaction. Once the key is matched, the transaction is considered closed and the miners can move on to match for another committed transaction and another block. The miner who picks up the key first is rewarded by the system in the form of bitcoins. The security of bitcoin’s appearance and transactions is based on cryptographic algorithms.
Miners can work alone or in pools to earn mining rewards. Bitcoin mining requires a lot of computing power, and pooling miners is a way to mine the cryptocurrency more successfully. Bitcoin mining pools connect many computers into a single network, and when the pool confirms the block, the reward in bitcoins is shared among the participants. However, we will talk about pools a little later when we list mining methods.
Bitcoin Mining Equipment
Anyone can mine bitcoin even with their home computer, but it would take a couple of decades. The fact is that you simply do not have enough computing power. That is why most of the mining is done with video cards or special equipment called ASIC.
This method has long been popular among miners. However, having one video adapter is practically unprofitable. To increase the power of the equipment, you need several at once – at least six or eight.
One of the main advantages of video cards is an easy adjustment to any algorithm. In addition to this, of course, the price, easy repair and a good warranty. In some way at the moment, graphics processors are a tool for beginners with a limited budget.
These modules allow miners to manually change the configuration of the circuit, adjusting it to a specific task.
The performance of these modules is not much different from the power of video adapters. Their advantage is that they do not need to be cooled, unlike other types of equipment.
In its essence, an ASIC is an integrated circuit designed to solve a specific task, in this case: mining bitcoins. This is more advanced equipment, it has a narrower specialization. It is good for solo mining as well as for industrial-scale mining.
Some may consider this a disadvantage because most ASICs are not able to earn other cryptocurrencies. But such devices cope with bitcoin mining much more efficiently and are tens or even hundreds of times faster than the usual video cards and processors.
Methods of Bitcoin Mining
There are three main ways to mine cryptocurrency. Let’s talk more about each of them.
- Cloud mining
This method of mining cryptocurrency is considered the easiest. A user rents computing power for a fee at a remote data center and receives a portion of the mined coins in return. This is a great passive income option for those who just want to invest and get payback right away.
- Solo mining
The most popular method is slowly outliving itself and becoming unprofitable. In this case, the miner himself collects and configures the equipment, and then tries to solve the problem.
Every year mining becomes more and more difficult, so people use more powerful equipment. Today only a few use solo mining, preferring to team up in teams.
It is also worth mentioning that this method has been almost completely superseded by mining hosting. All is that when using such services, everything is done for you by professionals. Maintenance of your equipment, premises, security, and so on. You just remotely monitor the work and make a profit.
- Mining Pool
This is what we mentioned earlier when we looked at the essence of mining. This way of mining allows you to combine the power of multiple equipments and find solutions to problems faster. At the heart of the pool is a server that sends out tasks with simpler conditions to team members.
We can observe that mining cryptocurrency, and bitcoins, in particular, is the most flexible thing. There is more than one way to do it and different equipement with which we can mine bitcoins. We have detailed the different options, which you can further familiarize and choose for yourself the one that you like. But remember, this business is not easy, and it will take you some time to become an expert in this area.
How long it will take to mine 1 Bitcoin?
You cannot mine just 1 Bitcoin, instead crypto miners will mine one block, with the reward set at 6.25 BTC per block. Each Bitcoin block takes 10 minutes to mine. This means that in theory, it will take just 10 minutes to mine 1 BTC (as part of the 6.25 BTC reward).
Can you legally mine Bitcoin?
You may want to look into local regulations where you live, but for now, bitcoin mining is legal in the U.S. and most other countries, but not all U.S. states allow it
How do I start mining for Bitcoin?
How To Mine Bitcoin
- Choose and Set Up Your Bitcoin Mining Hardware. Start by choosing the hardware you’ll use to mine Bitcoin. …
- Create a Dedicated Bitcoin Wallet. If or when you successfully validate a Bitcoin block, you need a valid Bitcoin wallet to get paid. …
- Configure Your Mining Equipment. …
- Start Mining.
Does it cost to mine 1 Bitcoin?
In a recent report seen by Decrypt, investment bank JPMorgan estimates that the production cost to mine one Bitcoin has dropped from $24,000 at the start of June to just $13,000. Bitcoin’s production cost is an estimate of the average cost for mining one Bitcoin per day.