How do I mine bitcoin?

Mining is of course a vital piece of the jigsaw when it comes to cryptocurrency, and one of the questions we get asked a lot is how do I mine bitcoin?

The first question we must answer of course is what is bitcoin mining, and you can find the full answer to this question here . But in short, bitcoin mining is the process in which records of transactions are added to its public ledger. This is carried out by miners, who use their computers and specialist mining hardware to complete the task in exchange for rewards in the form of bitcoin.

Whilst it is becoming more difficult and more expensive to mine bitcoin, it can still be a very profitable activity if done correctly.

In the beginning mining bitcoin was a very simple procedure and could be done with nothing more than a laptop or a home PC. Nowadays more powerful equipment is needed.

The first thing you will need is a powerful computer and some special bitcoin mining hardware. The hardware required is a GPU (graphics processing unit) miner, or an ASIC (application-specific integrated circuit). The price of these varies from around the $500 mark right up to more than $10,000. Of course, as with most things you tend to get what you pay for, so it’s always better going for something more high end.

Once you have bought your bitcoin mining hardware you will need to download the mining software. There are a number of different free software packages available, although one of the best for beginners is EasyMiner, which is quite simply a click and go software.

When you have the hardware and the software set-up then the best thing to do is to join a bitcoin mining pool. To put it simply a mining pool is a group of miners working together to solve the problem, and then of course sharing the reward at the end. This process makes more sense, as if you’re mining on your own then you’re less likely to receive any reward at all for your efforts.

Of course if you are going to be mining then you will need to set up a bitcoin wallet to receive funds to. If you have not yet done that then you can find details on how to do this here .

One of the main things to think about if you want to become a bitcoin miner is will the earnings outweigh the costs. As well as the cost of the equipment it’s worth noting that the electricity costs of mining bitcoin are also very high, so it’s worth checking this out before proceeding. There are some website out there that can do the calculations for you.

There are also some amusing stories out there such as the Russian scientists who planned to use the county’s biggest super computer to mine bitcoin, or the Chinese school teacher who hooked up all of his school’s computers to mine bitcoin when the students went home.

As well as mining bitcoin another option is of course to mine other cryptocurrencies. There are many others which have a similar mining system to bitcoin, and in some cases can turn out to be more profitable. It’s something that is worth researching, as most coin’s websites will also contain a guide on how to mine.

There are even some coins out there that can be mined without any hardware; they require just a laptop and an internet connection. Of course you are not going to get rich this way, but it’s a fun way to learn about mining and to try it for yourself without any risk.

Another thing to remember is that like anything to do with cryptocurrencies there is a certain element of risk involved. Particularly if you decide to mine bitcoin on your own then there is always the chance that you could end up with nothing to show for your efforts and cost, so like anything don’t invest more than you can afford to lose.

Ian Scarffe

About the Author:

Ian Scarffe is a serial entrepreneur, investor, key opinion leader and Blockchain consultant with business experience from around the world.

As a leading entrepreneur, Ian is on a personal mission to develop a culture of entrepreneurship, helping startups achieve their full potential as well as helping to expand existing companies.

Ian has founded ‘Binkplus’, a startup incubator in Europe. Ian is an Independent Expert at the European Commission – Horizon 2020

An expert in Startup, Investment, Fintech, Web3 and Blockchain industries. Ian currently consults and advises for a range of multi-million dollar companies.

Ian’s overall mission is to foster a society of economically independent individuals who are engaged citizens, contributing to the improvement of their communities across the world.

Ian Scarffe has written two books to help others:

The Ultimate Guide to Bitcoin and Cryptocurrency 2018 Blockchain Basics 2020

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