If you are new to the world of Bitcoin, you may be wondering how one goes about “mining” Bitcoin, and what that even means. It may conjure up images of the seven dwarves down a mine with their pickaxes, but of course, Bitcoin mining can be done from the comfort of your own home.
One thing to note is that it is quite a competitive area, and as it has become more popular, it has become more difficult to get into. You need to have a decent amount of money to start with in order to make a profit, so that’s important to bear in mind. There was a time when any computer that had a graphics card was able to mine Bitcoins, but now that it has become so competitive, you need an ASIC miner which is a computer built specifically for mining Bitcoins.
As part of the setup, you will need to invest in a safe, secure wallet. There are many different providers of Bitcoin wallets, each with their own set of pros and cons, and so research at this stage is vital.
When you have chosen your wallet, your next step is to join a mining pool. These are groups where miners combine their power in order to be able to mine even more Bitcoins. By joining one of these pools, you increase your chance to actually be awarded any Bitcoins as it would be very unlikely you would get any on your own.
Each person in a pool group is given bite-sized algorithms to solve which go towards the solving of the bigger algorithm which is the end game. This is the best way to be sure of a solid return on your investment and gain a consistent level of Bitcoins. When choosing a pool, it is important to know how they plan on sharing the rewards and the fee charged when you want to withdraw these. You need to see their stats to make sure that the pool is stable and that they are frequently finding blocks.
Your pool will probably have their own mining software, so it is important to ask. Otherwise, there are a load of different mining software options out there that you can explore.
You’re ready to mine! Power up your miner and enter in all your pool details. You will then start with collection shares which are your section of the work towards finding a block. Then it’s just a case of mining and hoping to find a block. You will get paid by your pool if you are lucky enough to find some coins.