What Is Bitcoin?
Bitcoin mining is a great way to get your Bitcoin. But first of all, let’s understand what Bitcoin is and how it functions. Bitcoin is non-centralized digital currency that is issued via a peer to peer network, which means that every Bitcoin user is a small part of the Bitcoin bank. Unlike traditional currencies, Bitcoin doesn’t have a centralized government that decides when to print the money. Instead, Bitcoin users use special software to solve math problems and issue a certain number a bitcoins in return.
Watch this amazing video and learn the full cycle of bitcoin mining:
Here is another AMAZING infogrpahics explaining how Bitcoin works:
How Bitcoin Mining Works
Bitcoin mining helps running SHA256 double round hash verification processes that validates Bitcoin transactions and ensure the security of transaction and Bitcoin network. Hashes/sec is a measurement of speed at which you mine Bitcoins. In return for your efforts in verifying transaction, you receive bitcoins. They can come as newly issued bitcoins and as the transaction fees. The more hash power you contribute, the more Bitcoins you get.
Step 1 – Bitcoin Mining Hardware or Cloud Mining
In order to start mining Bitcoins, you need to decide whether you want to buy a mining hardware or you subscribe for cloud mining service. Both hardware mining and cloud mining have its advantages and disadvantages.
How To Start Bitcoin Mining (With Hardware)
First, you need to buy a bitcoin mining hardware. Many years ago, you could to mine using your computer CPU or high speed video processor card. But these days are gone. Today, professional Bitcoin miners use Bitcoin ASIC hardware, chips that work 50 to 100 times faster than computers.
Bitcoin mining is NOT profitable is you don’t have access to cheap electricity. In order to solve this problem, many use solar panels to generate cheap electricity. If you want your Bitcoin mining to be profitable, you have to use the latest and most efficient hardware build specifically for this purpose.
If you cannot afford sophisticated hardware (or don’t want to deal with all this tech stuff), consider cloud mining!
How To Start Bitcoin Cloud Mining
Bitcoin cloud mining is the easiest way to start mining Bitcoins. Yet it has its own disadvantages. You can read more detailed cloud mining report here. You should be careful when selecting your cloud mining service as there is a lot of scam. We strongly recommend to read the article above.
Step 2 – Get Free Bitcoin Mining Software
Without special program your hardware is useless. Good news, there are many free Bitcoin mining programs out there. The two most famous are CGminer and BFGminer. These are the command line programs and may be difficult for non-tech people.
If you need something simple and easy to use, you can try EasyMiner. It works on Windows, Linux, and Android.
You may want to learn more detailed information on the best bitcoin mining software.
Step 3 – Set Up A Bitcoin Wallet
You need your Bitcoin wallet in order to receive Bitcoins! There are many online and mobile based wallets, but if you want to have something more solid or traditional there beautiful Bitcoin hardware wallets.
Every Bitcoins wallet has a unique address that has to be secured. That is why you need to enabling two-factor authentication or keeping it on an offline hardware.
If you are looking for a web or mobile based wallets, check our reviews here.
Step 4 – Join a Bitcoin Mining Pool
Mining Bitcoin on your own is not profitable. In fact you will make no money at all (unless you have a big farm and invested millions of dollars into equipment). That is why you will want to join the Bitcoin mining pool – a group of Bitcoin miners that work together to solve a block and share the profit. Here are some of the most famous pools. Note the list below is NOT an endorsement. You have to do your due diligence and there is always a risk:
Now you are ready to go and start your successful Bitcoin mining. If you don’t want to spend time, money and electricity on Bitcoin mining, you can always invest same amount of money into Bitcoin trading.