What is Bitcoin Mining?
Bitcoin mining 1 bitcoin per year can cost you thousands of dollars. If you are lucky. When Bitcoin was launched in 2009, it was possible to issue the first cryptocurrency mining using a personal computer.
Let’s assume that both resources are limited and make up the dreams and ambitions of many people. We can say that analogies involving bitcoin and gold are not really appropriate. If the Bitcoin miner is lucky enough to achieve this result, a single Bitcoin mining could save thousands of dollars a year. The following guide is an extended helping hand for those looking to try their luck in Bitcoin mining.
In addition to luck, prospective miners need to take into account that today’s demands for Bitcoin mining are completely different than they were in 2009, when it first started. At that time, it was possible to mine Bitcoin using a personal computer. Today, however, more and more miners have joined the Bitcoin race and the market has largely saturated. Nowadays, only those who are ready to make big investments and take important steps can mine Bitcoin.
Three Basic Bitcoin Mining Philosophies
It will be very beneficial for a beginner miner to go back to the basics of mining so that can have the most powerful weapons. There are three dominant approaches to mining, these are:
- Buying your own mining equipment and investing a lot to set aside all the profits for yourself.
- Combining mining resources as part of the mining pool.
- Using cloud mining resources based on subscription model.
The decision you make for the mining budget is directly related to your adherence to one of the three dominant approaches to mining.
All of these approaches contain a range of benefits and weaknesses, depending on what time frame you expect from mining. Let’s look at these options in more detail.
Preparation for Solo Bitcoin Mining
Special equipment prices have mostly adversely affected profitability over the years, with unpredictable ranges of increases and decreases. Due to these negativities, solo mining can be seen as a risky option. The same is true for electricity. But your use may vary depending on the pricing for these types of energy sources in your area.
If you are considering investing in mining, you may want to know the potential profit rates. You can check out Bitcoin mining calculators for this. Available options are CryptoCompare, Crypto Mining Tools and similar platforms. These calculators take into account parameters such as hardware costs, hardware efficiency, electricity costs, mining difficulty, network hash power, and Bitcoin block reward.
You need to provide the calculator with information such as electricity costs in your area, as well as the hash rate and power consumption of the mining hardware you are considering purchasing. Remember that the more information you give to the calculator, the more secure your assessment will be. Also, keep in mind that some countries such as China and Venezuela may score better on investment/earnings ratios. You should also remember that China has already played a big role in the global mining market due to its cheap electricity costs.
These calculators take into account the following parameters:
- Hardware Costs
- Hardware Efficiency
- Electricity Costs
- Bitcoin Mining Challenge
- Network Hybrid Power
- Bitcoin Price Block Award
Having the Best Mining Equipment
Speaking of hardware, learning the prices of Bitcoin mining equipment should be on your to-do list before you step into mining. The golden rule also applies here: “Never invest more than you are ready to lose!” because this will be your worst starting move in this game.
Creating a personal mining rig requires extensive knowledge of the hardware required for mining. So buying Bitcoin from a cryptocurrency exchange may be a more viable option. History books say that CPUs, GPUs, and FPGAs that were originally used for mining, often functioning as specially customized integrated circuits for mining, are dominated by application-specific integrated circuits (ASICs). Manufacturers of these devices include companies such as Cannaan and Bitmain, and the average prices of the devices can range from $ 1500 to $ 3000 and above.
Before embarking on the path of creating a standalone mining rig, there are a number of things you should consider, including:
- Do you have enough space for a rig and is the environment potentially flammable?
- Which motherboard, GPU, processor, RAM and storage device has the most attractive price/performance ratio?
- Do you have enough power supply to meet the electricity needs of mining equipment?
When you can answer these questions, you can go in search of software for Bitcoin mining. Mining is handled by hardware, while mining software is the bridge that gets you to the Bitcoin network and blockchain. Fortunately, considering the hardware and power supply, choosing the right software is easier thanks to popular options such as Bitcoin Miner, BTCMiner, CGMiner, EasyMiner.
The Benefits of Mining and All About It
Solo mining might be a daunting option in 2019. The only benefit is that you can only hold the earnings you earned through mining. However, you may need to purchase hundreds of specialized mining equipment such as the ASIC today and later to protect your profits. With the need to provide electricity to hundreds of mines to compete not only with miners but also with those participating in the mining pool, additional sources of electricity may be required. And this can naturally create a demand for cooling and ventilation equipment.
Therefore, the best option for solo mining is a climate that does not require industrial chillers and access to cheap electricity.
Joining the Mining Pool
Joining the mining pool is often separated from solo mining as a cheaper and accessible option for a Bitcoin miner. Mining pools are made up of miners who join forces and share their profits. There is a fee that must be paid by pool members, but this fee is much lower than when you mine a block of mine alone. At the same time, pools put much less pressure on miners to meet the mining capacity and electricity needs of their mines.
Pool members agree to share mined Bitcoins among themselves, which makes it easier to access regular payments in BTC. Joining a mining pool has several requirements, just like solo mining, including: access to a mine, functional mining software, cooling fans, power supply units, Bitcoin wallet, and internet connection.
In addition to the mining calculators, the pools will provide access to the custom interface. Allow miners to control how long they manage the mining by entering their wallet information.
Pool members agree to share the mined bitcoins among themselves, making access to regular payments in BTC a more convenient possibility. There are several requirements for joining a mining pool, covering the same fundamentals as solo mining:
- Access to a mining rig
- Functional mining software
- Cooling fans
- Power supply units
- Bitcoin wallet
- Internet connection
In addition to mining calculators, pools will often offer access to the private interface. It will allow users to control how long they will manage the mining by entering their wallet address on the pool’s website.
Things to Consider When Joining a Pool
To choose the best mining pool for your needs, you should consider some of the criteria pools have. These criteria are:
- Pool size: Larger pools will have more miners and, along with this, increase your chances of getting rewards in BTC. However, splitting the earnings in a larger pool of miners potentially makes them smaller but more orderly.
- Fees: Pools charge fees for providing infrastructure and regulating mining. Usually a deduction from 1% to 3% will be made automatically from the profits you make. You should be careful with pools that promise zero commission fees to miners and think twice before joining.
- Supported minimum payments: Refers to the minimum Bitcoin rate required for a miner’s withdrawal. It is recommended that beginner miners opt for pools with a lower minimum payout threshold.
Popular mining pool options include AntPool, Slush Pool, BTC.com, F2Pool. In order to avoid dishonesty, it would be beneficial for you to avoid newer and unofficial pools. Popular mining pool options include AntPool, Slush Pool, BTC.com, F2Pool. It is in your best interest to avoid newer and unofficial pools to avoid dishonesty.
How to Do Cloud Mining
The third option Bitcoin miners have is cloud-based mining platforms. In cloud mining, you have to buy a data center that will extract BTC on your behalf. This option has a number of advantages, such as eliminating the need to invest in expensive equipment. In cloud mining, a fee is charged by the data center that reduces your profits but offers you a guaranteed return on investment. Whatever the case, we recommend that you pay attention to user comments before choosing a cloud mining solution to avoid being scammed.
Many users may be opting for cloud mining to avoid the hassle of solo or pool mining. However, in cloud mining, you won’t have to worry about equipment failures and you won’t have a chance to upgrade them. Finally, if all of the above seem pretty scary and complex to you, remember that cloud mining is a beginner-friendly option.
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