How the heck do I mine bitcoin? Can I make money from mining bitcoin? What are the requirements? Relax, keep reading you will find the answer to these questions and more insight concerning bitcoin mining.
The functionality of the bitcoin network rests on the shoulders of bitcoin miners. Bitcoin mining is carried out by the help of high-end “super” computers with the ability to solve complex mathematical computational problems that avail them access to chain blocks of transactions together – How to mine bitcoin?
Why exactly should I do it?
This is the question on the lips of almost everybody that has come across the term, “bitcoin mining”. The primary catch for many people who mine is the fact that mining has the prospect of rewarding them with bitcoin tokens. Apart from this, other benefits are security and confirmation of transactions. Miners are rewarded with new bitcoins every ten minutes. This issuance rate is set; therefore, miners cannot play a fast one on the system or manufacture bitcoins from nowhere.
Truth be told, it is stressful, capital-intensive (too expensive to say the truth) and only gives irregular profits (or return on investment). It is thus not advisable for everybody to mine. If you still want to go ahead to go into it as a business or for fun, you can follow the steps below to get started.
Find out if it is legal in your country.
In most countries, bitcoin mining should not be an issue. You can seek counsel from legal practitioners in your country to determine if it is legal or not and the tax implications associated with bitcoin mining. Also, check if bitcoin mining is profitable for you. You can make use of bitcoin mining calculators on the internet to get a rough estimate.
Acquire your Bitcoin Mining Hardware
There is no mining that can take place without ASIC (Application Specific Integrated Circuit) miner. Do not even think about mining on your laptop or desktop computer! You will not only waste a large portion of your resources on electricity but will also not make a dime as profit in a year.
ASIC miners are specialized bitcoin miners or machines. The sole aim of building these computers is for the mining of bitcoins.
Choose a Mining Pool
After getting your mining hardware, the next step of action is for you to choose a mining pool from the available ones. Think of a mining pool as a group of people coming together to crowdfund a business and they share the profits they make from the business. If you do not have a mining pool, you would only be rewarded when you create a block of your own. This is also known as solo mining. This is strongly not recommended because the hash rate of the hardware you purchase is most likely not sufficient to find a block of your own.
Obtain Bitcoin Mining Software
Each Bitcoin is basically a computer file which is stored in a ‘digital wallet’ app on a smartphone or computer. People can send Bitcoins (or part of one) to your digital wallet, and you can send it to other people. Every single transaction is recorded in a public list called the blohttps://fintechzoom.com/blockchainnewsckchain.
Presently, there are several types of wallets and some of them possess certain features that distinguishes them from others. With a wide range of available wallets, it can really be daunting deciding the particular wallet to use.
Below are some types of wallets and some of their features. These wallets include:
- Coinbase: This is the most preferred wallet to use. It offers an easy way to purchase, sell and also store crypto coins.
- Trezor wallet: This wallet is popular as the wallet that offers the highest security. It is a mobile device that is usually plugged to a computer to access the coins.
- Electrum Wallet: This is a software wallet which is the best wallet to use on your desktop computer.
- Robinhood: This is a new wallet which started as a free stock trading platform. It provides storage and also serves as an exchange platform.
- Other types of wallets are blockchain, exodus, Mycelium.
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