Sunday, 27 May 2018

Bitcoin Mining, Everything You Need to Know

When it comes to earning bitcoin then one of the easiest ways this can be done is by mining bitcoin. Sometimes you can mine bitcoin and other times you might want to mine altcoins and then trade them for bitcoin.

In this article, I will be showing you how to mine bitcoin

How Bitcoin Mining Works

Mining Bitcoin requires special software to solve mathematical problems, in exchange for solving the equations miners are issued a certain number of bitcoins in return This provides a smart way to issue the currency and also creates an incentive for more people to mine.

What is 'Bitcoin Mining'

bitcoin mining
Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the block chain.

Anyone who has the right equipment and access to the internet can participate in mining and earn bitcoin. The mining process involves compiling recent transactions into blocks and trying to solve mathematical equations.  The participant who first solves the equation gets to place the next block on the block chain and claim the rewards.  The rewards, which incentivize mining, are both the transaction fees associated with the transactions compiled in the block as well as newly released bitcoin.

You are able to Mine Bitcoin using your own Hardware from the comfort of your own home or even rent mining equipment from cloud providers so that you can mine using a mining pool

Bitcoin Mining Hardware

CPU Bitcoin Mining

When bitcoin was first introduced then mining with a CPU was the only way to mine bitcoins and was done using the original Satoshi client. In the quest to further secure the network and earn more bitcoins, miners innovated on many fronts and for years now, CPU mining has been relatively futile. You might mine for decades using your laptop without earning a single coin.

GPU Mining

About a year and a half after the network started, it was discovered that high-end graphics cards were much more efficient at bitcoin mining and the landscape changed. CPU bitcoin mining gave way to the GPU (Graphical Processing Unit). The massively parallel nature of some GPUs allowed for a 50x to 100x increase in bitcoin mining power while using far less power per unit of work.

While any modern GPU can be used to mine, the AMD line of GPU architecture turned out to be far superior to the nVidia architecture for mining bitcoins and the ATI Radeon HD 5870 turned out to be the most cost-effective choice at the time.

Bitcoin Mining Conclusion

If you plan to Mine bitcoin yourself then it's going to be important that you have some background experience with hardware. if your hardware fails then you won't be able to mine - this is one of the reasons why many prefer to mine using cloud providers and mining pools. If however you can look after your own hardware and are somewhat tech savvy then mining for your own bitcoin is going to be the most lucrative - if you decide to stop mining then you have the equipment to sell.