Home > The process of mining Bitcoin

The process of mining Bitcoin

Before describing ins and outs of mining Bitcoin, let’s understand what Bitcoin mining really means. There is nothing illegal in Bitcoin mining and in order to validate Bitcoin transactions and accomplish it, SHA256 double round hash verification process is run. In this way, it provides the necessary security for the public ledger of the Bitcoin network.

Necessary compensation is provided by the Bitcoin network to the Bitcoin miners for their contribution in releasing Bitcoin to those who provide the needed computational power. They pay them by newly issuing Bitcoins and by transaction fees which is included in the transaction validated when mining Bitcoins.

In order to mine Bitcoin, you should, at first, procure the best Bitcoin mining hardware available in the market. In some cases, you’ve to purchase mining hardware with bitcoins. There are many websites like Amazon, Ebay, etc. from where you can buy one.

As mentioned above, you need to acquire Bitcoin mining hardware to start mining bitcoins. Though it was possible to mine bitcoin with computer CPU or high speed video processor card in the early days of bitcoin, now it’s no longer possible. There are Custom Bitcoin ASIC chips that perform up to 100x, but the capability of the older systems continue to dominate the Bitcoin mining industry.

If you try to mine Bitcoin with anything less, it’ll consume more electricity than your likely earning. So, it’s better to use the best bitcoin mining hardware, especially built for that end, to mine bitcoin. There are several companies such as Avalon that offer excellent systems which are built for bitcoin mining.

You may opt for other options; you may buy in Bitcoin mining contracts. This may simplify the process but it has the risk also because you can’t control the actual physical hardware.

After you’ve procured your free bitcoin mining hardware, you’ll have to download a special program to mine Bitcoin. Many programs are out there in the net market, but the most popular ones are CGminer and BF Gminer which are apt for the purpose.

Your next step is to join a Bitcoin mining pool, a group of Bitcoin miners working together for solving a block and sharing its rewards. This is essential because without a Bitcoin mining pool, you might go on mining Bitcoins for over a year but never earning any bitcoins.

After joining a Bitcon mining pool, your next task would be to set up a Bitcoin wallet to receive the Bitcoins you mine. One wonderful Bitcoin wallet is Copay which works on different operating systems.

Doing all these, you shouldn’t take rest. You must also stay up to date with Bitcoin news for mining bitcoin profit.