Bitcoin mining is a computational process that achieves two distinct and important goals. First, it allows miners to “find” new bitcoins that are added to circulation. Second, bitcoin miners verify transactions while mining. This helps ensure the integrity of the blockchain, which serves as a ledger of transactions.
Bitcoin mining works by having a computer attempt to produce a string of characters that is less than or equal to a target hash. The target hash is a 64-digit alphanumeric code, and miners are rewarded with bitcoin if they are the first to come up with a solution.
In this article, we are going to cover how bitcoin mining works and whether it is something you should consider. Let’s get started.
What is Bitcoin mining?
Bitcoin mining is the process by which Bitcoin transactions are validated digitally on the Bitcoin network and added to the blockchain ledger. It is done by solving complex cryptographic hash puzzles to verify blocks of transactions that are updated on the decentralized blockchain ledger. Mining is performed using sophisticated hardware that solves an extremely complex computational math problem.
How does Bitcoin mining work?
When a bitcoin miner successfully finds a valid hash, a block is added to the blockchain, verifying the most recent batch of transactions. In addition to preserving the integrity of the blockchain, verification helps to prevent double-spending. Double spending is the phenomenon wherein someone spends the same bitcoin twice. Because bitcoin is a digital currency and not a physical one, you don’t physically hand it over to someone like you would to a cashier at a grocery store. Thus, the blockchain helps prevent people from reusing their coins. Bitcoin aims to add new blocks to the blockchain every 10 minutes; this is how long it theoretically takes to mine one bitcoin. It does this to maintain a steady rate of new blocks.
How to Mine Bitcoin?
How long does it take to mine 1 Bitcoin? One BTC typically takes around 10 minutes to create, although this is only true for strong processors. The Bitcoin mining hardware you use will determine how quickly you can mine. Below we will discuss the steps you can follow to mine Bitcoin.
Choose and Set Up Your Bitcoin Mining Hardware
Start by choosing the hardware you’ll use to mine Bitcoin. While you can use an old computer or laptop, you’re unlikely to earn any Bitcoin unless you invest in a more powerful setup designed specifically for Bitcoin mining. Antminer, made by Bitmain, is an example of a popular cryptocurrency mining hardware. You may be able to find used mining hardware online to save money.
Pick a mining package
After you pick the bitcoin cloud mining hardware and sign up for a free account, you can choose between a selection of mining packages, which will all have different contract lengths, hashing power, and prices. Your package’s price depends on Bitcoin’s current market value, the cost and difficulty level to mine the cryptocurrency right now, and your preferred hash rate.
Create a Dedicated Bitcoin Wallet
If or when you successfully validate a Bitcoin block, you need a valid Bitcoin wallet to get paid. Consider creating a dedicated wallet for your crypto mining activities, separate from any other Bitcoin investments.
You can create one or more different types of Bitcoin wallets, all with varying levels of convenience and security. As a Bitcoin miner, you may want to establish a hardware wallet–the safest kind–for additional security.
Select a mining pool
Once you choose your contract, you can either mine Bitcoin on your own or mine the cryptocurrency with other Bitcoin miners in a group called a mining pool. Joining a mining pool allows you to combine your rigs together and boost your total hashing output.
Kucoin is a large cryptocurrency exchange offering the ability to buy, sell, and trade cryptocurrencies. Kucoin also provides a comprehensive mining platform with extensive experience in mining pool operations and competitive mining technologies.
You’ll have to split your block rewards with the other miners in your pool, but a crypto mining pool usually generates more block rewards for individuals than mining Bitcoin on your own. Most cloud mining companies will ask you to join a crypto mining pool right after you choose your contract.
Configure Your Mining Equipment
Once your mining hardware is in place and you have a Bitcoin wallet, you can install and configure your Bitcoin mining software. This, too, requires some technical knowledge, particularly if you’re linking together multiple hardware miners to boost your Bitcoin mining capacity.
You can start mining as soon as you download a local copy of the blockchain for the cryptocurrency that you want to mine. Once you click the right button to officially start mining, you can go take a break. Your mining hardware can mine crypto 24/7, even while you’re at another job or asleep.