A Quick Guide To Mining Bitcoin
Mining Bitcoin is quite technical, especially for the layman. It takes research, practice and dedication, but it is also highly rewarding, and if the price of Bitcoin is high enough, Bitcoin mining can also be lucrative.
There's a lot of technical jargon that will be foreign to the layman, so getting to grips with Bitcoin mining terminology is always a good idea.
If you have your mind set on mining Bitcoin, there's a few things you should consider first of all.
Use a Mining Profitability Calculator
For anyone interested in mining Bitcoin the first thing you should do is see if it’s worth your while. If mining Bitcoin isn’t profitable, there’s not much point unless you’re just happy to help secure the network.
Mining profitability depends on a few factors, so use a mining calculator like CryptoCompare’s, put your exact details in and it will give you a roundabout profitability estimate. If mining Bitcoin is profitable for you, then it's definitely worthwhile.
Related Reading: Which Mining Pool Should You Join
Invest in The Best Mining Equipment You Can Afford
If you think it’s worthwhile, the next thing you should do is look into getting a mining rig. Gone are the days when you could mine Bitcoin on your laptop. You can mine Bitcoin with GPU but you won’t be able to compete with the powerful ASICs mining rigs, so for the best return I'd invest in a powerful ASICs rig.
ASICs mining hardware is designed especially to mine Bitcoin. It is the most powerful mining equipment going and the newer rigs are said to be able to hash up to 110 TH/s. They are costly, but if you’re serious about making more BTC, you should get an ASICs rig.
As well as you mining hardware you’ll need all the parts to go with it, making sure you have enough ventilation so to keep them from overheating.
Join a Mining Pool
Once you have your mining rig all set, you need to join a mining pool. Satoshi Nakamoto mined the first bitcoins on his laptop back in the day. Nowadays, you won’t even earn much with a powerful ASICs rig if you decide to mine solo.
Join a mining pool so you and thousands of others are clubbing together and enhancing your chances of earning some of the Bitcoin block reward. There are many mining pools and some of them are scams, so be careful. Take a look here for a more in-depth review of mining pools.
Get a Reliable and Secure Bitcoin Wallet
Then you want to set yourself up with a secure wallet. Mining pools do have their own wallets, and they are pretty secure, but personally I wouldn’t leave them in there too long.
I withdraw mine every so often and store them on my Trezor hardware wallet for maximum security, or send them to the exchange if I need some cash. A good desktop wallet id the Electrum wallet. I don't use it, but I hear many people recommend it.
Join Reputable Exchange and Start Mining Bitcoin
Joining a reputable exchange is a must. There are dodgy exchanges out there, but the days of only buying and selling on shady exchanges are thankfully long gone.
I also like Paxful. It’s a bitcoin marketplace, and you can buy and sell Bitcoin on there for anything someone is willing to exchange for. So, if you’re willing to accept say, Amazon Gift Cards, you will be able to negotiate a better deal, because the person on there is obviously wanting rid of the gift card, so you will likely get a 10-20% premium on the exchange.
Bitcoin mining can be profitable, but it's not always. It depends on a few factors and not just the price of Bitcoin. It depends on the amount of miners mining, the mining difficulty, the electricity costs, and of course the fees the mining pool will take from you.
That said, it is a fantastic hobby, or profession if you so wish, and as well as earning BTC, being a miner means you’re helping to secure the future of money.
Author: Tommy Limpitlaw