Mining Bitcoins nowadays takes much effort than how it is three years back. About 80% of the market cap of Bitcoin is already mined and extracting the remaining 20% will be a hard task to take. But if you’re crazy enough to take the challenge of finding the remaining treasure, I listed here some points on how to mine Bitcoin on newbie level.
But before you jump on the wagon, you should understand the level of difficulty you’ll face. You can spend days or even months figuring out algorithms gaining nothing. But mining Bitcoin has never been as exciting as ever now that it’s in a tight competition. If you want to ride on and have the pride of trying it at least once, read on and start mining your own Bitcoins.
1. Get into mining tools
You can’t expect to flood your wallet just because you’re tinkering on your laptop. You need to know what Bitcoin mining hardware pieces are. Before, you can use a basic CPU to get new coins. But that was three or four years ago. Right now, you have to purchase Application Specific Integrated Circuits (ASICs) to increase you hashing power.
When buying one, you should check the hash rate per second of the hardware. Consider models that are electricity efficient since you don’t want to end up paying more on electricity than the Bitcoins you gained. Also, don’t invest on cheap ones as these are less efficient.
2. Secure a Bitcoin wallet
Once you’re lucky to know how to mine Bitcoin, you’ll need a secure wallet to store these. This can be digital software or you can buy hardware like Ledger or TREZOR. If you don’t know how to keep a self-hosted wallet well, I suggest that you avail online storage spaces for security. Desktop software can be prone to hacking if you don’t know how to secure it.
If you choose to have a self-hosted wallet, you should secure a copy of the .dat file of the wallet. This is important so if ever your computer crashes, you’ll have your Bitcoins secured. Otherwise, you’ll have your bounty lost in the realms of your broken device. There’s no way of retrieving it.
3. Jump into a mining pool
Joining a mining pool, which is basically a group of miners, will help you increase the chance of getting more coins. With this, you can share the processing power with fellow miners and increase the income you’re going to get. Such practice is more efficient than mining Bitcoins alone.
If you’re in a pool, the group you’re in will find it easier to create blocks. These are necessary for making new Bitcoins. Once the group mined new Bitcoins, the profit will then be divided accordingly.
4. How to mine Bitcoin? Know the latest news first!
Reading the news doesn’t require any technicality at all. It’s important that you know the latest trends to have a clear vision of where you’re standing in your mining stint. Some news sites offer tips in mining and there might be developments in the mining world that you have to know.
If you’re blind with the news, you’re going to miss an important piece of information that can largely help your mining. You can easily subscribe to any sites for daily updates.
5. Get started!
There’s no point pussyfooting if you’re planning to mine Bitcoins. Get your hands on it because there are only five million Bitcoins left to be mined. If you’re going to wait for a few months, your chances of earning from mining decreases.
It won’t be easy for first-timers but no one gets substantial experience with just reading mining whitepapers. It’s a now or never decision. Sure, you can mine in the future but brace yourself for the cutthroat competition.
6. You might just consider buying instead of mining
Like what I said earlier, mining will eat up a lot of your resources. Many users don’t actually mine their own Bitcoins simply because it entails a lot of technicality and competition. If you think you’re going to spend more than what you’ll earn, I suggest that you just buy the coins and speculate. This process on how to mine Bitcoin might give you bigger income in a shorter turnaround time.
There’s nothing wrong about having to mine as a hobby. As long as you can sustain it without the breaking the bank, you’ll do well.
7. The difficulty level
If you got the right equipment and have deep knowledge about mining, it’s definitely easier. But the difficulty comes to the timeframe. Some experts approximate mining a Bitcoin to take about 250 days. Plus the price of equipment that you’ll need, it might be difficult too in the finance aspect.
If you’re mining in a device other than ASIC, you’re going to reap nothing. Past devices work, but in the competition and technology at this point, you’ll need to invest in the latest ones.
8. Bitcoin mining requires high processing power
This is the reason why I’m telling you that mining Bitcoin will require the most updated hardware. You cannot count on your trusty laptop alone in giving you money. If you try mining Bitcoin with outdated devices, chances are it will crash or go up in smoke.
If you’re serious about mining, you need to invest in equipment first. You can reduce the weight of this if you’ll join mining pools.
9. You have to solve math problems
Bitcoin mining isn’t just a hunting game on the internet. If you want to know how to mine Bitcoin, you have to solve high levels of math problems to create blocks. When this block accumulates, that’s when you can possibly earn a Bitcoin. These aren’t basic math. You should possess the knowledge and technicality of dealing with blockchain technology. If you’re a total dummy, you’ll need to study a lot of things first.
10. Mining is less profitable
Yes, I want to reiterate this. Mining isn’t that profitable nowadays. It will take you almost a year to mine one Bitcoin and you need to spend more with equipment, electricity, and effort. It’s not advisable at this point in time if you’re target is to grow your Bitcoin investment. Just buy the coins instead.
11. You cannot duplicate Bitcoins
Bitcoin is foolproof and no two similar Bitcoins can exist. Even if you’re the smartest cryptographer in town, you can’t do such thing. Many attempts have been made in the past but no one succeeded. The blockchain technology where Bitcoin lies is highly secured. So don’t waste your time figuring this out.
12. You need to have powerful hardware
Powerful hardware is more than just a brand new CPU and a monitor. You have to buy mining hardware that’s made for the purpose of mining Bitcoins alone. These are pricey-I’m warning you- and it can drain your savings if you fail to mine even a single Bitcoin. Investing on cheap ones won’t do your mining any good.
The ways of how to mine Bitcoin is changing over the years. The difficulty too is quite escalating as the gap to reaching the market cap grows smaller. I suggest that you read all these points before you embark on mining coins. Think about it carefully so your valued investments won’t go to waste.