To know more about Bitcoin, check out our article, Bitcoin: Now or Wait?
As we know that today Bitcoin mining has become very competitive because of the increase in the difficulty of mining due to the rising value of Bitcoin in the past few years, making it very profitable. Thus, it is important to figure out few things before anyone starts Bitcoin Mining.
So let’s look into steps that are needed to be taken in order to start BItcoin mining.
1. Is it Profitable?
The ultimate goal of all the Bitcoin miners is to mine as many Bitcoins as possible in order to gain more profit. But before starting the Bitcoin mining, it is important to understand whether the whole process of Bitcoin Mining will be profitable to the miner or not.
The various expenses that are included with Bitcoin mining are:
- Equipment (or Hardware) Cost – Buying a good mining hardware.
- Electric Cost – Mining process requires a large amount of electricity, thus depending on the local electric cost (kW/hour) the overall expense of mining will have an effect.
- Cooling Cost – Mining Hardware gets superheated, so it is important to have a proper cooling equipment to maintain its temperature, especially if the miner lives in a hot country.
- Mining Pool Fee – Some mining pools have certain fees that are deducted from the miner’s share of the reward.
Thus, after recognizing the various costs related to mining one can decide whether he or she has the budget to get involved with Bitcoin mining or not.
2. Choosing proper Mining Hardware
Mining Hardware plays a vital role in the whole process of Bitcoin mining. It determines how smoothly and efficiently the complete mining process will occur.
Thus, depending on one’s budget choosing a proper Mining Hardware is important.
3. Joining a Mining Pool
As the difficulty of mathematical algorithms Bitcoin and get a profit. So in order to make Bitcoin Mining profitable, Mining Pool was invented. In mining pool, a group of miners forming a network will mine Bitcoins together and whatever reward is received is then split among the users according to their share of work for solving the problem.
The largest mining pools in the world are controlled by China accounting for approximately 70% of the world mining pools. It is also credited to provide with some of the best mining pools in the world. Some of the mining pools are:
- Ant Pool (China)
- Bixin (China)
- Slush Pool (Czech Republic)
- BW Pool(China), etc
4. Get a Mining Software
The next step to be taken before a miner can start mining is to get a proper Mining Software that is required to run on the computer so that it will control and monitor the mining process. The mining software depends on the mining hardware that the miner has. At times mining pool have their own mining software but that is not the case all the time, thus making it important to choose the right type of mining software according to the mining hardware in order for the mining to be successful.
BFGminer, Bitminer, 50miner, etc are few of the example of mining software that is available in the market.
Once all the above steps are completed, the miner can start the mining by connecting the hardware to the power supply and also connecting it with the computer consisting the mining software using USB. After that, the miner has to open its mining pool account by entering required details and hence the mining will begin.
Bitcoin Mining can be profitable if done after gathering proper information, getting correct types of equipment and being highly involved in the whole mining process. We can understand from above information that Bitcoin mining can be expensive and also time-consuming. Thus, before committing to Bitcoin it is important for a person to understand all its aspects, money requirements and risks.
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