At the time, even individual miners using their regular computer could discover blocks—earning 50 BTC apiece by doing so. However, as the popularity of Bitcoin mining grew, miners began looking for ways to get an edge on the competition—and thus GPU mining was born. In , people began hooking up large arrays of graphics processing units GPUs to mine Bitcoin—which, according to mining consultancy firm Navier, yields a six-times efficiency improvement over CPU mining. But the era of GPU mining was short-lived.
In , it was found that a specialized type of hardware known as field programmable gate arrays FPGAs could be designed to mine Bitcoin with even greater efficiency. This type of hardware ran the Bitcoin mining roost until , when it was usurped by application-specific integrated circuit ASIC miners—which still dominate to this day. You will almost certainly need an ASIC miner, unless your acquisition and electricity costs are negligible.
The most important of these is your hardware. More powerful hardware can crunch the calculations required to discover Bitcoin blocks much faster—thereby earning you more rewards. The next most important consideration is your electricity costs. Cheap, reliable electricity can help to maximize your mining yield, since electricity costs will be your primary expense. Moreover, you will need to factor in your maintenance costs, such as cooling, modifications, installation costs etc.
Find out more about the profitability of Bitcoin mining. Before you get your Bitcoin mining hardware up and running, you are going to need to choose the mining software for your computer. This is used to control which mining algorithm you want to work with, which pool you will use, and acts as the hub for controlling your miner. Though these all offer the same basic utility, they can vary considerably in both their efficiency and the additional features they offer.
When selecting your mining software, these are some of the basic considerations you will want to make:. Oftentimes, Bitcoin mining software can be downloaded and used free of charge. However, you will often find that these software programs offer additional features for a fee or donation , while those that are the simplest to use and setup come at a cost. Find out more about the best Bitcoin mining software available in A Bitcoin mining pool is a coordinated group of Bitcoin miners that work together to improve their odds of successfully mining BTC.
The combined efforts of a large number of Bitcoin miners ensures that they are able to discover more blocks than when working alone and hence generate a more stable income. While it is possible to mine Bitcoin solo, doing so is unlikely to ever yield any rewards—unless you are packaging some serious hardware.
Instead, with Bitcoin mining pools, everybody aligns their mining power to the same purpose for the common good of the pool. When mining Bitcoin as part of a pool, you will share in the rewards generated by that mining pool in proportion to your fraction of the hash rate controlled by the pool.
Choosing which pool works best for you will mostly come down to personal preference. But in general, the larger the pool the more consistent your income will be. On top of this, you may want to consider pools based on their task assignment mechanism, minimum payout threshold, fee schedule, and transparency, among other parameters.
Additionally, it is important you consider pools that are attempting to help the ecosystem grow. Cloud mining is rapidly gaining popularity as a simpler alternative. However, their reliability is yet to be seen. Running a pool is expensive. There are lots of computer systems and data center space that need to be paid for. When talking about how to mine Bitcoin, mining alone is possible. It probably seems like the best idea. Even if you have more computing power than every single miner in every pool, do you have more than the entire pool combined?
Probably definitely not! That said, if you are a multi-millionaire , you could set up a profitable solo mining operation. To run hundreds of computer chips will take a whole lot of electricity. The best possible way how to mine Bitcoin now is with the help of the DragonMint T1 miner. This runs at 1,W. To make matters worse, running hundreds of computer chips gets hot. Think about using a laptop for a few hours on your knee. They can get pretty warm, right? The average laptop runs at around 60W.
Now, imagine of these bad boys running at once in a small room. That means more power consumption! One of the concerns that will occur on your way to learn how to mine Bitcoin is the noise. With the constant buzzing of hundreds of computer components , plus industrial-scale cooling facilities running 24 hours a day, a professional scale solo mining operation is going to be hellishly loud!
The top Bitcoin mining locations today are Iceland , rural Canada , and Russia. You might ask why someone would bother spending the huge sums of money on expensive mining equipment to rent it out to someone else.
The reason is simple. They want to guarantee profits on their investment and not have these affected by swings in the price of Bitcoin. The concept seems strange , but some people choose how to mine Bitcoin in this way. The company might require you to pay for damage done to their equipment! If the price of Bitcoin drops considerably, you might be stuck in a contract and mining at a loss until the price increases again if it ever does. You take all the risk as the cloud mining operator is guaranteed a profit.
In July of , Genesis Mining was hacked. That way, if the market takes a dramatic downturn, you can sell your position. Looking for more in-depth information on related topics? We have gathered similar articles for you to spare your time. Take a look! Wondering how to buy Ethereum? Find out how and where to do so - right in this guide! Wondering where and how to get some NEO coins?
Find your best places to buy NEO Coin with clear instructions on how to do that! Wondering how to buy NEM cryptocurrency? So, you probably want to start mining Bitcoin already? There are a few things that you must have before you begin:.
The specific setup options will vary depending on the model of ASIC miner you are using. The manufacturer should detail exactly how to do this in their user manual or on their website. The following guide is specific on how to mine Bitcoin with the Antminer S9 unit on the Antpool. However, much of it will be useful no matter what ASIC miner you decide to use.
Find the power draw of your ASIC. This should be clearly stated in the manual under specifications. The S9 uses 1, Watts. Match your power supply units to the power draw. Make sure all the necessary connections are made then power up the power supply.
Your Antminer S9 should now come on. On your computer or mobile device, use an IP scanning tool to show the devices connected to your internet connection. You should see your Antminer listed. You can then type the IP address of the Antminer into your browser window on your chosen device. The next screen you see should be the login window of the miner. In the case of the Antminer S9, the default login details are username — root, password — root.
I recommend doing this. You will now need to enter various details from the mining pool you will be using. You should be able to find these out easily from the website of your mining pool. On your path to learning how to mine Bitcoin, you can choose any Bitcoin mining pool you want. However, we recommend you choose from one of these recommended pools to begin with:. Note: Pool addresses are for users from Europe where indicated. Other addresses will apply from other parts of the world. Every mining pool will have its user interface.
However, the idea is always the same. This will let you see all the information about your Bitcoin mining efforts so far. Some pools will let users set how much they want to mine before their Bitcoin is automatically sent to the external wallet address they specified.
If you want to check how much you should be earning, you can use a mining calculator. CryptoCompare provides an easy to use one. Our electricity is about the average rate in the UK. When you factor in the price of the unit itself, this example operation is going to be incredibly expensive! With this highly advanced bit of kit, it would take just over three and a half years.
As more miners work on the network, the difficulty increases, and the number of Bitcoin a miner can expect decreases. Learn what is the best time to buy Bitcoins, and when to sell Bitcoin, too! Learn about the the most secure vaults in the world, and how you can acquire one of such vaults yourself! Learn how to convert Bitcoin to cash on Binance P2P, and start exchanging today! Bitcoin mining is very important. The more miners working on the network, the more secure it is.
Some hobbyist miners mine the network at a loss. Unfortunately, Bitcoin mining is highly competitive these days. Without a huge investment and the freedom to set up somewhere with low electricity rates and a cool climate, your chances of making a lot of money Bitcoin mining are very slim. Ethereum and Monero are amongst the most popular choices.
However, a quick search of the web will find many more obscure projects that can be mined with less expensive hardware. So, that was it. I hope you learned a lot! We do not publish biased feedback or spam. So if you want to share your experience, opinion or give advice - the scene is yours! The short answer is - usually , no. If you want to hold some Bitcoin, your best bet is to purchase it from an exchange. In general, the best way to mine Bitcoin is by setting up a designated rig i.