Bitcoin Mining is the act of verifying transactions that take place on each and every Blockchain. This gives validity to every transaction and then shares the transaction publicly across the peer-2-peer network for all to see. Bitcoin miners are the people responsible for the verification and valediction of each transaction before it is added to a block to create a blockchain. Once a miner places the next block on the blockchain, he/she can claim a reward which is usually in form of bitcoins. The more the mathematical calculations you solve, the more the reward.
You do not need to be a professional software developer or coder so as to take part in Bitcoin mining. Below is an easy to follow step by step guide for a Bitcoin mining beginner.
- Get a Bitcoin Mining Hardware
The mining world is becoming more and more complex as higher computation power is employed in mining. The higher the mining level the more difficult it is to get profits as the investment in hardware is so high. Bitcoin mining is very competitive and you need to do adequate research before investing in a hardware. Earlier on it was possible to use your personal CPU to mine Bitcoins but with the complexity in mining, this method is no longer viable. You need to buy a specially built computer whose main purpose is bitcoin mining.
- Acquire a Bitcoin Wallet
You need to have a wallet which is either local or online based to store your digital currency. A wallet comes with a Public Wallet Address and a private key or password which are the most important details to note. If your wallet is self-hosted, you need a copy of the wallat.dat file to prevent you from losing your investment. It acts as a backup wallet if any unfortunate thing happens to your machine. One can even get wallets for their mobile devices. The highly recommended wallet is the self-hosted or local made wallet.
- Find a pool to join
It is recommended that you join a mining pool or chose to mine solo. A mining pool is a group of miners who come together to share resources and share the rewards. A pool guarantees you faster returns as you combine your computing power for greater results. Each pool has their own rules, reward method and the fee charged for mining. You need to find one that best suits your needs. Mining alone is complex and you might never get to make any returns on investment.
- Get a Mining Software for your Computer
There are various free mining programs depending on the hardware you are using. The mining program helps monitor and control your hardware. Some common mining programs are CGminer, BFGminer, and EasyMiner. If you are in a pool, it is advisable to consult them while connecting your pool to your program. The programs run in a command line and may require a batch file so as to start properly.
After all that you are ready to go. Run your mining program and start by entering your pool’s username and password. You will notice your machine slow down as the miner works.
It is very important to watch the temperatures closely as the software makes your hardware heat up. Some programs like SpeedFan can keep the temperature in check. You do not want to risk literally blowing up your investment before you even start working. After a while, you should check how much you are making to see if your investment is worth running on.