The popularity of cryptocurrencies is growing by the hour. The appearance of this virtual circulation of money dates back to 2009 and was created by Japanese programmer Satoshi Nakamoto and a group of like-minded people. Among all the options, one of the popular ways to make money “out of thin air” is bitcoin mining. To master this art, you need to understand what it is, how to use it, and whether it is profitable to mess with the world of cryptocurrencies.
What is bitcoin mining
Blockchain is a chain of transactions where each successive link contains information about all the previous ones. It is such chains that are called bitcoins (bitcoin). The process of creating and mining such virtual “connections” is called mining, which requires good computer equipment and special programs.
Bitcoin mining is the support of an entire infrastructure designed to make the entire network work. The essence of this process is solving complex mathematical problems with the help of special software installed on users’ devices. The process of obtaining bitcoins is not controlled by a center, but is distributed to everyone who wishes to do so. Mining performs a number of important tasks:
- supporting transactions (transactions);
- protection of the network from the addition of invalid information;
- preservation of bitcoins from various attacks;
- support of decentralization.
Important! In terms of profit, it is no longer profitable to mine bitcoins at home, because the power of standard computer equipment is not enough.
How to start mining bitcoins
Once you understand the basic essence and task of miners, you can move on to the process itself, which will require a choice of:
- Purchase local storage to accumulate funds on your PC;
- To open an online wallet in any system.
Really successful manners choose the first option. It will require costs for the purchase of more powerful equipment or a separate server storage, but it has a higher performance and only the owner is responsible for personal funds.
And the first thing a beginner should do, after creating a place to store virtual money – to visit the official site of Bitcoin, where you download and install the official software for storing cryptocurrency.
The first time you run the software, it starts the process of downloading Bitcoin blocks. It takes a certain amount of time, but you cannot pause the process. Wait for full synchronization and move on.
A fork is the use of a software project’s codebase as a startup for another. Each fork can evolve and exist independently of the other. The main criterion for choosing a fork – profitability. And you should also pay attention to liquidity – the ability to transfer virtual money into all possible “live” money.
Bitcoin itself is based on SHA-256, and high profits come to owners of large and expensive farms. For example, Scrypt uses a lot of RAM, making ASIC processors problematic and allowing to use regular PCs for mining.
You can calculate the profitability on any online mining calculator. This figure depends on the video card and the speed of your equipment, as well as the exchange rate. If the computer is not equipped with “hardy” components, the average earnings per day will be only 100-200 p.
The choice of pool
A pool (mining pool) is a server that distributes tasks for subscriptions among all connected participants. Contribution of each pool is estimated as Share, the higher it is, the more chances to get an expensive signature. As soon as such a “Ball” falls in the target, the pool says that the block is ready and distributes the reward.
Choose a pool by the commission – the percentage of the block that will be shared between miners. And also look at the features of the withdrawal of funds to your purse. Some pools provide additional options for viewing and monitoring the statistics of the walkers.
FYI: Worker is a program that runs from your computer. How many units you have, so much you can run “robots”. On the selected pool you need to register each of them.
Choosing a Miner
A miner (“miner” in English) is a program for mining. It solves complex mathematical problems and counts the rewards in the form of accrual of several units of cryptocurrency to the account.
Usually, the selected pool specifies which miner is best suited to perform all the functions, and detailed instructions on how to set it up. Look for the “Get started” section.
Getting started mining
Startup instructions are also included in the pool’s documentation. Usually, the process is done through the command line. For example, if you are using cgmoner on Linux without a GUI, you will need to enter the command:
“./cgminer –scrypt -o stratum+tcp://host_pool:port -u Weblogin.Worker -p Worker_passwor”
Where Weblogin. Worker is the name of the worker and his password is Worker_passwor. To mine ether with Ethminer use the following command:
“ethminer.exe -G -S eth-eu.coinmine.pl:4000 -FS eth-us.coinmine.pl:4000 -O VIPepol.1:1”
All options are prescribed in the documents in the pool, including to start the process of earning in the absence of a video card.
Withdraw to your wallet
From the official site of fork, follow the proposed links and create your wallet. It is necessary to make an address, so you can receive earned money. Then, the received line is transferred to the section of your account – “Payments”.
You can put the withdrawal immediately to the cryptocurrency exchange. Also, do not forget that you will pay commissions for each transaction, so do not put payments of small amounts.
Tip: If you don’t understand at all how to set up your miner, there are special programs that do all the steps step by step for you. But you have to share with them. So, you give 1-1.5% to the pool, and 30-40% to the software developers.
Bitcoin mining software
To mine bitcoins you need to install a cryptocurrency farm or software on your PC. Among the software there are several most suitable and proven options:
CGminer – popular GPU / FPGA / ASIC microprocessor Graphics open source type is suitable for Windows, Linux, OS X. The software itself includes overclocking, monitoring, fan control and remote interface capability.
BFGminer – created specifically for FPGA and ASIC, but does not provide a central focus on graphics processes. There are dynamic clocking, monitoring and remote screen viewer functions.
BitMinter is the best software when it comes to connecting to users and potential clients. The interface is simple and straightforward with an uncomplicated installation of the program itself.
Also worth looking at BTCMiner, Poclbm, DiabloMiner.
Bitcoin mining wallets
On the technical side, the wallets (BTC) themselves are not stored anywhere – it is a digital code recorded in a database using Blockchain technology. There are 4 groups of such cryptocurrency storages:
- for computers;
- an application on a smartphone;
- web wallets;
- in the form of gadgets.
Among the options for PCs, the most reliable are considered Bitcoin Knots, Bitcoin Core, GreenAddress, ArcBit. Mobile versions are chosen depending on the software of the gadget, there are options for Android, iOS, Windows. If you choose among the virtual ones, then pay attention to Blockchain, Xapo, Coinapult.
The best hardware for bitcoin mining
To mine a cryptocurrency that is not influenced by financial markets or regulatory centers, you need to assemble an optimal set of computer hardware. This includes a processor, video cards and additional equipment.
A video card should have enough memory and GPU frequency to allow the mining process to proceed without any complications. Suitable models include:
- Radeon RX 470 and 480;
- Geforce GTX 1060, 1070,1080;
- AMD latest models.
The average payback on such equipment ranges from 200 to 360 days.
GPUs are the most important equipment when working with crypto. Only powerful modern computers with enough RAM and a good video card are suitable for mining. The best options include:
- CyberPowerPC Gamer Ultra 2235 – 8GB RAM, 1TB hard drive, AMD RX 480 graphics card;
- Acer Aspire T AT3-715A-UR11 – AMD RX 480 graphics card, Intel Core i7-6700 processor;
- CybertronPC RHODIUM – 8 GB RAM, AMD RX 480 graphics card, good for Ethereum.
It is possible to buy Intek G4400 processor separately, which is suitable for mining, but will be cheaper than the whole computer.
Instead of processors and graphics cards you can buy special purpose integrated circuits (ASIC) or fan arrays (FPGA) as well as separate USB devices.
The best ASIC-miners are ANTMiner S7, S9, Avalon6, CoinTerra TerraMiner IV. If you choose from USB-mainers for bitcoins worth looking at AntMiner U2, BPMC Red Fury USB, Avalon Nano 3.
Pools differ in terms of interfaces, informativeness, capacity, types of currency, reward distribution system, and commissions. There is a “Chinese four” of the most popular and reliable pools:
- F2Pool or “aquarium fish”. About 20% of the hash rate is retained in the network. Commission on the withdrawal of only 4%. This system is the most massive.
- BTC China with 10-12% retention in the network. They take the 4th place in the overall pool rating.
- BW pool – 7-9% capacity, there is a partial translation into Russian. PPLNS charging system works without commission.
- AntPool – about 18% of mining capacity, works on PPLNS without commission, there is a variant of PPS with a deduction of 2.5%. Suitable for those who like to play solo.
Choose a pool based on the most favorable conditions for yourself and the simplicity of the interfaces. For beginners it is better to choose an easier option for mastering the basics of bitcoin mining.
You can mine only little-known and new cryptocurrencies on an average power machine. Bitcoins require at least 4 GB of RAM and 2 GB of video card memory.
There are no operating system requirements, pick a suitable version of the program for mining can be for Windows from 7, Lunix (it is most often chosen for cryptocurrencies).
The main thing is to buy powerful video cards and even more than one, or put separate USB devices or ASIC-mainers.
Mining traffic depends on the number of connected devices, their performance and the complexity of solving mathematical problems. With the right equipment setup and pool selection, 10kbps Internet speed for a standard Dial-Up connection is sufficient. It must be wired, without failures and interruptions. Therefore, choose your traffic provider carefully.
If there is no way to ensure the stability of the connection, you can buy 3G modems with unlimited traffic and use them in a good coverage area.
Cloud bitcoin mining
Cloud mining uses special servers where you can work without buying your own cryptocurrency mining equipment. In this case, a small commission will be taken for the use of the resource, which is cheaper than buying professional hardware for bitcoin mining.
Among the most reliable servers stand out:
- Coinmix.biz – a new option with a minimum deposit of $1. The average return on investment – from 50 to 100 days.
- Cloudmy – for the registration bonus of $ 2 (20 GH/s). There is a system of levels of profitability from 0 to 9. Payback from 25 to 100 days.
- Apextop – bonus of $ 1, 10 levels of profitability. It is possible to return funds in 25-50 days.
You can find more profitable options depending on your investment.
Nuances and possible difficulties
To start mining bitcoins, you need to choose a mining method:
- solo – on personal equipment, where it is possible to spend more money on electricity and the purchase of iron than to make a profit;
- pool – with a remote server: the biggest challenge is to choose the right one with the most user-friendly interface and the lowest withdrawal fee;
- сloud servers – the whole process is about the amount of investment you will make and the payback period.
The optimal option with a large number of nuances, but a high probability of earning is considered a pool. In order to choose it correctly look at the three main characteristics:
- the amount of commission from 1 to 10%;
- withdrawal methods;
- Interface friendliness.
Beginners should not take up new cryptocurrencies, but to try your hand with a standard set of bitcoin mining software is quite possible.