Bitcoin Mining is the process of discovering, or you can say creation of Bitcoins as a currency. Mining of Bitcoin is like the backbone of Bitcoin industry. Bitcoins, unlike the local currency we use, cannot be printed rather; they have to be created by some specialized computers. The Bitcoin miners are responsible to provide security and bring about transactions. If the miners will not provide complete security protocol, the system is unsafe and can be attacked easily.
To provide high security, miners solve computational issues which as a result, allow them to gather blocks of transactions as a chain. Due to this, Bitcoin Block chain is a famous term in Bitcoin network. For doing so, miners are then awarded with the new Bitcoins created some transaction fees. This reward is paid every 10 minutes.
PRIMARY ROLE OF BITCOIN MINING:
The primary role of Bitcoin mining is to allow the Bitcoin nodes to become save and secure. It makes the Bitcoins nodes to be tamper-resistant, and for this purpose it is designed to be very difficult in order to keep the number of blocks created by the Bitcoin miners smooth and steady. Any block created needs to hold some proof that the work done to create it is an authentic one. Only the block with valid proof is considered valid as well.
The verification for newly created block is then verified by further Bitcoin nodes working with in network through a process called “Hashcash” which is proof of work function. After the verification step, the miner is awarded with the Bitcoins that are decided by everyone mutually present in the Bitcoin network.
Bitcoin mining is named so, because it nearly is similar to the natural mining process of minerals and material underground. Like the actual mining, it requires tremendous efforts and as a result creates new Bitcoin currency with price tags similar to natural resources like gold, silver, etc.
CAN I MINE BITCOINS?
If you are an individual and new to the world of Bitcoins, the answer to this question is ABSOLUTEY NOT!
Bitcoin mining is a highly specialized industry that will not bring more profit to some newbie or individual. This is usually done in large warehouses that are situated in the areas with cheapest electricity rates. It is obvious that Bitcoin mining is an expensive task or highly expensive task.
Still for some general guide line, I have summarized the Bitcoin mining starter and working pack below:
GETTING A BITCOIN MINING HARDWARE:
To get started with the Bitcoin mining journey, first of all you will need an ASIC miner that will enable you to mine Bitcoin. ASIC miner is a type of specialized computer that is built solely for the purpose of Bitcoin mining. They are specialized for mining purposes.
Take it as a serious warning, never to try Bitcoin mining on your local home desktop computer or laptop. You will be paying huge amount for the power supply and earning less than a penny working whole year.
So ASIC miner computers are the first step!
SELECTING A MINING POOL:
Once you are done with the first step, that is, getting an ASIC miner computer, it’s time to select a mining pool. Without a mining pool you will only be able to receive award if you succeeded in finding a block at your own. This is done with the help of a process called “Solo Mining”. Solo mining is not at all recommended. This is because your ASIC miner hardware’s hash rate will not be able to reach somewhere even near to fining a block with solo mining.
The actual question is how do mining pools work or help?
When you join a mining pool, you actually share your hash rate with that particular pool. Once that pool finds a new block, you simply get paid. This is based on the percent of hash rate that is contributed by you to the pool. To make it simple, assume you contributed 1% hash rate of the pool. Once a block is found, you will get .125 Bitcoins out of 12.5 current reward of Bitcoin.
GETTING A BITCOIN MINING SOFTWARE:
Bitcoin mining software is a term that elaborates how you actually hook up your mining hardware to your desired mining pool. You need this Bitcoin mining hardware to point out your hash rate at the joint pool. You also tell the pool about your Bitcoin address where payouts should be sent with the help of Bitcoin mining software.
If you do not have a Bitcoin address or wallet, you need to learn that first as soon as possible.
The Bitcoin mining softwares available are for Mac, Windows, and Linux.
CHECK OUT IS IT LEGAL OR NOT:
Before you begin, it is crucial to check out whether Bitcoin mining is legal in your country or not. In most of the countries it is not an issue, but in few ones this issue does exist. Top confirm this, consult your local counsel and find out whether it’s legal or not as well as the tax applicability in doing so.
Like any other business, you can write off your expenses that will make your operation profitable. This may includes electricity and hardware costs.
IS IT PROFITABLE OR NOT?
I hope you understood very well what you need to do before you initiate the mining stuff, right?
Now it is your job to run some calculations and find out if Bitcoin mining will actually bring profit to you or straight lose? For this purpose you can use a Bitcoin mining calculator that will help you in getting a rough idea. Rough idea is mentioned here because many factors that are related to your mining profitability are constantly changing. For example a doubling in the Bitcoin price could double your profits too.
But on the other hand, it could also make mining much more competitive. In this situation your profits remain the same.
CAN I MINE BITCOIN ON MY PHONE?
I know this is not something normal, but you actually CAN mine Bitcoins on your Android device. You can do this by using an app like “Crypto Miner” or “Easy Miner”. Through these apps you can mine Bitcoins or any other coin.
But again, if you are deciding to do so, you won’t earn more than a penny per years. This is because your android phone is not at all powerful enough to be compatible for the mining needs. It cannot function as those hardware used by huge warehouse companies.
So, it might seem a cool option to setup a miner app on your Android phone, but to see how it works. Do not expect to make any money by doing Bitcoin mining from your smart phone. This will only bring huge battery lose and a great wastage along.
As my final words, it must be noted that efficiency of Bitcoin mining is improving constantly and smoothly. Due to this, less energy is required to create more cryptographic security. Bitcoin mining hardware has shifted from CPUs top GPUs, FPGAs, and finally to ASIC miners (APSIC stands for application-specific integrated circuit).
ASIC mining chip’s architecture as well as processes is under continuous development. Appealing rewards are offered to those who are able to bring the latest and greatest innovations to Bitcoin market.