mining bitcoin

Beginner’s Guide to Mining Bitcoins

So you’ve heard of Bitcoin, and you’re ready to get your hands on some digital wealth. You can buy and sell for bitcoins, or you can “mine” for them. Mining for bitcoins is actually the process of verifying other bitcoin transactions, which users are rewarded for. This is the central mechanic behind the bitcoin economy, and mining is used to keep transactions secure and reliable. As time goes by, the process for mining Bitcoin is becoming more and more difficult. Today, you need specialized (and expensive) equipment to mine Bitcoin personally. While the cost and difficulty of mining Bitcoin personally continues to increase, a number of cloud-based mining services are popping up. These services individual users to lease the processing (or hashing) power of mining equipment and mine Bitcoin remotely. This batcheminer teaches you how to mine Bitcoin using cloud based services, as well has how to mine Bitcoin personally using ASIC miners.

Personally Mining Bitcoin

  • Purchase custom mining hardware. When Bitcoin first started, it was possible to mine using only your desktop’s CPU and GPU. Today, that is nearly impossible. You will be spending far more on electricity than you will earn mining coins. As Bitcoin mining difficulty increases, more and more powerful hardware is needed to mine Bitcoin. As of 2018, you will need to purchase an Application-specific integrated circuit (ASIC) miner to mine Bitcoin. There are a variety of sources where you can buy ASIC miners.[1] Here are some things to consider when purchasing a Bitcoin miner
  • Hashing Power: This is how many hashes per second an ASIC miner is capable of processing. More expensive ASIC miners have greater hashing power.
  • Efficiency: ASIC miners consume a lot of electricity. In order to make a profit mining Bitcoin, you need a miner that efficiently converts that electricity into Bitcoin. Otherwise, you may end up spending more on electricity than you are able to make back in Bitcoin.[2]
  • Price: A decent ASIC Miner can cost between $1000-$5000 dollars. This doesn’t even factor in the cost of electricity and mining pool fees. You will also need to purchase a power supply for your ASIC miner, which will cost about $100 – $200. Use a Bitcoin Mining Profit Calculator to factor in all the cost and receive an estimate of your expected returns. It’s important to remember that these calculators give you an estimate based on the current Bitcoin market value. As Bitcoin and Bitcoin mining grows in popularity, your estimates are likely to decrease as time goes on. So if a calculator estimates that you can earn .4 Bitcoin per year today, that value may decrease to .1 or less by the end of the year.[3]
  • Purchase a power supply. In addition to to purchasing an ASIC miner, you will also need to purchase a power supply that is compatible with the ASIC miner. ASIC miners consume a lot of electricity. It is recommended that you use a 20 amp (15 Amp minimum) outlet to power your mining rig.
  • Obtain a bitcoin wallet. Bitcoins are stored in digital wallets that are encrypted to protect your money. These wallets can be either locally or exchange website online . While online services that host your wallet won’t be able to access it, they are considered less secure as your money could potentially be lost if something catastrophic happens on their end.
    • Most established bitcoin users recommend using a local wallet for security reasons.
    • Local wallets typically require verifying the entire blockchain, which is the history of all bitcoin transactions. Hosting a blockchain is what helps keep Bitcoin running and secure. Syncing this blockchain for the first time can take a day or more.
    • Popular local wallets include BitcoinQT, Armory, and Multibit. Multibit does not require downloading the entire blockchain.
    • You can also get wallet apps for your mobile device. These do not require downloading the entire blockchain. Popular apps include: Blockchain and CoinJar.
    • If you lose your wallet, you lose your money![4]
  • Secure your wallet. Since there is no “ownership” when it comes to wallets, anyone who gains access to your wallet can use your coins as they please. To prevent this, enable two-factor authentication and store the wallet on a computer that doesn’t have access to the internet, perhaps storing the wallet on your memory stick or SD card if you need to eject/dismount it later and have the wallet on the go.
  • pick a mining pool. Most cloud mining companies will ask you to join a mining pool. This is standard practice if you are cloud mining, or mining Bitcoin yourself. It increases your chances of earning Bitcoin. It is recommended that you join a well established and proven pool.
    • Most pools charge a small fee (around 2%) of your earnings.
    • When joining a pool, you will need to create a “worker”. This is a subaccount which is used to track your contributions to the pool. You can have multiple workers at once. Each pool will have instructions on creating workers.
  • Connect the power supply to the ASIC miner. The power supply has a number cords attached to it. Connect each of the cords to the hashing boards on the ASIC miner. Then connect one cord the control board on the ASIC miner.
  • Connect the ASIC miner to your router. After you connect the power supply to the ASIC miner, use an ethernet cable to connect the ASIC miner to your router.
  • Boot up the ASIC miner. After the ASIC miner is connect to the power supply and your router, you can boot up the ASIC miner by either plugging in the power supply or flipping and on/off switch on the power supply. There should be an LED indicator on the ASIC miner to indicate when it is fully booted up. It takes approximately 10 minutes for the ASIC miner to boot up.
  • Type your router’s IP address in a web browser. Before you can configure your ASIC miner, you need to find the IP address for the ASIC miner. You can find this in the admin page of your network router. Type your router’s IP address into the address bar of a web browser to access the routers admin page. You can use any web browser on any computer connected to the router that your ASIC miner is connected to. Check the users manual for your router to get the specific IP address, or Google the IP address for the make and model of your router.. Most router IP addresses are 192.168.0.1, 192.168.1.1, or 192.168.0.0, or 10.0.0.1.
  • Find “Connected Devices” in the router admin page. The router admin page differs depending on the make and model of your router. Somewhere there should be a button that displays all the devices connected to your router. This is where you will find the ASIC miner.
  • Click on your ASIC miner. The ASIC miner is listed under all the devices connected to your router. Click on it to display the device information.
  • Copy and paste the IP address of the ASIC miner into your web browser.When you click on the ASIC miner under the list of the devices connected to your router, it should display the IP address, among other information. Copy and paste the ASIC miner IP address in your web browser. This opens the admin page for the ASIC miner. Write down the IP address for the ASIC router so you can easily access this page in the future.
  • Log in to the ASIC miner. Check the users manual to see what the default log-in for the ASIC miner is. Typically the username and password is “Root” and “Root”.
  • Click Miner Configuration. When the ASIC miner boots up, it starts mining right away. However, it will not be mining for you. It will be mining for the people who made. In order to get it to start mining for you, you need to input your mining pool information. Click “Miner Configuration” to setup the miner.
  • Type the URL, username, and password for your mining pool. When you log in to your mining pool, you will need to get the URL, username (or worker), and password (if applicable) and type all this information on the “Miner Configuration” page on the ASIC miner. Usually, you can enter up the 3 mining pools into an ASIC miner.
  • Click Save/Apply. This saves the information into your ASIC miner. The miner is now mining for you and your mining pool. [5]
  • Keep an eye on temperatures. Mining programs consume an insane amount of energy. Most ASIC miners come equipped with a heavy duty cooling fan, which will need to be replaced ever so often. You may also want to figure out a way to vent all the excess heat.[6]
  • Check your profitability. After you’ve mined for a little bit, check your figures to make sure its worth it. How much did you make over the last few days? Compare that to how much money it cost you to keep your equipment running at full speed during that time (the Bitmain Antminer S9 power supply outputs about 1200 watts at 110-120 volts, or about 1600 watts at 220-240 volts).[7] It is highly recommended that you use a Bitcoin Mining Calculator to check the profitability before investing in mining Bitcoin, as well as periodically while running your operation.

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