Cryptocurrency mining – Before the advent of cryptocurrency, the world solemnly relied on the fiat currency, not as though to suggest that the fiat currency has been relegated, but then crypto has equally grown in bounds.
Early on, there was fierce and cold war against cryptocurrency, since it works entirely contrary to the rules of centralized currency being controlled by the governments of the world.
There was panic and fear of uncertainty as to where the cryptocurrency is headed, how it’s going to influence the world order, its value, measurement, sustainability were all put to theoretical questions.
Ironically, there seems to be an on-going paradigm shift in the world, interestingly the future is beginning to unfold as cryptocurrency has gained popularity in multiple folds.
Many nations of the world at the moment are working on integrating cryptocurrency into the controlled system since the doubts are gradually dousing in its favor.
That said, cryptocurrency mining has remained a newbie bloc, if you’ve been trying to familiarize yourself with terms revolving around bitcoin mining and how the currency is being generated, this guide will do just that.
Introducing bitcoin mining/Cryptocurrency mining
A number of new users have continued to be at crossroads about the possibility of bitcoin creation and generation since it proportionately involves electronic and mathematical engineering to accomplish.
Generally when you make reference to mining, it’s usually associated with the traditional approach of mining coal and its components, then come other mineral resources.
Usually manual labor is being employed in the process, away from that today, bitcoin mining is nothing near the existing ideology probably why it remains a puzzle to be dismantled.
Bitcoin mining is the process in which high powered computers solve complex math problems, in essence the said problems are somewhat too complex that they cannot be taken care of by manual operations.
These problems are far complicated to operate as thousands of them are being operated on in minutes, this type of task can only be completed with advance computer software.
Ideally, in every mathematical operations it’s expected that an outcome otherwise known as result be obtained, consequently the result of bitcoin mining is new bitcoins, hope you get that?
You may choose to say that bitcoin mining is the activity that leads to generation/production of more bitcoins.
Additionally, while traditional mining produces gold in the end, the outcome of bitcoin mining is more bitcoins. In the other hand, the activities of bitcoin miners ensure more security of bitcoin, since its trustworthiness is reassured through verification of transaction information.
The word bitcoin mining in this guide goes interchangeably with cryptocurrency mining since bitcoin is a family of cryptocurrency, a fore most popular member of the household at that.
In ordinary terms, transactions consummated in financial institutions are backed up with receipts, records and notes. But in bitcoin mining, this is achieved by building transactions into blocks, which transforms to a public record called blockchain.
You may choose to understand blockchain as a data base where electronic information are stored.
When the information keeps pilling up, it’s being arranged by the miners to form a chain, resulting from the effect and outcome of mining, do not forget.
A blockchain aggregates information in groups, being that the block formed has certain storage capacity, when it’s filled, it’s chained into the existing block.
While it’s very apparent that bitcoin needs computer to store the blockchain.
Is Bitcoin mining profitable?
Do understand that mining could also entail earning bitcoin as a reward or exchange for running the verification process which validates bitcoin transactions.
From our definition of mining, it provides security for bitcoin network too.
That said, miners in turn get bitcoin as compensation for a job done, if the price of bitcoin exceeds the cost of this mine, miners profit in return.
For the bitcoin holdings by miners, they tend to make profit when the market forces of demand and supply favors bitcoin request sentimentally, bitcoin prices tend to go up, proportionately increases holding and value.
Generally, cryptocurrency mining could return some good profits to the miners appropriately.
How to start bitcoin mining
Now you want to know how bitcoin is being mined? Great idea on your way to discovery.
Like the local gold miners will require traditional tools to get dirty, mining bitcoin likewise requires certain tools to aid your effort.
- Bitcoin mining requires a mining hardware
- It consumes more electricity possibly than you are likely to earn in the end
- You may reach out to designate companies like Avalon for durable and powerful systems built specifically for this purpose. You will need a high speed video processor card.
If you can’t withstand the modalities and challenges, then consider joining a bitcoin mining pool.
These are group of bitcoin miners working together to solve a block, then share in the rewards afterwards.
Interestingly, you might mine a bitcoin for close to a decade without earning a satoshi if you didn’t join a mining pool, it’s as honest as that.
It’s a principle of sharing the task and splitting the rewards across network which to me is far ideal than embark on an invisible and unrealistic project you may never get to accomplish.
You will need a bitcoin wallet to receive your proceed of the bitcoin mined, so set up one or make available existing wallet ready for use.
Free bitcoin mining software
There are a number of bitcoin mining software
Having developed interest in cryptocurrency mining, it’s time to go in search of software that will aid your success in this journey.
When you are just getting started, a free option might just be the real hack for you.
Take a rundown of the available software I found useful in this business;
- Awesome Miner
- CGMiner etc
There are other software that require payment with advance features, but the above listed can help you get started in the meantime.
Cryptocurrency mining could be profitable, though not easily accessible given to modalities, workloads and electricity supply required to accomplish the task at a given time.
While you have a breath of hope to make money from it, it may not materialize particularly in this part of the world, except you have the financial wherewithal to join a mining pool.