Are you planning to get your feet wet in the exciting world of Bitcoin mining? If so, you need quite a bit of research and preparation to do. Despite what many people would have you believe, cryptocurrency mining can prove more difficult than you’d initially think. In fact, you run the risk of losing more money than you earn. This applies in particular to solo miners. There used to be a time when you could mind Bitcoin with regular CPUs and GPUs, but times have changed. Keep reading to learn and master the basics of Bitcoin mining.
Bitcoin Mining Hardware
There is a reason why miners are often referred to as the lifeblood of the blockchain. Bitcoin miners keep the entire network secure by creating new blocks and verifying transactions. With the increase in the number of users of trading platforms like Bitcoin Code comes an increase in the number of Bitcoin miners. Over the years, mining has become more competitive, with more and more people trying to mine cryptocurrencies as a new source of wealth. This has led to the development of hardware are specifically built for mining. But even if you invest in an expensive computer rig, you might end up failing to mine enough coins to cover your recurring expenses.
What you need to understand is that the trend nowadays is pool mining. This involves joining a pool of miners where you need to pay associated costs in exchange for more stable rewards. This option means you wouldn’t have to invest in your own mining hardware. But if you insist on solo mining, prepare to shell out at least $2000 to purchase the top BTC ASIC miner.
Bitcoin Cloud Mining
If you do not have enough money to cover the upfront investment for mining hardware, then you should definitely look into cloud mining. This practice involves the use of shared process power using a remote datacentre. This is the perfect option for those who do not have enough time to manage and maintain hardware setups that, with hefty monthly expenses. Today, hash power leasing is the most popular form of Bitcoin cloud mining.
You will need to lease a certain amount of hash power from a cloud mining firm in exchange for real money. This provides you with the right to earn BTC block rewards based on your purchase hash power. Take note that cloud mining can also be used for mining coins other than BTC.
Bitcoin Mining Software
Just as important as the mining hardware you use is the Bitcoin mining software. It is important to choose the right software according to the hardware you are using. For solo miners, the most important thing is to make sure that you are in consensus with the network so be sure to use the latest version of the Bitcoin core software. For pool miners, it’s imperative to join a pool that follows the consensus and doesn’t use your hash power to support any hard fork.
Bitcoin miners are growing by the day, so you need to carefully weigh your options before shelling out huge cash on Bitcoin mining hardware and software. By mastering the basics of mining, you should be able to determine whether you are better off joining other miners or you will gain more profit by directly converting your fiat currency into digital coins.