How to Make Money Bitcoin Mining
Are you interested in building a great passive income stream from home? Learning how to make money bitcoin mining is one way you can do it.
Bitcoin mining is one of the numerous work at home jobs, which allows you to make money working online. Bitcoin is a cryptocurrency (digital currency) created in 2009 by Satoshi Nakamoto, which operates independently of any country’s Central Bank.
It has grown rapidly in popularity and is currently the most valuable form of digital currency today. Its exchange rate has risen from about $963/bitcoin in 2016 to $7,000 at the moment.
Controversies are surrounding the use of bitcoin as a form of payment, but lots of top companies including Dell and Microsoft, use it as a trusted form of payment.
The bitcoin system is controlled by a cryptographic protocol rather than a centralized system, such as a country’s central bank. It has a global database or public ledger known as the blockchain.
This blockchain is mined by an army of computers 24/7 a year to dig out the virtual coins. The process of mining for the coins is called bitcoin mining.
What is Bitcoin Mining
Bitcoin mining is the process in which transactions are verified, and new bitcoins are released. It involves the use of computer hardware to solve complicated mathematical calculation and compile recent transaction into ledgers, known as blockchain.
The process is used to track every single transaction made on the network, and each time a mathematical problem is solved, new bitcoins are created as a reward for the miners.
Initially, in 2009, 50 bitcoins were generated per block, but this value is halved every four years. Consequently, 25 coins were generated per block in 2013, and presently only 12.5 bitcoins are awarded per block, as the last block halving occurred this year.
How to Make Money Bitcoin Mining – Getting Started
The bitcoin network produces a particular amount of bitcoins every 10 minutes, so the difficulty of solving the mathematical problems are increased in other to adjust to the network’s hash rate increase.
That is the more miners that join the bitcoin network, the harder it gets to actually mine bitcoin. To get started mining bitcoin, you need a wallet, access to the internet and power, as well as the necessary hardware – a CPU or GPU.
Your set up hardware can become a node in the network that processes and verifies the transaction in the bitcoin network. You can either choose to mine bitcoin on your own or join a mining pool.
Joining a pool is the best option for making money bitcoin mining, because mining a block on your own may take months before you get a return on investment.
When your pool successfully solves a block, and new coins are created, you will get a tiny fraction of the mined coin. Outlined below are steps to help you get started in learning how to make money bitcoin mining.
Step 1: Purchase a Custom Mining Hardware
Mining bitcoins involves the use of hardware such as your computer’s CPU or GPU. However, these consume a lot of electricity, which will cost you more than you will earn mining.
So, you need to purchase custom hardware with better processing such as the ASIC chips
Step 2: Obtain a Secure Bitcoin Wallet
Bitcoins are stored in digital encrypted wallets to protect them, and you will need this for when you get your reward from mining.
There are several types of wallets, which include desktop wallets, web wallets, paper wallets, and mobile wallets. Ensure that you keep your wallets secure has anyone who has access to it can use your bitcoins.
Step 3: Join a Mining Pool
To quickly earn money bitcoin mining, join an established, trustworthy pool of miners. A mining pool enables you to combine resources with other miners, and split the bitcoin reward afterward.
To join most pools, you may be charged a small fee of 2% of your share of the reward.
Step 4: Download a Mining Program
Mining programs are most often free, open-source programs running in command line. The mining program you will download depends on the type of hardware you purchased.
You may need specific details from your pool’s help section to connect your mining program to the pool. Popular mining program you can download include, CGminer, EasyMiner, and BFGminer.
Step 5: Run Your Miner
After configuring your mining program, and connecting it to your pool, you can then start mining for bitcoin.
Ensure that you keep an eye on the temperature of your hardware as mining programs tend to push them to their limits.
Bitcoin Mining Terms You Should Know
Bitcoin mining is somewhat a technical process. Below are some frequently used terms you should know.
- Block: A block is a record in the blockchain containing several waiting transactions, and connecting all transactions together. A new block containing transactions is usually added to the blockchain every 10 minutes.
- Blockchain: The blockchain is a public ledger containing a record of all bitcoin transactions in chronological order, dating back to the very first bitcoin.
- Hash: A hash is the mathematical problem your computer needs to solve when bitcoin mining.
- Hash Rate: The hash rate is the rate at which mathematical problems are being solved on the bitcoin network. It can also refer to the mining hardware’s performance, which is measured in mega hash/second, Giga hash/second, Terra hash/second, or Peta hash/second.
- Mining Pool: A mining pool is a group of miners that work together to mine a block more efficiently. Once a pool manages to mine bitcoins the profits are divided between the pool members depending on the miner’s hash rate.
- Pool Fees: The pool fee is the fee deducted by the mining pool platform that brings the miners together, to maintain its operations.
- Block Reward: This the amount of bitcoin given as a reward to a person or group of persons who add a new block to the blockchain.
- Cryptography: This is the branch of mathematics that enables the creation of mathematical proof that provides a high level of security.
How to Make Money Bitcoin Mining – Time For Some Income
Once you receive your block reward, you are given a digital key to the bitcoin addresses, which you will use to access and validate a transaction.
You can choose to either exchange your bitcoin for fiat currencies such as USD, purchase goods from stores that accept bitcoins or store them in your wallet for later.
The current exchange rate for bitcoin is $7,000/bitcoin. So, although bitcoin mining requires a fairly big initial investment compared to other sources of making money online, it usually pays off in the long run.
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