How to Mine Bitcoins: Complete Guide
January 27, 2020
Today, almost everyone has heard about Bitcoin, but most of the concepts associated with this word remain a mystery.
In this article, we will talk in detail about three ways to mine Bitcoin in 2020.
Why people mine Bitcoin?
It’s the first cryptocurrency that became the ancestor of all forks and altcoins. This is the original digital asset that uses blockchain and encryption.
Why Bitcoin? The attractiveness of this cryptocurrency lies in its features.
Let us dwell on them briefly:
- Decentralization. The Bitcoin network is decentralized. That means that no one can dominate and control it. It applies to both the security of transactions and the stability of cryptocurrency as a whole. In other networks, decentralization is less pronounced and sometimes even dubious.
- Limited issue. Bitcoin is not an infinite digital asset. It has a limit, which is also a huge plus for its stability. And according to preliminary calculations, Bitcoin mining will continue until 2140.
- Popularity. Cryptocurrency is gradually becoming more widespread, and the number of use cases is growing.
- The most expensive. Despite all the price fluctuations for the whole year, Bitcoin remains the first and most valuable cryptocurrency in the rating of capitalization.
Let’s make a small digression. When Bitcoin has appeared, no one took the cryptocurrency seriously. Very few people drew attention to the new technology.
But these enthusiasts believed in Bitcoin and made their first investment. No one then could have imagined that once the new virtual coin would step over the line and even reach a value of $ 20,000. There are many stories that some programmers, purely out of interest, began to mine Bitcoin, and now they are fabulously wealthy.
Is mining legal in your country?
The Coin Dance portal conducted a study of the Bitcoin legality in different countries and reported that the first cryptocurrency is completely legal in at least 111 countries. Great news, right?
Bitcoin is outlawed only in Afghanistan, Algeria, Bangladesh, Bolivia, Pakistan, Qatar, Macedonia, Saudi Arabia, Vanuatu, and Vietnam. Bitcoin received the status of “limited” in nine countries, but the list includes such big markets as China and India.
Most of these countries simply haven’t determined cryptocurrencies’ official status. So, should you worry about the legality of Bitcoin mining? You can always check its status on the Coin Dance website. However, we don’t make any predictions for the future. There are still risks, and especially this applies to the cryptocurrency business.
Bitcoin Mining Calculator
Bitcoin Mining Calculator is an online program that calculates the miner’s income, energy losses, payback on equipment costs, and other parameters (depending on the service). The principle is simple: you indicate a series of values, after which the system makes calculations and gives the results in tabular form.
You can use such information to decide on the purchase of equipment for cryptocurrency mining. If the program shows low or “minus” profitability, it’s better to refuse this earning option or improve the machine.
Speaking in technical language, the Bitcoin mining calculator is a special algorithm that uses already embedded and new parameters to perform calculations. Depending on the complexity, the program analyzes only the given metrics or current and future (probable) indicators in the cryptocurrency network (course, complexity, and so on).
In the process of computing, the algorithm applies many variables that are in constant motion and can change throughout the day. The most important parameters include complexity, which changes every 2016 blocks, the exchange rate (is updated several times per hour), and the premium for 1 mined BTC (changes every four years). Thanks to the control of these indicators, your task is simplified, because you need to enter only a few numbers. It’s a great tool that can predict future profit.
Now, let’s talk about three main ways to mine Bitcoin.
1 Way: Bitcoin Mining Hardware
A bit of theory. In general, miners are using the following types of software:
- CPU. Now it’s already unprofitable to mine popular cryptocurrencies. You just spend a lot of energy, and the profit is minimal. Therefore, minus is inevitable.
- Video cards. Over time, mining on processors has been replaced by a GPU. A video card reads much more numbers per unit of time than any CPU. Also, some enthusiasts created mining farms, combining several graphic cards into one form at once.
- FPGA mining is now practically not used, although it played a significant role in its time. FPGA chips were powerful, economical in terms of energy consumption, but very expensive to manufacture. Therefore, all companies gradually refused to produce them.
- ASIC mining. When it comes to other cryptocurrencies, more often, users choose video card farms. Not everyone believes in the bright future of Bitcoin. So, if you have bought expensive software, you should consider entering some mining pool. It’s the only cost-effective way that can give you a real profit.
Join Mining Pool
Soon after the appearance of Bitcoin, energetic miners realized that the process of earning could be significantly accelerated if you act not alone. The benefits of this method were felt even by those who possessed high-power equipment. After all, if you mine without a pool, you will have to continually increase the hash rate by buying or improving the software. And it’s impossible to do this infinitely; then we talk about sky-high sums.
A mining pool is a server whose task is to divide one large and difficult computing task into many easier ones and distribute these small tasks to all devices connected to the network.
It turns out that the capacities of all participants are simultaneously working on a task, and the chances of finding a block are increasing. Each miner, as far as possible, contributes to the common cause, and then receives a reward, also in accordance with the invested resources.
When choosing a mining pool, it’s essential to pay attention to its total hash rate. The larger it is, the more likely it is the block closing. Small pools have more chances to succeed than in the case with solo miners.
It’s fascinating! There is such a subtype of pools as multipool. The multipool allows you to mine different coins, and it automatically switches to the most profitable one if the user activates the appropriate setting.
2 Way: Use Cloud Mining
This is an alternative for people who don’t have 3-5 thousand dollars to buy equipment, but dream of making a profit on cryptocurrency mining. Cloud services are sites that provide Bitcoin and other mining companies. Employees of such organizations buy equipment, set it up, pay money for electricity, and solve other related problems. Customers simply buy power and use it to mine virtual coins.
The services cost on the company. For example, let’s consider hashflare.io. The cost of 10 gigahash per second will cost 60 cents. If you take one terahash per second, the price will be $ 600. The advantages of this solution are:
- the possibility of remote mining (without spending money on equipment);
- low requirements for initial capital;
- the ability to earn without specialized knowledge.
The danger is that when working through cloud mining, you can get into scammers. If you choose proven services, then you’ll see that almost all their capacities are sold out. Another minus is the commissions that are charged by the company to cover costs. It all depends on your choice. So, consider wisely.
3 Way: Get Bitcoin Mining Software
Most cloud mining services provide their members with up-to-date software. However, experienced miners recommend that beginners additionally use special tools to monitor the performance of their PC processor. So, there are five most popular Bitcoin mining programs for 2020.
Nice Hash MinerLegacy
Free universal app with a simple interface. It supports several mining algorithms, so it allows you to mine not only Bitcoin. There is a function to select the most profitable coin at the current time automatically.
Due to its simplicity, beginners like the program, although professionals consider it one of the most convenient options. It’s noteworthy that no matter what currency you get, payments are always made in BTC.
Claymore’s Dual Miner
Also, a universal and free open source program. It works with video cards and supports most altcoin algorithms. Many consider it as the most effective tool for mining Ether.
The software is more suitable for experienced users than for beginners. It has many subtle settings that can significantly increase mining efficiency.
The most straightforward tool with an easy to understand interface. It allows you to mine Bitcoin and several other coins. Easyminer is combined with console programs like Minerd, Cudaminer, Ccminer, Cgminer. It works with Asics, processors, video cards.
It has a Bitcoin solo-mining with independent pool selection. The program also shows detailed information about the process and the earned funds.
It’s a multifunctional free app that is suitable for mining BTC and altcoins. BFGMiner works with GPU, FPGA, ASIC. It features a wide selection of settings that allow you to tailor everything to fit your needs finely.
It monitors the temperature of devices, the speed of coolers. BFGMiner allows you to work simultaneously in multiple pools. There are versions for Windows and Linux. The program is primarily suitable for professionals since it’s quite tricky to configure.
One of the first programs operating since 2011. It helped thousands of enthusiasts to earn money. From the very beginning, Cgminer was suited only for the Bitcoin algorithm — SHA-256, but subsequently, it has connected other protocols (Neoscrypt, Phoenix, Cryptonight, etc.).
The software is a console; that is, it doesn’t have a graphical version. All the work is done through the command line. If you feel more comfortable with a graphical interface, then you can optionally install the CGWatcher program.
Instead of a conclusion
Now you know about three popular ways to mine Bitcoin in 2020. History is cyclical, and a new wave of hype may happen when Bitcoin again will cost $ 20,000 or even more. But, for objective reasons, we can’t make a precise forecast.
Therefore, worth it to by mining equipment or join the pool — it’s up to you.
The only thing is that you can make money. But at the same time, there is a risk of being in an unpleasant situation when the rate can drop significantly, and then the payback will take longer than anticipated. Keep this in mind!