If you’re wondering how long it takes to mine #Bitcoins, you’ve come to the right place. Bitcoin has been a digital currency standard recently, and if you’re wondering how it works or how many coins are in circulation, then this article is just what you need. It’s written by Bob Baxley of CoinDesk and goes on to cover the basics of mining Bitcoins:
What is bitcoin mining?
Financed through traditional financial institutions such as banks and exchanges, bitcoin mined can be seen as an investment in computers trying to solve complex mathematical problems. For this
process miners receive bitcoins that help with transaction charges when paying for goods or services with bitcoin.
The Mining Process
To mine bitcoins, a process called bitcoin mining must occur. This method involves computers solving math problems to create bitcoin blocks. When these blocks are solved the system is changed and the miner receives an award or a portion of the block that coins are used. The miner then passes these coins on to other miners from whom they can receive bitcoins by paying transaction fees.
Bitcoin Mining Reward and Difficulty
When a block is solved, miners are rewarded with new bitcoins. Block creation rewards and difficulty are what make bitcoin mining as challenging as it is today. The #Bitcoin protocol ensures new bitcoins are created at a predictable and limited rate.
The reward for solving this problem is new bitcoins, and the protocol will automatically adjust the complexity of the problem so that one is solved approximately every 10 minutes (on average). The number of bitcoins rewarded per block started at 50, halved to 25 in late 2012, and will continue to halve about every four years until all 21 million bitcoins have been mined. The current reward for solving a block is 12.5 BTC.
Bitcoin Mining Profitability
If you’re thinking about getting involved in bitcoin mining here are some things you should consider before getting started. First, you should know that to mine bitcoins a miner must dedicate their computing power to solving bitcoin problems. The second thing to consider is the cost of your hardware because electricity is not free. You’ll need a computer, special mining software, and enough bandwidth to support your activity.
Bitcoin Mining Hardware
How profitable bitcoin mining can be for an individual depends on the effort that goes into maintaining the operation. If you have access to cheap electricity and free equipment then it will be worth your time and money. Difficulty rates are also something you must watch if you want to know when it’s best to get started as well as what gear you’d like to purchase in advance of getting started.
How to Mine Bitcoins
1. Purchase a Bitcoin Miner
Bitcoins are released into the network by mining which requires computational power. The computers that solve these complex math problems are known as miners. You can purchase dedicated hardware called an ASIC miner application-specific integrated circuit) or start mining with a general-purpose computer.
2. Download Software
Software is available for mining other currencies such as Litecoin and Dogecoin. These software downloads will give you more than one option for creating a wallet address where your mined bitcoin can be stored and collected for later use. Mining software may also keep track of your progress and show you statistics on your progress, hash rate, total earnings, etc.
3. Join a Pool
You can choose to mine on your own or join a mining pool. Joining a mining pool can give you more frequent payouts, depending on the size of the pool. Mining pools are similar to lottery syndicates. The concept is that rather than wait for a very slow payout, several smaller payouts will be made regularly. While these smaller amounts may not compete with the larger ones, they do add up over time and can help boost your income significantly if you are successful in your efforts and manage to find more blocks than expected.
4. Keep Your Ear to the Ground
There are several factors you should keep your eye on if you’re hoping to be successful at Bitcoin mining. One of these is the exchange rate. If the value of bitcoin climbs, then the value of your rewards may climb as well, which would make this venture more profitable. However, if the rates decline then you could lose money and quickly find yourself in a hole.
5. Be Prepared to Pay Electricity Costs
This is something that shouldn’t be overlooked because it can become a very serious expense if not planned for in advance. This is also something that can be your biggest expense if you don’t do it in advance by simply being prepared. Your electricity rate goes up considerably when the bitcoin rate does, which means a significant increase in income if this is something you can anticipate.
6. Be Prepared for Equipment Failure
Equipment can fail when mining Bitcoin and you’ll need to be prepared for this because it’s difficult to replace them once they have ceased working. If your equipment becomes damaged or broken, then some of your investments could go down the drain as well as the cost of replacing them could add up quickly if you don’t have enough money saved up to put toward this expense. When the equipment fails, you’ll need to either replace it or get it repaired.
7. Be Prepared for Power Outages
This is one of the most expensive things that mining Bitcoin can do to your financial stability if not planned for in advance and if you don’t plan on being prepared by ensuring you have enough money saved up before starting this endeavor. Although power outages may seem like a small expense, they can be very costly and as such should not be overlooked. If there’s an extended period without power when mining Bitcoin, then your equipment could fail, resulting in sudden downtime and loss of income needed to pay for these expenses.
8. Be Prepared for Your Hard Work to be Rewarded
You’ll need to have a very large amount of patience and the ability to handle more than one problem at once to be successful at mining bitcoins. You’ll need to be prepared for your hardware problems, software issues, and power outages because these can all contribute significantly toward keeping your mining efforts at a lower or higher level as well as your overall profitability.
9. Research Bitcoin Profitability and Stick with it!
Many factors go into profitability, one being how long you mine and how much equipment you have needed to do this successfully. If you’re looking to get into the market, then consider first doing your research into bitcoin mining. If you want to do it right, the first step is to gain an understanding of what you’ll need and how much it will cost to assemble the best bitcoin mining hardware.
10. Invest in Dedicated Equipment for Bitcoin Mining
If you decide that Bitcoin mining is for you, then take your time and invest in dedicated equipment designed specifically for this purpose. ASIC #Bitcoin mining has proven to be the most effective way of mining bitcoins and is one of the easiest ways as well because all that’s needed is one computer with a specialized piece of software and an account with a bitcoin exchange market like Mt. Gox or Coinbase. (See “How to Buy Bitcoins” below)
In the meantime, here are a few things you should know before starting any type of bitcoin mining endeavor:
What is Bitcoin Mining?
Bitcoin mining is a new form of virtual money generation designed to keep transactions secure and reliable, while also creating new currency units in the process. It’s done by running a software program on your computer that processes complex mathematical formulas. This program will help manage your computer as it tries to solve these complicated formulas by using your computer’s processing power, graphics card, and memory. In return, it gives you small amounts of bitcoins over time as it solves the formulas.
The value of bitcoins can change dramatically from one hour to the next, but over time, the value of bitcoins has trended upward. Bitcoins have increased in value by over 10,000% in the last year alone!
What is Bitcoin Worth? Currently (May 2017) 1 bitcoin has gone up and down in cost over the years but it is worth more than $1,800 and it continues to grow. It’s more profitable than ever before since these Bitcoins are worth a lot more than they were a couple of years ago.
Many people who start mining bitcoins do so because they want to make money. Bitcoin mining also helps push forward the technology behind cryptocurrency, which could be used to power new advancements in software, apps, and Internet use. It can also make for a fun hobby as you get your computer to “race” against others in solving these math problems and get a chance to add bitcoins to your wallet. However, it’s important to remember that bitcoin mining requires a very large amount of work and carries with it a substantial amount of risk.
How Do I Start Mining Bitcoins?
If you want to start bitcoin mining you’ll need to take the same basic steps as someone who wants to start using bitcoins as a currency. The first step is getting yourself set up with an account on Mt. Gox or Coinbase, both of which provide an easy way to buy bitcoins by using a conventional bank account. Bitcoins are sold at a price determined by supply and demand so these sites allow you to purchase the currency with cash.
Hardware for Bitcoin Mining
For those wanting to start mining bitcoin, it’s important to know what equipment you’ll need for your computer and that you won’t be able to just go out there and buy everything you need on the cheap. The first thing is what type of hardware will be needed. Here are 3 different types of Bitcoin mining hardware:
Application Specific Integrated Circuits (ASIC) – These are designed for bitcoin mining and they’re used only once their activities have been validated. They’re designed to do one thing and they do it very well. It’s not uncommon for one of these to hold a full Radeon graphics card in addition to the bitcoin mining hardware so you won’t have any extra room in your case.
ASIC Rigs – These are used more than once and can be used with more than one type of currency. They’re called ASIC rigs because they use a specific type of microchip to solve the math problems involved with bitcoin mining far faster than traditional computers.
General Purpose Computers (GPGPU) – GPGPUs are designed to handle general math-related problems aside from bitcoin mining as well as rendering video, image processing, and other tasks such as 3D gaming.
The 3 above hardware types can all be used together and to get the most mining power out of your computer, you’ll want to combine them into a single mining rig.
Here are some basic steps for assembling an ASIC mining rig:
1. Buy the Right Set of Hardware
Before you buy hardware, it’s important cheap versions can be found online or at your local computer store but for you to get good results from bitcoin mining, you’ll want hardware that will last for a while and has good reviews. For this type of work, investing in something built for it will pay off greatly in the long run. Here are some popular choices for bitcoin mining hardware:
Nvidia Cards – The most popular cards here are the 6800 and 7300 series, which can be found on eBay, Amazon, or Newegg. They’ve been used with success by many miners to mine bitcoins.
AMD Cards – These are just as popular with Bitcoin miners as the Nvidia cards and are also recommended for use in your rig.
These cards allow you to mine bitcoins alongside other coins that have already been made available through their OpenCL driver. There are a couple of other things you’ll need to know about these though:
1) The card must be able to support OpenCL 1.1 or higher
2) You must install AMD APP SDK 2.0.3 or later
3) You must install the latest BIOS with AMD FirePro driver 1.2.1 and later installed
Some of the cards that currently support OpenCL programming are:
Geforce GTX 460, Geforce GT 440, Geforce GT 530, Geforce GT 630, Geforce GTX 570, Radeon HD 7870 (The card I’m using for this tutorial), Radeon HD 7950, and Radeon HD 7970 (The card I’m using for this tutorial).
2. Assemble the Rig
This step will vary greatly between people, but you must use caution when assembling your rig. You’ll want to avoid static electricity and short circuits by avoiding overly dusty areas or wearing a grounding wrist strap when working on the rig. Here’s a quick rundown of how to assemble a simple rig:
1) Mount your cards into your computer case.
To run the cards, they’ll need to be mounted in your computer case and powered through your power supply unit (PSU). It’s important that there is good airflow across all of the cards installed in your rig and that you have plenty of cooling fans inside the case.
2) Connect your graphics card power supply
These cards require a good amount of current to fire up and you’ll need to purchase a power supply unit (PSU) that can provide this. For the most part, these are all under $50 so it’s not too bad an investment. I recommend purchasing an Antec 1200watt power supply, which provides 1100 watts of power and has dual 12-volt rails for your rig.
I always keep an extra fan inside my case for cooling purposes and you’ll also want to make sure you have sufficient airflow across all of the cards installed in your rig. A large fan is important for pulling the hot air out of the case as well.
3) Power up and install your mining software
Once you’ve got everything in place, it’s time to power up your computer and install the mining software. For this tutorial, I’ll be walking you through how to get started with CGMiner (Windows only) but there are plenty of other options as well.
4) Run your mining software
Once you’ve installed the mining software you must understand how to use it and run it properly so that you can monitor or even control several different miners at once. Here is a great guide on how to setup CGMiner: http://www.coindesk.com/how-set-up-changeme-opencl-miner/
Once everything’s properly set up, you’ll want to run the mining software and make sure it’s starting correctly. CGMiner is one of the simplest options out there and I don’t think anyone will have a problem understanding how to use it.
5) Mine for Bitcoins!
You should already have enough information about your rig set up if you wanted to start mining with it right away but if you’re still not sure how to get started here are some quick guidelines:
1) Check the profitability of your rig.
It’s important to know how much money you can make with your rig before you start. If it’s not profitable, then there isn’t any point in wasting electricity on it. For my rig, I’ll be using the profitability calculator on coindesk.com and I get an estimated 0.26 bitcoins a month which works out to be $6.81 at today’s bitcoin prices which is well worth it for me.
2) Join a Pool
As of now, you’ll need to join a pool to get your bitcoins but there are several pools out there that will work as long as you know what you’re doing. For this tutorial, I’ll be using bitcointalk.org’s pool but there are plenty of others as well.
Pool data is usually sent to the pool operator’s website so you’ll need to consider that when choosing a pool. It’s also a good idea to mine at a pool with low fees and fast payouts so your bitcoins will be processed quickly and efficiently.
3) Don’t Skimp on the Power Supply
If you’re planning on running more than one high-powered graphics card then you’ll need to purchase a power supply unit (PSU) that can keep up with them. Most of the time it will depend on how much money you’re willing to spend but I’d recommend going no less than 80-90% of your card’s power consumption.
3) Don’t Get Caught!
You must take steps to secure your rig. Here are some things you’ll want to think about:
1) Put your rig in another room or closet. You don’t want someone walking in on it and accidentally destroying it or walking off with all of the equipment inside of it after they find out what it’s doing.
2) Stay as quiet as possible. The mining software will make your fans go crazy and it’ll be pretty noisy. Try to avoid making too much noise in your house or leaving the miner on when you’re not around.
4) Consider installing a security camera system. This is by no means required, but it’s a good idea to protect your investment.
5) Enjoy your fortune! Once you’ve turned everything on and everything works, you now have a rig that’s capable of generating bitcoins for free which means you’re earning money from day one when you set everything up.
You’re making money from something that would otherwise cost you money to use otherwise so you must take steps to secure your rig once it’s successfully running and working properly.