How to mine Bitcoin: Mining Guide for Crypto Miner 2021

 What is Bitcoin Mining?

Bitcoin mining is a process of digitally adding transaction records to the blockchain. Crypto mining is a record-keeping process that is executed through enormous computing power.

Each of the Bitcoin miners in the world contributes to a decentralized P2P (Peer-to-Peer) network to make sure the payment network is secure and trustworthy.

The blockchain network is basically a decentralized P2P network that contains a shared ledger. The network has no central authority, so the transactions are recorded, processed, and validated in the miner’s network. The data shared over in the network is completely transparent, but the sensitive and personal data regarding the members ’identity is always anonymous.

Here, the miners require validating blocks of transactions to access their blocked rewards. Whenever a new transaction block is added to the system, a new BTC is introduced in the network. So, not only do they work to secure the network but also to verify the transactions. In order for the blockchain network to operate properly, miners need to work on the blockchain network.

In this Bitcoin Mining tutorial, you will learn:

What is Bitcoin Mining?

Why Mine Bitcoin?

Factors Affecting Bitcoin Mining Profitability:

Types of Bitcoin Miners You Can Get in The Market

Bitcoin Mining Pools

Cloud Mining

How to Mine Bitcoin

Shifting Rewards of Crypto Mining

Profitability Before and After ASIC

Comparison of Mining Hardware Profitability

Bitcoin Mining Best Practices

Why Mine Bitcoin?

Here are some important reasons for Bitcoin mining:

It allows transactions to be executed globally without government delays and restrictions.

Bitcoin is a currency which is globally accepted.

Using this cryptocurrency, you can quickly transfer your money to anywhere.

You can own money without worrying about transaction and tax fees.

Factors Affecting Bitcoin Mining Profitability:

Here are the important factors that affect Bitcoin mining profitability:

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Computing hardware

Miners should own the latest hardware to compute with an increasing need for successful crypto mining. They require specific hardware that can be costly. The popular hardware needed for Bitcoin mining is ASIC (Application-Specific Integrated Circuit) that can cost over $ 1500 per PC.

Power costs

Power is the primary operating expense. This cost can float from $ 0.03 to $ 0.08 per kWh (kilowatt-hour). A shift in the new century can make a difference in crypto mining profitability. Therefore, it is important that miners use power at a lower cost.

Bitcoin price

Bitcoin price is vital while crypto mining because miners will receive a certain amount of currency when they accurately solve the math problem. The demand of this cryptocurrency will get higher as the reservoir of available coins to mine shrinks or disappears. If Bitcoin becomes a more adoptable currency, it will be more demanded.

Types of Bitcoin Miners You Can Get in The Market

Here are the types of Bitcoin Miners you can get in the market:

CPU mining

This is old Bitcoin mining that was done using a normal PC with a regular CPU chip. This type of mining produces a lower amount of Bitcoins compared to the power cost needed to operate them.

CPU mining

GPU mining

It is faster and more efficient compared to CPU mining. The major drawback with GPU miners is that it cannot be useful in the current environment of Bitcoin. It will heat up too fast before you get any chance to earn your Bitcoin.

FPGA mining

FPGA (Field-Programmable Gate Array) is more efficient and fast way than CPU and GPU mining. This type of miner consumes less amount of power and provides efficient results. It is good to use FPGA with operating systems like Ubuntu. The full form of FPGA is Field Programmable Gate Arrays.

FGPA mining

ASIC mining

ASIC mining is manufactured for a specific intention. It was first released in the year 2013. This miner is fast, provides much more hash rates, and consumes less electricity. It can be used in either 32-bit or 64-bit OS.

ASIC mining

Gridseed mining

Gridseed mining is the latest crypto-mining technology and can produce higher hash rates in mining than other Bitcoin miners. It has the capacity to mine a single GridSeed unit and SHA-256 that consists of 5 GC3355 chips.

This microchip is capable of mining SHA-256 at around 11.25 GH / s and Scrypt (encryption method) at approximately 350 KH / s. Gridseed gives the best results to miners in this fast-evolving crypto world. It has gained more popularity due to its high speed, affordability, fast delivery time, and low usage of electricity.

Gridseed mining

Bitcoin Mining Pools

Bitcoin mining pools are groups operated and organized by third parties to manage hash power from miners worldwide. They share the resulting Bitcoin in ratio to the hash power that is contributed to this pool.

Miners combine their resources to make the mining process more effective. When pools succeed and receive Bitcoins, then they split the reward. This process depends on the power used by each miner. Therefore, the person that used the most power earns the largest reward, and small miners can help them to be successful.

Cloud Mining

Cloud Mining is a good option for you if you are interested in mining but not ready to buy costly equipment. It allows you to buy time duration on other people’s mining equipment. The most popular mining option is to lease other people’s processing power at remote data centers. This type of mining operation generally uses cloud computing so that software, servers, and storage can be accessed from any place and anywhere.

How to Mine Bitcoin

Here are the Steps to mine Bitcoin using ECOS:

Step 1) Open https://mining.ecos.am/en/ website in your browser.

Step 2) Then calculate your mining profit by selecting the contract parameters in the calculator.

Step 3) Click on “Buy now” button.

This will enable you to purchase and mine Bitcoin.

Step 4) Adding Order information.

Add Order information

Payment method

Click on “Buy now” button

Step 5) You need to fill the Sign-up form.

Enter your email, mobile phone number, and password.

Click on the “Next” button.

Step 6) Verifying mobile number.

Enter the verification code you have received in your mobile number.

Click on “Create Account” to create your account Login into ECOS.

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Step 7) Login into your account by clicking on the Sign In button. It is available at the top right corner of the website.

Shifting Rewards of Crypto Mining

Here is how mining rewards are shifting:

The network of Bitcoin is restricted at 21 million total cryptocurrencies.

It has been a basic requirement of the ecosystem since this digital currency was founded. The only limit is placed to attempt to control the supply of digital currency.

The new Bitcoin halves the number of Bitcoin rewarded to miners for finishing a block every four years. Initially, the number of Bitcoin miners received was 50.

In year 2016, the reward halved again to 12.5.

In May of 2020, it halved to 6.25, which is the same as the current reward.

Prospective miners must be aware that the reward size can be reduced in the near future, even as the difficulty is likely to increase.

Profitability Before and After ASIC

In the old days, miners were mining Bitcoin by just using their personal computer. They were able to earn profit for several reasons:

First of all, these miners had their own computer, so the cost of equipment was NIL. They could change their PC to run Bitcoin mining process effectively with less stress.

Second, those were days where professional Bitcoin mining centers with good computing power can be initiated to start mining cryptocurrency. The early miners just only had to compete with miners with their own computers.

The electricity costs varied depending on geographical region. Therefore, the difference was not enough to stop individuals from mining.

When ASIC came, the Bitcoin mining world changed. You can now have to compete against mining rigs that consume more computing power. It also becomes difficult to continue mining as you have to pay for high energy costs for running new equipment.

Look at the real-time mining hardware aggregator. The filter here is set to $ 0.06 kWh (kilowatt-hour), and the web portal shows only profit today, a maximum of 3 173.58 per day. This earning is possible by consuming high computing power of 2500W.

Gridseed mining

Comparison of Mining Hardware Profitability

There are many websites like AsicMinerValue, Nicehash, and CryptoCompare that enable you to calculate the profitability of a mining device. It is also possible to check the profit manually using the following formula:

This formula can be represented as the overall share of hash rate divided by the total issuance of the network in dollars. The input value required here is either fixed parameters, or they can be found on websites like Coin Metrics and Blockchain.com. You also need to subtract the electricity cost to find profit. The equivalence between kilowatts and kilowatt-hours is as simple as multiplying the usage of device power electricity price.

Bitcoin Mining Best Practices

Here are some important best practices while mining Bitcoin:

First, you need to do detailed research for the mining process and specific coins that you want to mine.

It is crucial to know that the mining ability depends not only on computing power but also on hardware to maximize your mining ability.

You need to know what the best Bitcoin miner is. It is good to understand the investment needed to make Bitcoin.

Compare the cost of Bitcoin miner you have chosen, time to tend it, stability, and the total number of hashes it can do for given time and electricity cost.

You need to be aware of the scammers because there are many sites selling Bitcoin miners.

FAQ:

What is Hashrate?

Hashrate is a measure of your computational power that is used to mine and process transactions on blockchain like Bitcoin and Ethereum. If you want to earn maximum Bitcoin, you require good computing power.

In 2009, the hash rate was measured in H / s (Hash per Second). It was pre-fixed due to the exponential mining growth.

Here are the SI units (International System of Units) that were prefixed:

Kilohash Thousands of Hashes / second (KH / s)

Megahash Millions of Hashes / second (MH / s)

Gigahas Billions of Hashes / second (GH / s)

Terahas Trillions of Hashes / second (TH / s)

Petahas Quadrillions of Hashes / second (PH / s)

How to choose mining software?

Here are some basic aspects while choosing mining software:

Operating system: You need to find the mining software that supports multiple operating systems.

Support of algorithm: Bitcoin utilizes the SHA256 mining algorithm. Your software should support it to mine digital currency.

Hardware support: You have to check the hardware needed to mine Bitcoin. Many programs support GPU, CPU, FPGA, and ASIC, while others only support particular hardware.

Efficiency: It is preferable that you choose low resource miners as they are quite efficient. However, they are hard to use.

Additional functionality: You have to look for some additional and good features like coin switching, remote access, and mining schedule from mining software.

How to choose mining hardware?

Here are the important selection criteria to choose mining hardware:

Purchase ASIC devices: You need to purchase ASIC device to successfully mine Bitcoin.

Common to advance hardware: Common hardware like CPUs, GPUs, and FPGAs are slow to mine Bitcoin. Therefore, it is better to avoid it and use advanced hardware.

Electricity consumption: Check the electricity consumption in Watts. Assuming two devices have the same hash rate, one must select the device that consumes less power.

How are Bitcoin miners paid?

The network recognizes the work of miners and provides rewards for generating new blocks. These rewards can be of two types: 1) a new Bitcoin that is created with each block, and 2) Fees paid by the user for the network transaction.

VfL Bochum vs. 1. FC Union Berlin Pool mining, which one can be more profitable?

Pool mining can produce a constant revenue of smaller values. On the other hand, solo mining can be inconsistent and takes years to come