How to mine Bitcoin
The first thing to understand is that bitcoin transactions are based on blockchain technology – also called distributed ledger technology. Its essence is very simple: all information about bitcoin transactions is formed and stored in separate blocks of information. Each new block is added to the previous one, the old block cannot be changed, and since all transactions are stored on computers connected to the same network, it means that information about all bitcoin transactions is stored on a huge number of computers distributed all over the world.
Bitcoin mining is the support of an entire infrastructure designed to keep the entire network up and running. The essence of this process is solving complex mathematical problems with the help of special software installed on users’ computers. The process of obtaining bitcoins is not controlled by a center, but is distributed to all who wish to do so. Mining performs a number of important tasks:
- supporting transactions (transactions);
- protection of the network from the addition of invalid information;
- preservation of bitcoins from various attacks;
- supporting decentralization.
How to start mining Bitcoin
To begin with, let’s turn to the origins and tell how bitcoin mining was born and what it can be mined with now.
– When bitcoin first appeared, it could even be mined on an ordinary laptop using a central processing unit (CPU).
– The competition increased, and to maximize the income video cards (GPUs) were used, producing much higher hashing speed with a fairly good power efficiency and acceptable price of the devices themselves.
– The price of bitcoin and the complexity of mining continued to grow, and then the GPUs were replaced by ASICs. Powerful and easy-to-use devices instantly gained popularity.
– The number of miners was constantly increasing. Accordingly, the complexity grew and, over time, it was possible to catch a block even once a month or even once a year (depending on the complexity and luck). As a result, miners began to unite into groups (pools), and the mined bitcoins were divided according to capacity.
Thus, in order to start mining bitcoin you need:
- Choose the right equipment for mining. At the moment the most current model is Antminer S19, but you can also choose older models. It all depends on your budgets and preferences.
- Connect the equipment to your computer.
- Choose a mining pool that is suitable for you and connect your equipment to it.
- Start mining.
What mining equipment should I use, top Bitcoin mining equipment:
Bitcoin can be mined using asics. The leading place among all suppliers of ready-made mining equipment is occupied by Bitmain.
Also in the top are such vendors as: Canaan Creative (good AvalonMiner devices), Ebang Communication (Ebit) and Bitfury.
Current Bitcoin mining asics from Bitmain:
- Antminer S17 – 2020 model. There is an economy mode in which the power is reduced to 35 TH/s, and power consumption to 1470 w.
The average monthly yield is about $470.
Hashrate – up to 53 TH/s (Antminer S17), and up to 64 TH/s (Antminer S17e).
Price Antminer S17e – $2950 (On the Bitmain website).
- Antminer S19/S19PRO – model released in 2021. At the moment, the last and most powerful model.
Hashrate – up to 95 TH/s (Antminer S19); up to 110 TH/s (Antminer S19 PRO).
Power consumption – 3250w.
Mining machines profitability – $522 (Antminer S19) and $606 (Antminer S19 PRO).
Cost – about $2118 (Antminer S19) and about $3769 (Antminer S19 PRO).
When choosing a BTC mining pool, pay attention to the following characteristics:
- Functionality and geographical location of the pool (Check the usability of the platform, technical characteristics, protection against hacking).
- Available cryptocurrencies on the pools.
- Payment options and types of premiums for miners (Most common: PPS, PPS+, PPLNS, FPPS, PROP).
- Power requirements (Often pool commission depends on how much power you have.)
- Commissions (Pool commissions range from 1% to 5%).
The website miningpoolstats.stream will also help you choose the best mining pool. On it you can see the statistics of the mining pools, the actual hashrate and power of the pool.
The economics of mining Bitcoin
Just like in business, mining also depends on location. Each country has its own economy, its own laws, and its own conditions for using equipment.
- The price of electricity varies everywhere.
In many developed countries, electricity costs too much for mining to be profitable. At $0.15 to $0.25 per kilowatt hour, mining bitcoin in residential areas is too expensive to remain consistently profitable.
- There are different laws everywhere. Mining is illegal in some countries. In some, it is partially legal. And somewhere it is allowed without any restrictions.
Therefore, before you start mining, carefully read the laws and regulations of the country you are going to mine in.