With cryptocurrency mining becoming more popular by the day, people are starting to realize how potentially lucrative this investment could be. Bitcoin is by far the most popular currency of all, which is why it’s important to understand what cryptocurrency mining is, what you’ll need for this process, and how to get started.
When you are ready to start with Bitcoin mining, you’ll need a few things, including knowledge on how mining works, how to start, what the best mining software is, what hardware you’ll need, and how to optimize your earnings. Let’s look at the basics.
What is Bitcoin?
Bitcoin is a cryptocurrency, or digital currency, that uses advanced encryption techniques to regulate transactions and generate new currency units. It cannot be altered without meeting specific conditions, and since it is a cryptocurrency, it works as an exchange medium. It uses Cryptography to secure transactions and control newly created currency units.
Bitcoin mining has become quite competitive, so it’s important to get familiar with the process to maximize your returns. Bitcoin mining is done around the world and uses the SHA256 double round hash verification process to ensure security and validate transactions.
How Bitcoin Mining Works
Bitcoin mining is quite a simple process. Only unconfirmed transactions can be mined, and once transactions have been confirmed as legitimate by miners, the nodes are spread throughout the network. It’s similar to a Peer-2-Peer network. Nodes add new confirmed transactions to the database and it then becomes part of the blockchain.
Bitcoin miners can earn by being compensated for their efforts. This reward is either from newly issued Bitcoins, or from transaction fees as they are validated. The more computing power you contribute as a miner, the greater your reward.
What You’ll Need
First, you’ll need to get the right bitcoin hardware. In earlier days, it was possible to use your own computer’s CPU and graphics card, but these days you’ll need much more. Modern custom-built Bitcoin ASIC chips are used, which refers to an Application Specific Integrated Chip, or a computer specifically built for cryptocurrency mining.
Next, you’ll need the right software. There are plenty of options available, including free Bitcoin mining software such as CGminer and BFGminer. Each has their own pros and cons, so you should compare them side-by-side and choose the best option for you.
Joining a Bitcoin Mining Pool
Once you are ready to start mining Bitcoins, it’s recommended to join a Bitcoin mining pool. These refer to groups of miners that work together to solve a block, and then also share the rewards. It’s not necessary to join a mining pool, but without one, you may wait months or even a year before you see real results. Some options include BitMinter, CK Pool and p2pool.
Join Bitclub Network and take advantage of our expertise in Bitcoin mining and the mining of other leading crypto-currencies. We’ve combined the power of crowd-funding to bring you a unique and timely opportunity to the bitcoin industry.
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