Bitcoin mining: 2022 Complete Guide on How to mine bitcoins
Bitcoin mining is a confirmation of the trade in each bitcoin group.
VIDEO: What is Bitcoin Mining?
What is bitcoin mining?
Mining creates effective barriers that are used to add business records to the public Bitcoin (BTC) ledger. It is an important component of the Bitcoin network because it solves the so-called “two-payment problem”.
The issue of double spending relates to the issue of building consensus in business history. Bitcoin ownership can be mathematically proven by encrypting public technology, which cannot be undermined by today’s technology.
However, the encrypted image alone cannot guarantee that a certain coin has not been sent to others before. To create a common business history, there must be a unified order, for example, the time of each business. However, anyone who makes an external contribution can change it, so participants must trust a third party.
Mining (and usually whips) uses economic incentives to provide data in a reliable and trustworthy manner. Third-party sellers who ordered the transaction will be expelled and will receive an economic reward for the correct action. On the contrary, every mistake causes a loss of economic resources, at least as long as the majority of people are honest.
Bitcoin mining is achieved by creating a series of sequences that can be mathematically proven in the correct order with the specific use of resources. This process depends on the mathematical properties of the encrypted Hash method to encode data in a standard way.
Hash is a one-way encryption tool, which means that it is not possible to encrypt their input data unless every merger test has been tried.
Bitcoin miners do what they do: they go through trillions of hashtags every second until they find a way to fulfill the so-called “difficult” condition. A large number expressed in difficulty and hashish.
Therefore, the condition only requires that the hash be lower than the difficulty. Difficulty adjusts the bit rate for each of the 2016 bits or keeps the blocking time constant for about two weeks, which is how long it takes to find each new piece.
The hashtag generated by the miners is almost always used as a differentiator for a particular section, and it consists of the data at the beginning of the section. The main components of the hashish are the Merkle root – another aggregate hashish that contains the signatures of all the trades in this section and the unique hashish of the previous section.
This means that changing even the smallest items of a segment will significantly change the expected Hash and each subsequent segment. Nodes immediately reject this malicious version and prevent it from dominating the network.
Depending on the difficult requirements, this system ensures that the miners do the real work – spending as much time and effort as possible combining them. This is why the Bitcoin Agreement is called “Proof of Work” to distinguish it from other types of blockchain mechanisms. To attack the network, malicious entities have no choice but to restore all mining capabilities. It costs billions of dollars for bitcoins.
It’s a difficult thing for bitcoin users around the world to try to unite in a single transaction called “proof of work”.
According to the Bitcoin Agreement, if computers used in mining authentication have processing power, those who want to add additional business to the Bitcoin group must prove that the user has increased the scarcity of resources.
Miners compete with peers to earn bitcoins. The faster the processing power, the more difficult it will be to complete the device inspection, so that the bitcoins that the miner expects will also receive the bitcoin and the transaction fee.
The bitcoin network is evolving, ensuring that the miner has a mining time of about 10 consecutive minutes.
Bitcoin mining speed is called hash speed, and the processing power is called the hacking power of the hardware.
To get a little bit of technology and introduce some of the terms that are common in Cryptoworld, the mining process in Bitcoin mining hardware performs cryptocurrency at the beginning of a section.
For each new Hash test, mining software uses different numbers as random elements that are called unknowns.
Once a work certificate is generated by random calculation, a new section is essentially discovered, and then checked by a peer network.
At this point, the miner will be rewarded with a certain number of bitcoins, which are now 12.5 coins, but will be cut in half of all 210,000 streets. In addition to the coins received, minors also charge transaction fees paid by users within the successfully mined section. This is a big boost for miners as the number of bitcoins per piece continues to decline.
From start to finish: affiliate marketing, verification, work certificates, whips and the network
The end-to-end process can best be described by the following table, which shows the various stages from mining to obtaining the correct bitcoin and trading fees:
Step by step mining of bitcoins
Check the accuracy of the transaction.
Business is linked to department
The title of the last section is selected and inserted as a hash in the new section.
Proof of work is complete.
A new section has been added to the website and added to the peer network.
A new section was introduced.
The title of the last section and the title of the last section are combined to form a hash.
The hack number is generated.
If Hash is lower than the target value, PoW is resolved.
The miner is rewarded with bitcoins and trading fees.
If the hash is not lower than the target value, the calculation is repeated, which requires a mining process.
Difficulty digging step by step
More miners joined the network.
The rate of segmentation increases.
The average washing time was shortened.
The difficulty of mining is growing.
The obstruction rate decreases.
The average pit time is 10 minutes.
It lasts on average 2 weeks.
What is bitcoin cloud mining?
Bitcoin Cloud Mining Provides a means to receive newly mined bitcoins without having a bitcoin mining device or mining technology. This will not only attract the technical audience of the mining world, but it will also attract a wider audience that lacks the technical skills needed to start digging for bitcoin.
Bitcoin new employees have certainly welcomed the existence of bitcoin cloud mining. So what is the difference between bitcoin mining and cloud mining?
It is reduced to bitcoin mining hardware. For bitcoin miners, users buy, install and maintain bitcoin mining plants, which is not a matter of technology, as large electricity costs are also considered. The mine requires a lot of ventilation and cooling, not to mention 24 hours of processing.
Cloud mining is supported by mining companies that have built mining plants on their facilities. The cloud shovel has to register and buy or mine. Because the mining company does all the work and regularly returns to the cloud miner, the user has nothing else to do. The user is basically buying the hash power of some bitcoin miners.
One of the main problems with cloud mining is fraud. However, there are many reports of fraud, not to mention low profits, and even if bitcoin prices fall below a certain level, mining companies could close operations. Reduce the risk of fraud, including:
There are no mining addresses and / or pools to use.
The ASIC provider has no confirmation. If the ASIC vendor does not have an ad, the mining company may not have the hardware.
No image of hardware or data center of a mining company.
There is no indication of a ban on sales or how much hashish was sold compared to those used in the excavation.
Referral programs and social networks. A mining company that wants to pay a high transfer fee may have a Ponzi scheme.
Unnamed operators should be avoided …
No money can be earned by selling or selling your site.
Bitcoin mining hardware
Bitcoin has changed since the inception of bitcoin after the use of the CPU. However, as miners continue to use their technical skills to develop hardware that can earn more bitcoins and leave CPU and laptop users, mining is still working, but the use of laptops is now a bit off. Years.
Instead of CPUs, GPU miners have found that using high-quality graphics cards is more efficient at bitcoin mining. The use of GPUs has significantly increased mining capacity by 100 times while consuming significantly less power, thus saving significant power costs.
Then came FPGAs, Field Programmable Gate Aray, which increased power consumption, not actual mining speed. Mining is slower than GPU, and power consumption is five times lower.
Energy conservation, as it is known today, has led to the development of the mining business and the bitcoin mining industry, where bitcoin mining is generally controlled by a number of mining companies known as bitcoin.
From the FPGAs onwards, the mining community has relocated to a dedicated integrated circuit (ASIC), which is an ASIC chip that is designed only for mining purposes and does not provide another function.
Although the ASIC chip has only one function, it offers 100 times more power wash, while consuming significantly less power than the CPU, GPU and FPGA.
Program development has slowed as there is currently no hope for a market or ASIC replacement. The ASIC chip is best suited for making small changes and improving efficiency, although it takes time to come up with something newer and faster as the bitcoin world miners catch the laundry.
What is the proof of work?
Proof of work is also known as PoW. All sections of the Bitcoin blockchain contain a series of data called “nonces”. These are the meanings of the data associated with each part of bitcoin.
Mining equipment / computers must look for the wrong place. Because there is no easy way to find the wrong location, a random calculation is used by the mining company to calculate the correct data list.
So although certification is considered easy, it is difficult to produce proof of work. Creating a work certificate is a random process that requires the mining equipment to count as many as possible per second to increase the likelihood of a work certificate.
Therefore, hash-hashish / hashish functionality is an important factor in accepting a reasonable return on investment in a mining pool.
What is the difficulty of bitcoin mining?
Bitcoin mining difficulty is the difficulty of finding a special hash under the target while controlling the work.
The target value of the bitcoin is recalculated in each of the 2016 sections, and the hard value of mining is inversely related to the target value. As the mining difficulty increases, the target value decreases.
Basically, as more miners join the Bitcoin network, the impact of blockchains increases, resulting in faster mining times. As the mining time accelerates, mining difficulties increase, which, as mentioned above, restores the block speed to the desired 10 minutes.
After mining is difficult, the average mining time returns to normal and is repeated every two weeks.
How do you get bitcoin?
To start digging and becoming a node in a peer-to-peer network and create bitcoins, only an online computer is needed.
Wallets can be downloaded for free, as can wallet programs. You can download it immediately after downloading.
Practice has shown that neither your desktop nor your laptop can do it in the mining world. So you can invest a lot and build a mining industry, or participate in a mining group, or even subscribe to a cloud mining service, and the latter requires some care, just like any other investment.
In a mining pool, the company that manages the mine pays a fee, the mining ponds can handle several parts a day, and the miners who are part of the mine pay immediately.
At least you need a GPU and cooler for the mining hardware installed by the fans to keep the hardware cool. A stable internet connection is also required.
Two GPU manufacturers Ati Radeon and Nvidia, Radeon cards are considered much better than Nvidia card mining. Even if you try mining with GPUs and gaming machines, the costs are exceptionally low, and miners lose money instead of spending money, leaving more expensive ASIC hardware to do so.
The best ASICs on the market are very important in terms of price and power efficiency of each Hash in mining bitcoins, Antrouter R1, Antminer S9 and BPMC Red Fury USB. Antminer is priced at $ 2264.51.
How to make money by mining bitcoins?
Miners make bitcoins by finding work certificates and building barriers. The number of bitcoins that miners receive per unit of creation is 12.5 coins, and then the transaction fee per unit is about 1.5 bits coins per unit.
ASIC’s mining hardware is expected to sell for $ 2,500 and pay for itself in about 15 days. After that, it will eventually be reduced to the growth rate of the miners, who will need more computing power to raise the same money and charge a trading fee.
Basically, if you want to use a CPU or laptop, then mining is a possible choice, and yet you won’t make a lot of money, and if anything, it’s best to contribute to mining. If you don’t want to invest in hardware and accept electricity-related mining costs year-round, mining is the only real choice, as are the necessary upgrades and new equipment before use.
Can you get rich by mining? Bitcoin’s gratitude may be more than mining itself. Some mining pools have taken over most of bitcoin’s mining wells, making it difficult for new miners to participate in the war.
Users may have looked at cloud mining bills, but the real experience is owning your own mining plant and learning the techniques and processes of bitcoin mining, and you won’t learn cloud mining.
Like the real estate business, mining is about place, place, place.
The average electricity price in various parts of the world is different. In many industrialized countries, residential electricity is often too expensive for me and lacks economic vigor. With electricity prices ranging from $ 0.15 to $ 0.25 per kilowatt hour, mining in residential areas is very expensive and cannot be profitable in the long run.
Professional bitcoin miners often work in places where electricity is very cheap. Some of these are Sichuan in China, Iceland, Irkutsk in Russia, and some in the United States and Canada. These areas usually generate cheap local electricity, such as hydroelectric power plants.
The preferred price for these miners is usually less than $ 0.06 per kilowatt hour, and can usually be profitable even when the market is declining.
Price less than $ 0.10 is usually recommended for fixed operations. Finding the right place depends on the situation. People living in developing countries should not exceed their home, and people in developed countries may have higher barriers to entry.
In addition to the choice of hardware, the profits and income of individual miners depend on the market situation and the existence of other miners. In the bull market, bitcoin prices have risen sharply, making BTC dollars more expensive.
However, the active flow of the bull market will be complemented by other miners who will see the increase in profits and buy more equipment to help the income flow. As a result, each miner generates less BTC than ever before. Eventually the income balance was created, where inefficient miners earn less than they spend on electricity, turn off equipment and allow others to produce more coins.
Usually that doesn’t happen right away. There are some delays because ASICs sometimes cannot compensate for the rise in bitcoin prices.
In the bear market, the opposite principle applies: income is reduced until the miners begin to close their equipment en masse.
In order not to get too tired, the existing miners need to gain a combination of units and hardware that can stay ahead of their curve. They also need to continue to invest and recover, as more efficient hardware can completely control the profits of old miners.
Comparison of the advantages of mining hardware
Websites like AsicMinerValue, CryptoCompare and Nicehash have a number of online metrics that can be used to quickly track the benefits of mining equipment. Profits can be manually assessed using the following formula:
This is a formula used by many calculators. It only represents your share of the total luxury shared by the total dollar issuance of the network. The required input values are either fixed parameters (bitcoin blocking time is 10 minutes, so they are exploited six times an hour, 144 times a day) or they can be found on data sites like Blockchain.com or Coinmetrics.
To benefit, it is also necessary to reduce the cost of electricity. Thanks to the alignment of the kilowatt and kilowatt hours, it is very simple to increase the electricity consumption of the appliance by 24 hours a day and the price of electricity per kilowatt hour.
The table below shows the most important ASICs on the market today and their return dates. This means that it will take longer to invest in the current income. It is worth noting that the profits of the miners will change drastically over time, and moving one day to the future will have the wrong result. However, it is a useful standard for understanding the relative efficiency of any device.
From the table it can be seen that none of the ASICs can profit at $ 0.20 per kilowatt hour. Relative performance is essentially the same as any new generation ASIC, and older models can attract when power is cheap.
For example, the Kanan AvalonMiner 1066 has low energy efficiency, but the price is also very low, and although it is a fairly old model, the low power price is quite competitive between brackets. The previous generation ASIC Bitmain S17 Pro is still preserved due to low cost, but will soon become more attractive as consumption increases. MicroBT devices seem to be the most balanced overall.
The last notable number is that this table was compiled in the bull market. While profits will still expire by mid-2020, they can offset the loss with the release of bitcoins.
Purchase and configuration of hardware
There are several stores that sell ASICs to retailers, and some manufacturers also allow you to buy them directly. Although they are more difficult to obtain than traditional graphics cards, anyone can buy an ASIC at an affordable price. It is worth noting that import taxes will be higher if you buy from stores or manufacturers from abroad.
Depending on the manufacturer or store, the ASIC can be operated and then purchased separately. Some ASIC manufacturers sell their devices, but they may also use power supplies for servers or gaming computers, although they may need special modifications.
ASICs must be connected to a wired network that can be configured only through a browser by connecting to a local IP address as a home router.
Before proceeding, you need to create an account with the mining group of your choice that will give detailed information on how to connect to the servers. You must enter the link point and pool account information on the ASIC website. The miner then starts working and generating Bitcoin.
Mine is recommended by a defined group, as the hardware can be combined with others to make a steady profit. Even if your device doesn’t always find the right ax to block, your contribution will still be rewarded.
Bitcoin mining and risk
In addition to the financial risks of nonprofit, there are technical risks associated with managing high-performance devices such as ASICs.
Adequate ventilation is necessary to prevent the items from burning due to heat stroke. All of the miners ’power consumption spreads around it like heat, and an ASIC is probably the most powerful device in your home or office.
It also means you have to carefully measure the power grid. The electrical network of your home is designed for maximum performance, with each outlet having its own price. Exceeding this limit can easily lead to frequent failures or electrical fires. Contact an expert to see if your electrical appliances are safe.
To keep the equipment healthy, it is often necessary to resist dust and other environmental influences. Failure is a rare occurrence, but ASIC will be withdrawn sooner than expected without proper repairs.
Although individual ASICs may fail, their greatest threat to profitability has become obsolete. More efficient miners will eventually move old equipment.
Historic generation miners, such as the Bitmain S9, which was released around 2016, took about four years to become unsuitable for a power price. However, the speed of progress in computer technology is largely unpredictable.
Bitcoin mining is no exception for other companies. There are both opportunities and risks. We hope this guide provides a good starting point for a better assessment of both.
Is bitcoin legal?
All kinds of money in the world are created, approved and controlled by a single entity – most often the central bank. By law, ordinary citizens are allowed to buy, sell or keep money only. When others try to raise money, they inevitably find themselves behind bars.
When bitcoin was introduced, a whole new and unique pattern emerged. The world’s first digital, distributed currency that no one can control. In addition, the concept of bitcoin means that anyone with enough computing ability can produce currency just by being an active member of the community.
Police, tax authorities and police officials around the world are delving into the concept of cryptocurrency to find out exactly where it fits into current regulations and legal frameworks.
The legality of bitcoin depends on who you are, where you are in the world, and what you do. Here we are guided by legal issues related to bitcoin, where we are mainly US, but also other major countries.
Worried newcomers and their global warming, I’ll tell you
In many countries, the government is still trying to understand the bitcoin, so let’s not give it a legal definition. Many concerns have been voiced about his demotion. It is natural for government agencies to worry about financially unmanageable financial societies.
It is also suitable for exchanging and protecting human finances. Although the United States needs to adjust its exchanges, there are many foreign platforms. Indeed, the history of cryptocurrencies has suffered from sudden closures and escapes through human finances.
The most famous of these cases is the closure of the Mt.Gox replacement. In early 2014, the former well-known stock exchange filed for bankruptcy due to technical problems and the theft or disappearance of 744,000 bitcoin users. That figure was about 6% of the 12.4 million bitcoin in circulation at the time.
The semi-anonymous use of bitcoins is also a cause for concern. Although each transaction is recorded in a blockchain, it is easy for users to remain anonymous almost completely, as these records contain only public keys and transferable money.
Most of these worries came after the dark online market “Silk Road” caught the main attention of the media, as bitcoin was the only paid way accepted there. The market was later shut down by the FBI, but authorities are still worried that bitcoins will lure traders into illegal goods and services. In addition, the anonymity and decay of bitcoins worries that it will be used in money laundering and tax fraud programs.
What is Bitcoin Cash?
Bitcoin appeared nine years ago and is now stronger than ever. Now it is not only the first in the world, but also the most expensive, stable and popular secret currency.
Besides, it’s not perfect. One of the most pressing problems with cryptocurrency has been its expansion. Separately, it was the size of a company limited to one MB when creating bitcoins. This limitation introduces a significant delay in business processing and limits the number of transactions the network can process.
Bitcoin money was another story. Unlike other versions, it can increase the storage size from one MB to eight MB. The overall goal is to increase the number of transactions Bitcoin Cash can handle online, hoping that business magnates like PayPal and Visa can now compete with the amount of transactions they can handle.
Bitcoin money was launched in August 2017, making it the most successful bitcoin store in history.
History of difficulties
One MB size limit per section was originally implemented to reduce the likelihood of spam and DDoS attacks. Although there is not much business online, the check was ineffective.
With the proliferation of bitcoin, it has been blocked due to restrictions, which has unnecessarily lengthened the transition. The situation disappeared around May 2017, with some users reporting a four-day wait for confirmation.
Users are allowed to pay higher transaction fees to expedite the investigation. However this approach has made bitcoin unusable as a way to pay, especially in small businesses. For example, paying for BTC and a sandwich or cup of coffee just didn’t work, because 3 cups of coffee cost more than $ 15. Otherwise, the seller will get unintended dust.
The Bitcoin Society has come up with two solutions to this situation, namely Bitcoin Unlimited and Separate Witness (SegWit).
Bitcoin Unlimited completely removes the size of the restriction. Many miners have advocated for this solution, as the blockade will not only prevent blockage, but also increase the total wages of miners in each sector.
However, many developers oppose the proposal, believing that its implementation will lead to a cessation of the operation of small-scale miners, which in turn will lead to a huge interconnection of large-scale mining companies.
A solution for individual witnesses involves keeping some information in separate files outside the barrier. Developers say this could free up a lot of storage space, make the barrier more commercial and significantly shorten the confirmation time. However, many people think that this is a more complex temporary solution than the bitcoin currency.
The result was a compromise agreement called SegWit2x. The introduction of this agreement means preventing the blocking of certain information and increasing the size of the ban to two MB. The agreement took effect on August 1, 2017, after 95% of miners voted in favor of the proposal. However, the size limit of a network did not see an immediate increase. For many that means advancing the problem.
In addition, the decision seemed to apply to those who saw bitcoin as an investment opportunity, an unpaid system they created.
Also Read: Elon Musk and Bitcoin Miner say they want to look into the sustainability of cryptocurrencies
At an upcoming Bitcoin meeting in Arnhem, the Netherlands, Amaury Séchet, a former Facebook engineer, announced the first implementation of a Bitcoin cash deal called Bitcoin ABC.
Seth and his development team decided to abandon the SegWit2x deal and increase the size of the ban to eight MB. As such a drastic change requires the departure of the original bitcoin network, it was announced on August 1, 2017 that there will be severe repression.
For those of you who don’t know, hard software developers are the only way to upgrade Bitcoin programs. The developers split the network and created a new section that changed the rules. It is the same barrier until the original and mixed versions of the cryptocurrency occur when they are shared. Since then, the two networks have existed independently of each other.
After the split, all those who held the bitcoin in front of the hard drive received the same amount of bitcoin currency.
The new cryptocurrency was quickly accepted by investors, as bitcoin was the third cryptocurrency after Bitcoin and Ethereum at the end of the first day of cash availability.
Should I invest in Bitcoin cash?
Bitcoin didn’t last long for money, but it has already established itself as a very powerful secret currency. At the time of writing, it is the world’s fourth largest cryptocurrency behind bitcoin, Ethereum and Ripple. As of January 22, 2018, it is the second largest currency in the world against $ 1623 for BCH.
For many, bitcoin money has become the answer to everything that went wrong with the original bitcoin, and more and more new followers are gaining ground.
In general, every step of investment and trade involves risk. You need to research your own decision.
Does the price of bitcoin depend on the price of bitcoin?
Bitcoin money is a completely independent secret currency, so its price does not depend on the price of the original bitcoin. However, it is important to note that bitcoin is still the main secret currency in the world. So if it goes up or down, the vast majority of other cryptocurrencies may follow its trend.