There are a lot of people who have heard about Bitcoins, but not all of them know exactly what a Bitcoin is. If this is the first time you’re hearing about Bitcoins, you may be a little late joining the band wagon, as it is pretty hard to turn a profit from Bitcoin mining these days.
However, if you still want to give it a try, today we’re going to explain you how to mine for bitcoins.
Bitcoin: What is it?
Bitcoin is a digital currency that operates independently of a central bank. Bitcoins can be generated, but at the same time they can be transferred to other people.
Bitcoin: How much is a bitcoin worth?
The more bitcoins are mined, the harder it will be to find more coins. In the past, by using a high powered PC, you were able to mine Bitcoins on your own. However, recently things are pretty tough and you will need to join a pool and mine with a “team”.
This way you and other people are essentially combining your computers to mine bitcoins. To make things simpler, for every block you mine you will get 25 coins. For now, each coins is worth around 238 dollars. In other words a block is worth around 5950 dollars. However, according to rumors, Bitcoin is already doomed and it may “die” soon.
Mining Bitcoins: Generating your own Bitcoins
If you want to mine a block of bitcoins with a single home PC, let us save you the hard work and tell you from the beginning that this is a bad idea. Your electricity costs will most likely be higher than how much money you will make from the mined bitcoins. Keep in mind that you will need to wait months or even longer, before you get any money. However, if you join a pool, you will get smaller payments, but more often.
When a block is completed, all the members from the Bitcoin pool will get a share based on the number of total “workers” who helped complete the mining of the block. Also, a fee of 2% will be deducted, which means that you will most likely end up earning around half the amount that your power bill is going to cost you.
You can also run the mining software on a computer for which you will not have to pay the electricity bill (such as the one from work). However, we do not suggest this for obvious reasons.
If you are still interested in using Bitcoin and mine blocks in order to make some money, here is a step-by-step guide on how to install and use the mining software on your computer.
Bitcoin: How to – step by step
First of all, you will need a wallet, because without it, you will not be able to withdraw your funds. This is similar to a PayPal account, where all your bitcoins will be stored. It is good to know that you can store the wallet on your computer or online. You will need to download a big “blockchain file to use the wallet. For an online wallet, you can try the coinbase.com website. Using a coinbase account, you will be able to use, buy and accept Bitcoin currency.
After you’ve set up your wallet account, you will need to join a pool such as the “Slush’s Bitcoin pool”. Keep in mind that there is always a risk that the pool owner will keep all 25 bitcoins when a block is successfully mined. When a block is mined, all 25 coins are paid to the pool owner. After that, the pool owner usually shares the bitcoins with the other members.
This is why you should use a pool that has a trustworthy owner. One of these pools is Slush’s pool. It has been operating since December 2010. The owner has always had stable and accurate payouts.
Now that you’ve joined a pool, you will need to install the Bitcoin miner on your computer. There are two types of miners: CPU and GPU. If you are a beginner, we suggest you use the Kiv’s GUI miner. There are a lot of articles out there, which will explain to you all you need to know about Kiv’s GUI miner.
Once you’ve installed Kiv’s GUI miner, you will need to login to your bitcoin pool account and insert your wallet address. If you didn’t create a wallet, just look above to where we’ve explained how you can do it.
Now you can register your workers. Keep in mind that each worker is a sub-account within your bitcoin pool account and that you can have more than one worker running from one single computer. Finally, you will need to enter your workers’ credentials into your Bitcoin mining software, hit enter in the main pool URL and your workers will start mining.
Bitcoin has been a very good deal in the past even though you will not earn as much money as before, it is still worth trying out.