Many people may find the term “bitcoin” familiar, but the majority people who buy Bitcoin do not actually know what it is and how it works. Bitcoin is based on cryptocurrency, a digital form of currency, and it is stored on the bitcoin blockchain for users to easily access it if they need to send cash to another user.
Bitcoin was first launched in 2009 under an anonymous software developer named Satoshi Nakamoto. Until now, Satoshi Nakamoto does not disclose himself to the public.
Apparently, using bitcoin allows users to send their payment electronically without any assistance from the bank or payment centers. Tracking transfers are also possible on the blockchain or commonly referred to as “giant ledger”. Each “block” is based on an encrypted Merkle Trees, a useful tool in detecting fraudulent files. Whenever a corrupt file is determined, the blockchain automatically protects the other blocks from damage.
What Is Mining?
Each person in the circle is the one responsible for verifying each transaction. Bitcoin rewards each successful miner with a portion of bitcoins through their built-in reward system. The process makes use of Application-Specific Integrated Circuits (ASICS), a hardware system similar to CPU computers. ASICS is specifically built for bitcoin mining only.
Mining is not a relatively easy task as it requires effort, power, and sufficient money to fund the operations. Due to the high population rate of miners, the competition in achieving their main task is difficult to acquire for beginners.
Setting Up a Bitcoin Miner
Setting up a bitcoin miner can be convoluted as it truly requires a deep understanding of the entire process. However, your determination in understanding how the program works will eventually make your experience with bitcoin easier.
· Choose Your Hardware
In order to have the most suitable hardware for mining, you need to make sure to check on the hash rate and energy consumption. For awareness, you can manually calculate the number of hashes you acquire for every watt by dividing the hash count by the number of watts.
· Calculate Your Mining Profitability
Prior to purchasing, you need to calculate the profitability of your miner with the use of the Tradeblock mining profitability calculator. Listing your equipment cost, hash rate, energy consumption rate, and current bitcoin price helps you visualize when you will be able to regain from your investment.
· Download The Software
You must download software in accordance with your chosen hardware. If you opted for GPU and FPGA, your computer will need the standard bitcoin client and the mining software.
o Standard Bitcoin Client
This software is necessary for you to begin your transaction with your bitcoin clients. The installation of the software takes long, but once you have successfully downloaded it to your computer, you can immediately start relaying information between your miner and the bitcoin network.
o Bitcoin Mining Software
This mining software, which is available for Windows, Mac OS, and other processors, processes information and gives instructions to the hardware. ASIC hardware might need this software as well, albeit other new models are already pre-programmed for easier usage.
Overall, bitcoin has enticed people from across the globe to join the network as it does not require any bank transactions. As for being a miner, the entire process is actually not that tedious as long as you have sufficient funds in choosing the right equipment for faster return of investment.