Bitcoin mining is an essential process in the bitcoin world. It generates new coins and at the same time helps to validate bitcoin transactions. Mining can be used either for growing your profit or even for getting your first bitcoins. How can you mine bitcoins? There are several (better and worse) options to generate bitcoins: mining on your own, bitcoin cloud mining, browser mining and other methods.
How bitcoin mining works?
Mining is the process of solving difficult mathematical problems, which results in issuing this digital currency. Computers mine for coins by competing with each other.
Mining bitcoin on your own
All you need for the process is a computer. Is bitcoin mining worth trying? The short answer is no. But not because it’s difficult.
You can buy hardware, install software and start mining bitcoins on your own right away. If you want to try, start with this tutorial. But the problem is the power. To get bitcoin miners use special software to solve math problems and are issued a certain number of bitcoins in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine. But this takes a lot of power. For small time players, it is simply not profitable enough. The cost of the power consumption makes this a difficult business.
Also as computers around the world mine for coins by competing, mining on your own can be painfully slow and inefficient. With increasing mining difficulty, mining with lower-performance devices can take a very long time before block generation. What you should do at the first place is to join bitcoin mining pool – a pooled mining service that allows multiple users to work together to mine bitcoins more efficiently. But even with pooled mining, competing with big corporations with the latest state-of-the-art bitcoin dedicated hardware can be very hard.
Bitcoin cloud mining
We believe cloud mining is the best option to generate bitcoins at the moment if you do not own a lot of hardware. These guys have designed hardware and software specifically for BTC mining (also cloud hashing) so that their hardware uses less power and makes the mining process faster and more efficient.
There are many cloud mining service providers out there. We only list a few here, check bitcoin cloud mining providers list for more.
As soon as you purchase GHS (a unit of bitcoin mining facilities), the process of mining will start right away. Unlike buying your hardware, with cloud-based GHS you will not face such problems as waiting for the delivery, installation problems, dealing with equipment maintenance, etc. In other words, you are leasing a set amount of computer power for some time.
Bitcoin browser mining
Browser-based mining is the practice of utilizing web browsers as bitcoin miners through means of plugins, applets or scripts. There is usually no download and configuration needed. But since browser mining is highly ineffective the amount of generated coins is very minimal, you should treat this mostly for fun. Update: Sadly, all providers went down – we will update this thread when new players appear. Stay tuned, till then you can browser mine other cryptocurrencies at Minergate or Coinhive.
Is bitcoin mining profitable?
Unfortunately, this is a difficult question to answer. Bitcoin mining profitability depends on many different factors. In order to find out mining profitability bitcoin mining profitability calculators were invented. They take into account different parameters such as the cost of your hardware, electricity cost and other network related variables that you do not have an influence of and give you an estimate of your projected profit. Here is one at Minergate and this article will certainly help you to calculate mining profitability. See how much we make with cloud mining.
Bitcoin mining pool shares
You can participate in a bitcoin mining pool also by purchasing shares of companies that invest in mining companies and not by buying bitcoin mining facilities directly. For example Havelock Investments invests in bitcoin mining facilities and other bitcoin-related businesses. You can buy shares of their investment funds and get dividends and profits. There is no minimum investment, so you can spend something minimal and see if you like them. They just join cloud mining services and buy hardware and contracts instead of you and share profits with you. The question is why you would invest with them and not invest directly? The answer is that figuring out what cloud mining companies are worth investing (what are profitable?) is not that easy and they do it instead of you. We get regular dividends.
- Please check bitcoin cloud mining section.
- Indirectly you can invest in bitcoin mining by putting your bitcoins into bitcoin savings account. This way your coins will be used by various Chinese mining companies to fund their operations. You get interest in exchange.
- There are other options to get bitcoins.
- Instead of mining, you can just trade bitcoin mining facilities. See GHS trading.
- There have been unsubstantiated rumors that China is going to ban Bitcoin mining which has seen sentiment and the market turn negative. If the Chinese are going to ban Bitcoin fully, then it would be logical they would also ban bitcoin mining, as it is a means of converting Chinese electricity to capital outflow [2017-09-24].
- Inside one of the world’s largest bitcoin mines. One of the world’s largest bitcoin mines is located in the SanShangLiang industrial park on the outskirts of the city of Ordos, in Inner Mongolia, an autonomous region that’s part of China [2017-08-18].
- Japan’s Finance Industry Embraces Bitcoin Mining: Japan’s major players in the financial industry, like SBI Holdings or GMO Internet, are eyeing bitcoin mining with a goal of generating new revenue. They also hope to help set the ground rules for using bitcoin. Japan’s GMO and DMM.com said they were moving into the mining space [2017-10-16, source].