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How to Mine Bitcoin – Guide and Tips for 2022

Updated on February 12, 2024

Have you ever wondered how to mine bitcoin? And can you also mine cryptocurrency? It is not excluded. But you should take into account that such mining requires equipment with a large power. And lots of electricity to go with it. So let’s take a look at how Bitcoin is mined. We will reveal how long it will take you to mine your first bitcoin. And you will also learn what the meaning of the expression proof of work is. Ok lets go.

How Bitcoin Mining Works

Mining Bitcoin and any other cryptocurrency is a very important process, during which individual transactions are verified and encrypted. Cryptocurrencies are based on the proof of work system. Proof of work means that a decentralized network of users participates in the entire cycle of functioning of cryptocurrencies. They are located all over the world. There is no need for a third party to mediate individual transactions.

Individual users will take care of that as well. And how? Just through Bitcoin mining. You could say that mining Bitcoin is a job like any other. You simply verify individual transactions, encode them into individual blocks, and get paid for it. In the form of Bitcoin, of course. Well, that’s what mining is built on. To better understand this, it is ideal to look at how cryptocurrency actually works.

How cryptocurrency works

If you are interested in cryptocurrency, then you surely know that it is a virtual currency that exists only in the digital world. It is a currency that is not controlled by any central authority, as is the case with the currency of individual states. So there is no such thing as inflation here. On the contrary. The value of Bitcoin is determined only by the ratio between supply and demand. Everything is therefore under the thumb of users who deal with Bitcoin in some way. This is the already mentioned proof of work system.

Each of these users must own a crypto wallet where they store their digital currency. Transactions then take place between these individual wallets. And all these currency movements are stored in a public ledger called the blockchain. And since it is a virtual currency, the blockchain must be subject to high security against hacking. Or cryptography. In the blockchain, individual transactions that took place at a specific time are verified and sorted into blocks. They are then locked and arranged next to each other. Well, it is precisely this verification and locking in blocks that miners are tasked with.

Bitcoin mining and operation

It is precisely because of the miners doing this work that these transactions are possible. And also more and more bitcoins exist because of them. And that is also the reason why these bitcoin transactions are completely free. Miners get paid for them in Bitcoin. Of course not yours. By mining Bitcoin, new units of this currency are created. And you can also incentivize them with a small fee to want to deal with your transaction. This can speed it up.

However, even Bitcoin is not inexhaustible. There is a limited amount of it. Only 21 million can be mined in total. So the estimate is that this number of miners will be reached around 2140. This is also the reason, in addition to the ever-rising value of Bitcoin, that the resulting reward for miners is gradually decreasing. When fully mined, miners will need to be incentivized by fees in a currency other than Bitcoin. Otherwise, the Bitcoin network would cease to function. This is because there would be no verification of transactions and their encryption.

Bitcoin mining progress

So how exactly does mining take place? Although Bitcoin mining may seem complicated at first glance, it is not a science. The entire mining process begins with individual users making their transactions. This means they are sending Bitcoin from one wallet to another. Each of these transactions needs to be verified, sorted into a block and then locked. And that is precisely the job of the miners, who must be equipped with the appropriate equipment. This means a very powerful computing device.

In reality, Bitcoin miners have to solve a very complex mathematical puzzle. This is called a hash. First, it is necessary to assign a numerical code to each block where the transactions carried out at a given time are sorted. This is called a nonce. A hash is then generated based on these nonces. The first miner to generate a hash based on their nonce gets a reward. This locks the block and the miner goes to solve another math puzzle.

How long does it take to mine 1 bitcoin?

Of course, you will also be interested in the length of this entire mining process. You should know that substituting individual nonces and generating the resulting hashes is a very fast action. The computer calculates this hash based on complex algorithms more than a million times per second. However, the question of how long you can manage to generate 1 bitcoin is quite complicated. If only because miners don’t only get 1 bitcoin for solving their puzzle.

In fact, their mining reward is higher. As we already mentioned, the amount of rewards for mining has decreased significantly since the beginning. And this in connection with the fact that bitcoin supplies are running out. But also in connection with the fact that Bitcoin has risen in price a lot. When Bitcoin appeared on the market, the price for mining one block was set at 50 Bitcoins. However, it is gradually decreasing. In such a way that every 210,000 blocks will be halved. This happens roughly every 4 years. The last time this reward was reduced was in 2020. To 6.25 bitcoins.

And how long will it take you to get such a reward? It will only depend on how successful you are in mining. In general, it takes around 10 minutes to mine one block reward. But that doesn’t mean you get 6.25 bitcon every 10 minutes. Don’t forget that you are competing with other miners when you are trying to calculate the correct hash. And whoever solves the puzzle first wins.

How to mine bitcoin at home

It’s naive to think that you just need to buy a powerful computer, connect to the network and you’re good to go. That’s not how it works at all. In fact, you probably won’t do well as a lone bitcoin miner on your home computer. Why? Because you have too much competition. After all, we have already talked about the fact that today bitcoin mining is mainly reserved for large companies. Especially the Chinese ones. And they have a really large number of devices that will compete with yours in mining.

Fortunately, there is a solution to this problem. And that is the mining pool. In simple terms, we can say that it is an association of several miners who have joined forces to return their investment in mining. These mining pools are organized and coordinated by third parties. So you have to account for the fee to this coordinator as well. The way it works is that miners who come together on a mining pool share their rewards and divide them among themselves. Thus, they can achieve stable bitcoin income. So if you are getting ready to mine bitcoin at home, definitely consider getting involved.

How to start mining bitcoin

How to actually start such mining? We will guide you step by step.

Prepare yourself first

Before you decide to mine any cryptocurrency, calculate whether it’s worth it. The entry and operating costs of Bitcoin mining are relatively high and may not be covered by the earnings from your activity. And that is precisely why today Bitcoin mining belongs to large companies. These expenses include quality equipment as well as lots of electricity.

If you still decide to mine bitcoin, your first steps will be to the trade office. You mustn’t forget that you need to set up your own business for this activity. And another thing you should not forget is that all cryptocurrency earnings are also subject to income tax. Don’t forget to include this when you calculate all your mining expenses.

Create a crypto wallet

In order to have somewhere to store your mined bitcoin, you need to own a virtual crypto wallet. There are many types of these wallets. You need to create your own key for each of them. You need to know this in order to be able to use your virtual currency as you wish. You simply cannot get to it without entering this key. The most secure option is a hardware wallet. Your cryptocurrency will be the safest with it. All transactions then take place between these crypto wallets.

Buy a suitable device

If you have already taken all the steps mentioned above, you can start choosing the right mining technique. But beware that it is not something cheap. You have a choice between two options. You either get a graphics processor (GPU) or special hardware (ASIC). Today, ASIC is almost exclusively used for Bitcoin mining, which is much more powerful. You can get this device at different prices. And usually the higher the price, the better the performance. You then connect the Taro device to the computer and use it to control it.

But it pays to have more of these ASIC miners. More precisely, the better. You also have to realize who you are competing with. Usually with large companies that have a huge number of such devices. In addition, the system reacts to the number of devices that are currently solving the same mathematical operation. The higher the number of devices working on one math puzzle, the higher its difficulty and vice versa. This means that the lower the computational level you have, the less chance you have that you will be the one to extract the reward for a particular block.

Join the mining pool

Today, an individual mining Bitcoin on a home computer has very little chance of success. The competition in mining is really great. It is therefore quite likely that your initial and operational investment in mining may not return to you. There are two ways to solve this. The first one is that you can choose to mine another cryptocurrency. And the second is that you join forces with other Bitcoin miners. The mining pool works exactly on this principle. But that was already discussed today.

Download the program

There are plenty of mining software that you can download and install on your computer for free. These programs are designed to perform complex mathematical calculations. In addition, they are able to distinguish which algorithm is the most advantageous for mining. After downloading it, you will still need to connect it to your ASIC miner, which will need to pass a performance test.

 And last but not least, you will need to enter your miner account. Thanks to this program, you will subsequently have access to all the necessary information. Even before you decide on a specific program, it is a good idea to join the already mentioned mining pool. You will meet miners here who can recommend one of the programs.

Start mining

If you have already completed all the previous steps, there is nothing stopping you from starting Bitcoin mining. Just connect to the device where you have the program installed and connect your hardware to it. At best, hardware. And then you can start mining the reward for solving the first math puzzle.

In the initial stages, of course, it can only be an additional income to the existing job. But who knows, maybe you will like bitcoin mining and it will become your main job. And if, on the other hand, Bitcoin mining does not excite you, you can try mining another currency. Or maybe even two at the same time.

Bitcoin mining on mobile

Yes, it really is. You can also download a cryptocurrency mining program to mobile phones. But judge for yourself whether something like this is worth it to you after everything that has been said here. After all, a really powerful device is needed to mine virtual currencies. Plus a lot of electricity. mining apps for these currencies often drain the smartphone battery. This is also the reason why operating systems prohibit them. It would be nice if all you had to do was download a bitcoin mining app to your mobile phone and benefit from it. But don’t be fooled. Mobile performance is too small to be true. Therefore, beware of such applications. It could be a virus.

Bitcoin Mining – Yes or No?

If we look at the advantages that cryptocurrency mining brings, it is clearly a proof of work system. Thanks to the proof of work system, the Bitcoin network works completely independently. Without depending on a single specific organization. This network consists of many users. And they are spread all over the world. Once one user makes a transaction, another user, namely a miner, validates and encrypts it. For a reward in the form of Bitcoin. So it’s mining that keeps this whole system going.

The disadvantage of mining is that it may not be profitable for private domestic miners. Bitcoin mining today takes place in large centers. They have a huge amount of powerful hardware. For you, as a domestic miner, it may be unrealistic to compete with them to mine any of the blocks. This can also mean that your investment may not return to you. One possible solution to this problem is to join a mining pool.

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