The right hardware for mining bitcoins
This is how bitcoin mining works
Alternative to mining alone: Register at the mining pool
A selection of the best mining pools – also free
If you have registered on the platform, you can already buy and trade bitcoins. For mining through the platform, use the “Miner” link.
Another well-known cloud solution for mining Bitcoin is Shamining. Mining on the platform is the same as on other platforms. Shamining also offers a German interface. After registering, log in and start mining. After registering, you can select which contract you want to conclude on the mining platform under “Your miners”. Payment to participate in the pool is daily.
Tools and operating systems for mining Bitcoin and Co.
Minerstat Mining OS is also a popular operating system for mining cryptocurrencies. The system may be supported on computers that have compatible hardware installed. The supported hardware is on the download page to see. Various miners, i.e. mining tools/mining software, can be installed on the operating system. Mining OS supports most known cryptocurrencies. The operating system is also available via a free “Free Plan” for test purposes.
Coinfly: Mine bitcoins with live USB stick
Awesome Miner and Co.: Mining with Windows and Linux
Create the digital purse: the wallet
Investing in bitcoins is also possible without a wallet
Crypto Scalping: Gambling with Bitcoin on the stock exchange
Mine in the cloud
Mines using the Chromium-based CryptoTab Browser web browser
In summary: This is what you need
Alternatives to Bitcoin
Bitcoin versus Bitcoin Cash
What is bitcoin mining?
Bitcoin mining is a process in which computing power is made available to process transactions, secure and synchronize all users in the network. Mining is a kind of decentralized bitcoin data center with miners all over the world. This process is called mining, analogous to gold digging. Unlike gold prospecting, bitcoin mining has a reward for useful services. The payment of the respective bitcoin shares depends on the computing capacity made available.
In traditional fiat currency systems, governments or central banks print more money when needed. With Bitcoin , on the other hand, no money is printed. Rather, Bitcoin is mined itself or in the cloud (cloud mining). Around the world, computers mine (calculate) bitcoins and compete with each other.
How does bitcoin mining work?
Around the clock, people transfer bitcoins over the bitcoin network. The Bitcoin network handles these transactions by collecting all transactions of a certain period of time and putting them together in a list – the so-called block . It is the miner’s or prospector’s job to confirm and record these transactions in an ledger. He is paid for this in Bitcoin (the Bitcoin transaction fee).
Bitcoins Mining: Powerful hardware required
Hardware is one of the main arguments against mining as a source of income. To make real money, you need all kinds of equipment – you compete with companies that specialize in Bitcoin mining in large warehouses. The mining itself depends on a few factors. You need to consider various aspects such as your electricity bills, the cost of the related hardware, and other variables:
- The more bitcoin miners there are in a network, the more difficult it becomes to generate bitcoins.
- Bitcoin mining consumes a lot of electricity. With high electricity costs, mining is often not worthwhile.
- To start mining bitcoin, you need to join a mining pool, which incurs additional costs.
- For mining, you need the appropriate hardware – a so-called ASIC miner. Your desktop PC is usually not sufficient for this, since the electricity costs would be far too high to be able to operate the mining efficiently.
- Such an ASIC miner costs between 1,000 and 3,000 euros.
- When purchasing, be sure to check the “hash rate” of the device. This indicates how many hashes can be created per second.
- Of course, you should also pay attention to the efficiency of your ASIC miner: If the device consumes too much power, you may be making a loss.
- You also need a so-called bitcoin wallet on which you can store your bitcoins.
Register for bitcoin mining with a mining pool provider
Bitcoins mining is organized via so-called mining pools, in which users share their computing power together. When a bitcoin block is created, each user gets their fair share. In order to become a member of a mining pool, you must create an account there. We list two well-known mining pool providers here:
- Probably the largest mining pool is called Slush’s Pool. However, the provider is not undisputed .
- IQMining is also a popular mining pool where you can cash out not only in bitcoins, but other cryptocurrencies as well.
- Note: In addition to the appropriate hardware and a mining pool, you need suitable software for mining. These are, for example, the free command line programs CGminer and BFGminer.
- If you prefer a graphical interface, EasyMiner and GUIMiner are suitable . Finally, you need to set up your bitcoin wallet through a mining client. You can read more about this in the following chapter.
Set up a mining client
The mining pool account alone is not sufficient to successfully participate in bitcoin mining. You usually need a mining client for this. In this you log in with your previously created Miningpool account. Among other things, the mining client secures your bitcoins in a bitcoin wallet.
- Bitcoin-Qt is an open source project and currently one of the most secure mining clients. Here you do not have to worry about possible attacks on your virtual money.
- Electrum is also open source and trustworthy . The tool scores with 2-factor authentication, support for add-ons and the option to export your keys to other Bitcoin clients at any time.
- More experienced users check out Armory , which even allows you to manage multiple wallets on one computer.
If you are unsure whether Bitcoin mining would be profitable for you, you can use a calculator in which you enter your data. Here is the Bitcoin Mining Calculator .
How Much Does Bitcoin Mining Bring?
Bitcoin mining has grown in popularity in recent years. This makes it increasingly difficult to make a profit from mining. Bitcoin mining brings in around one million US dollars an hour for companies specializing in it (as of December 2020). However, bitcoin solo mining is less worthwhile. The success rate of hitting bitcoins is far less. Most solo miners cannot make money from bitcoin mining.
Is bitcoin mining worth it?
In order to make money from bitcoin mining, quite a bit of capital and time is required. They compete with companies that specialize in Bitcoin mining in large warehouses. For mining you need special hardware – a so-called ASIC miner. This hardware costs several thousand euros. In addition, Bitcoin Mining consumes huge amounts of electricity. If you consume too much electricity, you will make a negative deal with bitcoin mining. Solo mining isn’t worth it. Most of the time you will not be able to earn any income.
What did Bitcoin cost in the beginning?
In 2010, a bitcoin cost 0.08 cents. It wasn’t until February 2011 that Bitcoin became known in the mainstream media. At that time, the price rose slowly but steadily.
What is Bitcoin cloud mining?
A simple way to mine Bitcoins (BTC) or other digital currencies such as Ethereum (ETH) or Dash yourself is so-called cloud mining.
With cloud mining, computing power is booked in a cloud server and Bitcoins or other digital currencies are distributed daily into the personal wallet according to the booked computing power.
Cloud mining is therefore particularly interesting for users who do not want to buy any hardware themselves or who are simply too expensive to get started.
Bitcoin cloud mining can be operated at Genesis Mining , for example .
Generate a hash
The ledger is a long list of all the blocks. Accordingly, it is also called blockchain . The blockchain is used in bitcoin mining to be able to track all transactions at any time. Whenever a new block is created, it is added to the blockchain . This results in an almost endless list of all transactions ever made. The blockchain is visible to everyone. Accordingly, each user can see which transaction is being carried out. However, it is not possible to see who is carrying out this transaction. Bitcoin is thus transparent and pseudo-anonymous at the same time.
How to ensure that the blockchain remains intact and is never tampered with?
This is where the miners come into play. When a block of transactions is generated, miners put that block through a process. They take the information and apply a mathematical formula that converts the transaction into something much shorter, actually just a string of letters and numbers. This is also called a hash. This hash is kept in the block at the end of the blockchain .
Hashes have some interesting properties. It is quite easy to create a hash from the bitcoin block information , but nearly impossible to see what the hash was before. Also note that each hash is unique: if even one character in the block is changed, the entire hash changes.
To create a hash, the miners not only use the data of the transaction in the block , but also other additional data. Part of the data is the hash in the last block of the blockchain .
Since each hash of a block uses the hash of the previous block , a kind of wax seal is created. It confirms that the current block and the one before it are valid. If someone tried to manipulate a transaction by changing the block that is already on the blockchain , they would also have to change the hash. If someone checks the authenticity of the block with the hashing function, you would immediately notice that the hash does not match the one in the blockchain . The block would be immediately exposed as a forgery.
The competition for bitcoins
The miners compete with each other in the search for new blocks . Every time someone successfully creates a hash, they currently receive 6.25 bitcoins. The blockchain gets an update through the hash and everyone knows about it. With this incentive system, mining that keeps transaction processing going is rewarded.
The problem is that it’s very easy to hash a collection of data. So the bitcoin network has to make it harder, otherwise everyone would hash hundreds of blocks a second and all the bitcoins would be mined in a few hours. The Bitcoin protocol intentionally makes it more difficult for the miners by introducing a so-called proof of work – the mining difficulty increases over time.
The Bitcoin network would not simply accept any old hash. Rather, the block hash must have a specific appearance, such as a specific number of zeros at the beginning. There is no way of knowing what a hash will look like until it has been produced, as it completely changes its appearance with each piece of data set that is added.
Miners should not interfere with the transactions in the block . However, they must alter the data they use to create a new hash. They do this by using another piece of data again. This record is also called a nonce. It is used along with the transaction to create a hash. If the hash doesn’t find the desired format, the nonce is changed and the whole hash changes again.
Many attempts are usually necessary to find the right nonce. Therefore, the miners mostly work on the same network at the same time. If the nonce is found, the bitcoins are divided among all miners according to their performance. This is how miners ultimately earn bitcoins .
What do you need to mine Bitcoin?
There are different ways to mine Bitcoins . On the one hand, you can mine bitcoins from home with so-called ASIC miners.
Mine Bitcoins yourself
Popular Bitcoin miners are the Antminers. The miners are simply connected to a router via a LAN cable. These can then be configured via the web browser. No additional device or software is required as it is a standalone miner. The latest miners now also have an integrated power supply.
If you want to mine Bitcoin yourself from home, you need the latest Antminer.
The most efficient bitcoin miner at the moment is the Antminer S19 with up to 110 TH/s. The miners are simply connected to a router via a LAN cable. These can then be configured via the web browser. No additional device or software is required as it is a standalone miner . The latest miners now also have an integrated power supply.
Of course, mining can also be done professionally and on a larger scale. Miners.de eg. offers a complete package. Here the miners are securely hosted and managed and optimized by experts. In addition, customers benefit from lower electricity costs and savings in space and noise compared to self-administration.
What is a mining pool?
Mining pools work on the idea of collective mining . After all, those who dig alone need much longer to find new blocks. It is almost hopeless, since the required computing capacity would be far too large. The so-called mining pools provide a remedy here. The required computing capacity of all users is bundled here. This way you can find new blocks much faster. The remuneration in Bitcoin is divided among the individual users according to the computing capacity they have provided.
With the necessary hardware, you can now register with a reputable mining pool and start mining Bitcoin there as a collective .
Cloudmining and Ponzi
While it is increasingly difficult to mine bitcoins, cloudmining companies are multiplying. The principle is simple: you buy computing power and we promise to return to you, in the form of an annuity, a fraction of the bitcoins mined (after deduction of electricity and equipment maintenance costs).
The problem is that the vast majority of companies that offer this formula are simply scams. They do not have the slightest miner and are content to remunerate investors with bitcoins from the latest entrants, which is the exact definition of a Ponzi scheme.
The story usually ends after a few months, when there aren’t enough newcomers and the site owner decides to run away with the cash.
The list maintained by Puppet , a bitcointalk forum scambuster , is telling. Of the forty active cloudmining sites he has listed, only 10% really find favor in his eyes: Hashnest and KNCcloud first, and, to a lesser extent, Bit-x.com and Pow88.com . Puppet’s choices are based on eight criteria such as the presence of a public mining address, the support of a hardware vendor and the plausibility of the promises made.
How to generate bitcoins?
At first, your bitcoin client is going to have to download and verify the entire blockchain. This process is indicated by the rapid growth of the number of blocks (visible in the status bar). On a modern computer, it may take a few hours, after which it will start generating coins.
Your average coin making rate will be (6 * 25 coins/hour) * (the CPU speed / the total Bitcoin network CPU speed). Currently, generating parts can take years !
How long will it take you to create your first block and collect your first 50 Bitcoins? It really depends on your system, your luck, and the current state of the network. If you enter your hash rate below, this page will estimate your expected earnings per day, week, and month.