If you know anything about Bitcoin, you’ve probably heard the term bitcoin mining at least once or twice. We’re going to go over the basics so that you have a better understanding of what this is exactly – as well as give you some advice and tips on getting started mining bitcoins yourself. The good news is that it’s relatively easy to set things up, and once you do this you just need to sit back and make sure your computer keeps running so it can mine bitcoins and make you money.
What is Bitcoin Mining?
Basically, Bitcoin mining is the process by which individual bitcoins are created. The term refers to the act of using specialized software to solve cryptographic puzzles embedded in blocks or transactions. Once verified, the block becomes part of the Bitcoin Block Chain, which is constructed in chronological order based on all Bitcoin transactions. The more people that use Bitcoin, the more chances to “mine” new bitcoins – up to the 21 million BTC limit imposed by the creators of the crypto-currency.
How to Get Started
Here’s a quick look at exactly what you need to get started mining bitcoins for yourself.
Software – You’re going to need a Bitcoin Wallet to store your money, of course, but beyond that you’ll need to download software that connects to the Bitcoin network on your behalf to solve the math problems and add blocks to the block chain. The good news is that the software is relatively easy to set-up. The bad news is that software alone may not be fast enough for you to be able to make any money.
Hardware – While this isn’t necessary, it’s highly recommended. Because so many people have started mining bitcoins, the competition can be fierce to solve the math problems quickly enough to be rewarded with bitcoins. This is because a lot of smart people have developed external hardware that can attach to a computer via USB – not to mention entire server farms dedicated to mining bitcoins 24 hours a day seven days a week.
Joining a Group
Another option is to pool your efforts with a group of people around the world. This allows you to combine the processing power of everyone involved. Once bitcoins are mined, they’re split up between all the members of the group. This is a really good way to start mining bitcoins without investing in expensive hardware to be competitive. You’ll need to share the wealth, of course, but for some this is one of the best options to get started.
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