Bitcoins For Miners: Everything You Need To Know

It’s hard to believe that just four years ago, one bitcoin was worth less than $2. Today, the same bitcoin is worth over $1,000. So it’s no surprise that more and more people are mining bitcoins, as the value of this cryptocurrency continues to climb. 

If you’re new to mining and don’t know where to start, these tips on bitcoins for miners will help you find everything you need to know about getting started with this business venture.

What is cryptocurrency?

Cryptocurrency is digital currency that uses encryption techniques to regulate the generation of units and verify transactions. While traditional currencies are created by governments, cryptocurrency is generated by a network of computers running complex software algorithms called miners. 

One reason you may want to learn more about cryptocurrencies like Bitcoin and Litecoin is because they could be valuable investments in years to come.

What are cryptocurrencies used for?

Cryptocurrencies are used for a number of things, with varying degrees of success. The first and most common use case is monetary transactions; Bitcoin, for example, was originally created as a means to facilitate transactions over the internet without having to rely on financial institutions or other third parties like PayPal. The second most common use case for cryptocurrencies is as an investment vehicle.

Why are cryptocurrencies valuable?

 Bitcoin, for instance, is a decentralized form of currency. Meaning it is secure and trustless. It is censorship resistant, meaning that no one can take away your funds or tell you what to do with them. 

Bitcoin also comes with built-in scarcity and some additional properties making it useful as a form of money. The supply of bitcoin is limited to 21 million bitcoins and that makes it so there will never be more than 21 million bitcoins in existence. This makes bitcoin scarce which adds usefulness as a medium of exchange. 

The demand for bitcoin has increased over time which increases its price over time. As people become aware of these properties, they tend to want their own piece of the pie which drives up demand even further increasing its price over time.

The use of Proof-of-Work algorithm

Bitcoin was created in 2008, by someone (or some group) that called themselves Satoshi Nakamoto. The name is derived from a Japanese pseudonym which can mean central origin or Central Intelligence. 

It is still unknown whether Satoshi is a real person or not, and most people believe it’s just a name for multiple developers who worked on Bitcoin. Satoshi created bitcoin as an electronic payment system based on mathematical proof. This means that transactions are recorded without any intermediary and they are verified through a process known as mining. 

In order to be able to make transactions using bitcoins, users need to run software known as a bitcoin miner. This software solves mathematical problems using cryptographic techniques, without revealing any information about them to other users of the network.

How do you get started mining cryptocurrency?

If you’re interested in mining cryptocurrency and have a gaming PC with a good graphics card, then mining might be a good way to earn some extra cash. I won’t get into all of the details here on Buy Bitcoin Worldwide (you can read more about that here), but mining is essentially using your computer’s power to solve complex math problems in order to validate transactions that help run blockchain technology. 

As an incentive for doing so, miners are rewarded with blocks of coins—that’s how new bitcoins are created. The catch? Mining isn’t free or easy. It requires a lot of computing power and it takes time to learn how to do it well—but if you want to start earning bitcoin now, it’s definitely possible!

Step 1 – Choose your mining hardware (CPU vs GPU)

Mining with your computer CPU or GPU is a thing of past. As you’ll soon see, it’s not profitable at all to mine Bitcoin with a laptop or desktop anymore! Most efficient miners are built for one purpose – hashing (mining) bitcoin. 

They do only that and nothing else. So they consume less power and generate less heat than computers designed for other purposes. That’s why you should use ASIC miner if you want to mine bitcoins in 2017. Step 2 – Choose a mining pool: After choosing appropriate mining hardware, you need to join a mining pool. 

 While there are some solo miners out there still, most prefer joining pools due to better reward distribution and more frequent payouts.

Step 2 – Download a mining software

There are several mining software options out there. The two most popular are CGMiner and GUIMiner. We’ll be using GUIMiner in our tutorial, so if you choose to use a different mining software, some of these steps won’t apply. In addition to a mining program, you’ll need to download GUIMiner for your operating system.

 Go ahead and download it now so you have it ready for when we move on to step 3 below. Step 3 – Get your miner online: Once you’ve downloaded GUIMiner, open up a command prompt (if you don’t know how to do that, here is an easy guide). Now type cd downloads without quotes into command prompt. This will change directory to where your files are stored.

Step 3 – Join a mining pool

If you intend to join a Bitcoin mining pool there are a few things you should look for. First, you want to be sure that they are operating in a trust-worthy manner and with sound security practices. It’s also important that they have been around for awhile and are highly trusted in their ability to process transactions quickly and accurately. 

Additionally, you will want to find out how much of your share of payouts go towards transaction fees and what kind of hardware is used by them (and if it can mine other cryptocurrencies). Lastly, make sure that your investment is safe – look into insurance options available to you through them or third parties.

Step 4 – Set up your miner(s) and configure settings

As we mentioned earlier, all you need to do is set up your miner and then point it towards a mining pool. We’ve written a detailed guide on setting up your ASIC miners and tweaking settings for maximum efficiency. See: How to Setup an ASIC Miner . 

But if you have trouble with that or don’t want to mess around with configurations, there are pre-configured ASIC Bitcoin miners available. There are several reputable companies selling them such as Avalon (China), Bitmain (China) and Butterfly Labs (US). If you just want bitcoins then buy them from one of these companies; they will ship you a machine pre-configured with everything you need to get started.

Step 5 – Run the miner(s) and grab some coins!

Now that you have your miners configured, you can start them up! If you’re using more than one miner, run them in a unique screen session. When each session is finished, press CTRL+A and then CTRL+D to get back to your first screen. In future sessions, use ctrl+A to go to an older screen. Use ctrl+C to copy all of your worker information from one session into another. Use CTRL+SHIFT+F1 through F6 for additional terminal screens if needed. The output will look something like below when it starts running:

The output above shows three workers starting up at roughly 8pm. The first two are on my laptop with integrated graphics (Intel HD Graphics 4000), while my main computer has a dedicated graphics card (NVIDIA GeForce GTX 660). Each worker has its own difficulty setting, which determines how many hashes it needs to calculate per second in order to receive coins. The higher your hash rate, or total number of hashes per second, the more likely you are to win coins.