A Guide To Bitcoin Mining

By Avatar on
March 21, 2014
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In normal money system, governments print money when it is needed but in bitcoin system bitcoins are mined, this process of discovering bitcoins is termed as Bitcoin Mining. There are three ways for obtaining bitcoins: 1. Exchanging bitcoins 2. Getting in return of good or services 3. Finding new one.  Now the question arises how to start using bitcoin mining?

Getting started with Bitcoin Mining

Becoming a bitcoin miner is just three steps away. Please read on to find that:

Step 1: Setup hardware

In early days it was possible to mine with your desktop PC but now you require specialized hardware. Hardware with ASIC chips are required, whose capability is 100 times more than normal computers. All you need is the best hardware and the full time internet. Bitcoin mining needs an open source software and specialized hardware; the faster your PC will be the faster you will get bitcoins. As a starter you can start with your normal PC.

Step 2: Set up your bitcoin wallet

As the concept is digital so first of all, all you need is to get a bitcoin wallet. Bitcoin Wallet is analogy to actual wallet or to a bank account. Like the physical wallet we will keep the digital money in that wallet to keep it secure. Before using bitcoin wallet, you should know:

  1. Bitcoin is digital currency
  2. Security of bitcoin is as important as our paper money
  3. Bitcoin price is volatile. It can increase or decrease very quickly
  4. In bitcoin world bitcoin address is the user’s identity.
  5. Bitcoin transaction details for any address can be seen over the network by anyone.  However, the actual identity of user is only disclosed in special cases
  6. User cannot roll back a bitcoin transaction but yes you can be refunded by the receiver.
  7. Using bitcoin does not free you from taxes.
  8. Keep backup of your wallet on safe location if your wallet get lost (.dat file on your PC or any device) crashes, your all transactions would be lost. The bitcoins will be lost.

There are three ways to set up wallet: Web, desktop and mobile. Desktop one is most reliable. You can use web as well.

Down load free software from http://guiminer.org/ or  https://bitcoin.org/en/download. Your  software will download the block chain and it will take long time to download the block chain in public ledgers. You can even order block chain to get on DVD as well (http://startbitcoin.com/products-page/). Just leave it running and see if you get lucky. If you are solo mining don’t expect to see any funds go into the account. You might see nothing for 2 months and then all the sudden there is 50 bitcoins in there. You might never see any go into your account. That’s the risk of solo mining.

Below is the screenshot for the main screen of bitcoin-Qt wallet software.

Step 3: Getting Address

Using your wallet you can send, receive the bitcoins, you can view your transaction history, you can add new addresses to your wallet, you can export the history of transactions using this client software but first of all you need your wallet address. Here you will find your wallet address. It is a long address composed of digits and alphabets. You can get the QR code as well

Step 4: Joining pool (optional)

To get bitcoins quickly, you can use following ways:

  1. Get free bitcoins from faucets like http://freecoins.herokuapp.com/. You will receive confirmation in an hour.
  2. Receive bit coins
  3. Join mining pool. In mining pool, miners jointly tries to find the bitcoin and share the reward like Slush pool(http://mining.bitcoin.cz/) or 50BTC.com(https://50btc.com/dashboard)
    1. Go to the link and click sign up here link
    2. Register account
    3. Activate your account
    4. Login to your account and add worker
    5. Download miner program like GUIminer, cgminer or 50miner
    6. After launching miner program you will be asked to enter URL, Username and password.
      URL – pool.50btc.com:3333
      Username – worker you have created in Mining tab.
      Password – just type in pwd

If you are facing any problem in bitcoin mining please feel free to ask in the comments section below.

 
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