Bitcoin and Cryptocurrency Mining – What is It and How Do I Do It?

Bitcoin and crypto mining in essence is getting fractions of coins in exchange for allowing your computer/processing power to solve complex algorithms to keep the blockchain going in as efficient a manner as possible. The below video explains how.

Bitcoin mining used to be possible through ones own computer, but with Bitcoin having exploded in popularity, to use your computer might cause it to burn out and earn maybe one cent a year. That is no longer a feasible option.

The other options are either a) Hardware miners (e.g. Antminer), which can range from a few hundred dollars in cost to a couple of thousand dollars, or online miners like Genesis Mining. The concept is you are generating money in exchange for electricity.

Assuming you are willing to cough up the money for a hardware miner, there are two popular types: GPU/CPU and ASIC.

GPU/CPU miners utilize the power of ones own video card/s as well as CPU processor chips. With a desktop computer and a relatively recent video card you can mine coins. It’s recommended that a) you mine any coin other than Bitcoin or Ethereum since those are oversaturated at this point (Monero right now gives the most bang for it’s buck), and b) you use powerful video cards, ideally multiple in setting up a GPU rig. While this isn’t nearly as powerful as an ASIC miner, it’s not as noisy or hot.

ASIC miners are dedicated miners that crank out more alt-coins than GPU miners. The biggest downsides to this are a) the noise, b) the heat generated, and c) the electric bill which will at least triple in price. If you can address those concerns then ASIC is a much better option.

Both options from the outset are not cheap but the flip side is that you in theory will make your money back, even after the cost of electricity.

More details on how to set up an ASIC miner can be found here.

 

If and/or when you eventually do purchase the Antminer, please use the below link.


Know What to Mine

What is meant is that, some cryptocurrencies are relatively easier to mine than others. For example, unless you have a top-scale bitcoin mining rig, it may not be worth your while. You can always mine other cryptos and then exchange those for Bitcoin under one of the numerous exchanges.

There are some software/video card miners like Minergate that allows for “smart mining,” which determines what cryptocurrency will give you the best bang for your buck (as of this writing it’s Monero – Bitcoin and Ethereum are way too competitive). If you want to see what’s the best yourself, resources like whattomine can help.