Understanding bitcoins is just one aspect of jumping into the market. How can you make the most of your mining software to earn more bitcoins?
What Is Bitcoin Mining?
How did that fiver in your wallet get there? The U.S. government decided at some point to print and distribute it, and every business in the country (and others) agreed to accept it in exchange for goods and services.
But Bitcoin doesn’t have a central government. To create bitcoins, miners use special software to solve math problems and are issued a number of bitcoins in exchange. Bitcoin miners help keep the Bitcoin network secure by approving transactions (solving the math problems).
Bitcoin mining is intentionally resource-intensive so that the number of blocks found each day by miners remains steady. This mimics the rate of availability of commodities like gold.
So You Want To Become A Bitcoin Miner?
STEP 1: Buy hardware.
To begin mining, you have to use either a GPU card, FPGA or ASIC machine. If you’re just starting out, an ASIC miner will be best for you.
STEP 2: Download free software.
Your computer can become a bitcoin-mining zombie, even when you are not at the computer. If you want to mine more bitcoins, you need to buy some hardware.
Most popular software: BFGminer, CGminer, EasyMiner
STEP 3: Get a wallet.
You need a bitcoin wallet so you can keep track of and store the bitcoins you make from mining.
Make sure you store your address in a safe and secure place and consider making a hard copy to be stored in a secret place. If your computer crashes and you lose access to your bitcoin wallet, you will lose your bitcoins. No one gets them; it is like burning money.
STEP 4: Join a pool.
As more and more miners began competing for the limited supply of blocks, people found that they were working for months without finding a block and receiving no reward for their mining efforts.
This made mining something of a gamble. To even the odds, miners started organizing themselves into pools so that they could share rewards more evenly. Blocks are solved much faster by miners in pools, and bitcoins are distributed according to the amount of work each person put in.
Current market price of bitcoin
Blocks mined on a typical day
Number of transactions on a typical day
Time between blocks
Reward for discovering a block (this value will halve every 210,000 blocks)
Total number of blocks discovered
* Statistics through January 2014