In the world of cryptocurrencies, Bitcoin mining is a common term, especially for those who are familiar with Bitcoin investment. What does Bitcoin Mining actually mean?
Bitcoin Mining is the process of earning Bitcoins by solving very complex mathematical equations. To carry out Bitcoin mining, you need a huge computing power and a very powerful computer to solve math problems faster than the other miners. The computers used by miners will run a software that connects miners to the Bitcoin blockchain to solve mathematical problems. The miners’ computers are known as nodes. For those of you who are interested in mining Bitcoin, there are several things that are needed to support Bitcoin Mining activities. Here are some things you need to know about Bitcoin mining:
- Bitcoin Mining Rig
To start mining, all you need is a mining rig, a piece of hardware to support Bitcoin mining. In the early days of Bitcoin mining, miners could use ordinary computers or graphic cards. However, these days, you are unlikely to mine any Bitcoin if you use these devices or you will take a long period of time to mine Bitcoin in small amounts. Currently, miners generally use hardware specifically designed to mine Bitcoin. The hardware is ASIC (Application-Specific Integrated Circuit). It can perform complex mathematical calculations quickly and with multiple results. These devices are expensive and time consuming to manufacture.
There are several types of ASICs sold in the market with different capabilities or performance (hash rate), electrical power, and prices. Remember to calculate the projected profit that you will earn from the Bitcoin mining device and don’t forget to calculate the cost of electricity, the mining pool, and the level of difficulty. For example, for the Whatsminer M32-70, it requires 3,360 watts of electrical power and a circuit voltage of 220V 20Amp. This device is priced at $6200 or Rp. 89 million (Rp14,363).
- Bitcoin Wallet (Bitcoin Wallet)
Bitcoin Wallet serves to store and transact Bitcoins. The Bitcoin wallet provides a cryptographic control of blockchain addresses. Every Bitcoin wallet has 2 types of unique codes, called a public key and a private key. The public key may be disclosed to the person who wants to send Bitcoin to your wallet, but the private key cannot be known to anyone except the wallet owner. There are several types of Bitcoin wallets, namely desktop wallets, mobile wallets, web wallets, and hardware wallets. Learn about the different types of digital wallets in Tokenomy Academy episode 49.’
- Mining Pool
To mine Bitcoin, you can do solo mining or mine with others in a mining pool. Mining pool is a group of crypto asset miners. Every miner who joins the mining pool contributes power in the process of creating new blocks. The profits obtained by joining a mining pool will be distributed evenly to all group members. The advantage is that fewer resources are needed. However, members must pay a fee to the operator, usually the fee is in the range of 0%-2% of the profits.
- Mining Software
In addition to hardware, miners need software to support Bitcoin mining activities. Mining software is required to maintain the security of decentralized cryptocurrencies and can also help users set up Bitcoin wallets. Some of the well-known software among miners are BFGMiner, CGMiner, EasyMiner, AwesomeMiner, MultiMiner, etc.
Are you interested in Bitcoin mining? Don’t forget to always follow news about crypto and diligently monitor Bitcoin prices so that your Bitcoin mining activities are more profitable.
There are several types of Bitcoin mining namely pool mining, cloud mining, or solo mining. What is the difference? Let’s go through the following explanation!
- Pool mining.
As explained above, pool mining is a sharing of power resources to mine Bitcoin. By joining a mining pool, the power is shared equally with fellow members. As such, mining profits will be divided equally and the profits can be earned more consistently. However, there is a fee charged for joining a pool or floating pool. This type of mining is recommended for beginner miners.
- Cloud mining.
This method is a mining process that uses the power of cloud computing.With cloud mining, you need to pay a third party to do the mining for you. This type of mining is considered easier because you do not need to purchase a mining device. Usually, cloud mining users only need to rent a mining rig or hash power. In cloud mining, there are two types, Host Mining and Lease Hash Power. This method is suitable for those who are new to the world of mining. However, you also need to be careful in choosing a service provider to avoid scam.
- Solo mining.
If you do not want to share your profits, then the solo mining method is for you. Solo mining is a process where miners carry out the entire Bitcoin mining operation themselves without involving other parties. When there is a new transaction, all miners in the Blockchain network will receive a mathematical problem and the device will start looking for a solution. To mine by yourself, the costs are of course much higher, but the profit you gain is also maximised.
If you are interested in Bitcoin investment but are not ready to mine yet, get started with Tokenomy Earn. With Tokenomy Earn, you can get rewards just by making a deposit, without the need to master trading skills or purchase Bitcoin mining tools. You can also stake easily with Tokenomy Earn. Investing with Tokenomy Earn is safe and secure. All you need to do is to register and verify your identity, then deposit the asset you want and specify the amount to be staked. Once that is done, all you need to do is relax and wait for profits because your assets are definitely growing with Tokenomy Earn.