If you are thinking about getting involved in bitcoin mining, it is important to understand everything that is involved before you get started. Bitcoin mining appeals to a lot of people because you will be rewarded for your work with crypto tokens. Nevertheless, before you invest the equipment and time, continue reading to discover everything you need to know.
The key points regarding bitcoin mining
Let’s begin by highlighting the key points with regards to bitcoin mining…
- By mining, you will be able to earn cryptocurrency without having to put down any money for it.
- When you complete ‘blocks’ of verified transactions that are added to the blockchain, you are going to get bitcoin as a reward.
- The miner will receive mining rewards. You will first need to find a solution for a complicated hashing puzzle. The total mining power on the network influences the probability that the participant is going to be the one to find the solution.
- Double spending is a term you will need to know about. This is a phenomenon whereby a bitcoin user spends the same tokens again illicitly.
- To set up a mining rig, you are going to need an application-specific integrated circuit (ASIC) or a GPU (graphics processing unit).
What do bitcoin miners actually do?
Bitcoin miners are helping to stop the double-spending problem that was just touched upon. You will be paid for your work as an auditor. You will need to verify prior bitcoin transactions. This is something that has been designed to keep the users of Bitcoin honest. The founder of Bitcoin, Satoshi Nakamoto, came up with this idea.
How much does a Bitcoin miner earn?
The amount a Bitcoin miner earns is changing all of the time. The most recent statistics, for November 2019, show that you can earn 12.5 Bitcoin for your reward if you complete a block. Of course, to figure out how much this is going to make you, you will need to look up the price of Bitcoin at the time you’re reading this post. However, at the time the statistics were revealed, bitcoin was work around $9,300, which would mean you would earn around $116,250 for completing a block. However, don’t forget about your mining hosting costs, equipment costs, and any other expenses you may have.
You will need equipment to get started
If you are to mine in a competitive manner, you need to invest in the most powerful computer equipment. A lot of people use graphics processing units, i.e. a GPU. However, more and more people are turning to application-specific integrated circuits (ASIC). These can cost anything from $500 to tens of thousands. This all depends on the model that you purchase.
So there you have it: hopefully, you now have a better understanding of bitcoin mining so you can determine whether or not this is the right choice for you. Make sure you learn everything you need to know before you dive right in.