By Zachary Stone
Bitcoin mining is a critical process for maintaining the Bitcoin network. It is the process through which transactions are verified, and new Bitcoins are released into circulation. The people in charge of doing this are called miners, and you too can be one of them.
In this guide, we discuss the four major ways you can mine Bitcoin. We also advise you on the best option to use so that you not only mine effectively, but profitably. If you’re mining Bitcoin, it’s because you want some financial benefit right? But what is Bitcoin mining in the first place?
What is Bitcoin Mining
Bitcoin mining is the process through which transactions are verified and added to the blockchain. Miners use computers to solve mathematical puzzles that lead to this, as well as release new Bitcoins. There are thousands of Bitcoin miners all over the world, and anyone with the equipment and resources can join them.
There is a fixed number of Bitcoins a miner gets after mining a block, and this is reduced by half every four years. This is called Bitcoin halving. Out of the 21 million Bitcoins that will ever exist, over 19 million have already been mined.
With mining equipment that can produce hash power, you too can mine. So what are the ways to mine Bitcoin that you can use?
- ASIC
An ASIC is a special computer designed solely for mining Bitcoin. This is the most effective means of mining Bitcoin right now. They became necessary when Bitcoin’s blockchain grew and now requires a lot of computer power to mine.
They are quite expensive and require significant amount of energy to operate, but if you can afford one, you’ll have a good time mining.
2. CPU
This is the normal computer or laptop CPU that you know. It used to work when Bitcoin’s network had not grown this big. Right now, you can still use your CPU to mine, but it will not be so profitable for you, and your computer may get fried in the process.
Although there are computers with powerful CPUs being made these days, they’re still no match for Bitcoin’s network so it’s better to not use it.
3. Cloud Mining
This is a collective way of mining Bitcoin. Members of a mining pool contribute hash power towards mining and if they succeed, they share the profits. This works for almost anyone with zero knowledge of computer or mining. They only need to contribute resources towards making the pool successful.
To do this, you just need to find a mining pool and register, then buy hash power and contribute to the pool. This method is much more affordable than running your own ASIC. You only get to receive your cut of profits depending on how much hash power you provide.
4. GPU Mining
GPU is more advanced than CPU, in that it uses graphic cards to enhance the power of the computer used in mining, It is also a very popular way to mine, but again, the profits may not be anything significant. With your graphic card and other components, you just need a mining software installed and you can start mining.
Again, this is more expensive to set up than for a CPU, but it also rewards more than mining with your CPU since the power is enhanced.
Which is Best?
If you’re mining to make money, ASIC is best if you can afford to set up one. However if you cannot afford to set up your own ASIC, you can simply join a mining pool. It is even more expensive to run a GPU than to join a mining pool.
This is also advisable if you have the money but you don’t have the knowledge to run an ASIC. You’ll find a mining pool much more convenient and still benefit from the mining game.