Bitcoin, otherwise known by the symbol BTC, is a type of virtual monetary form that has gained acceptance as a legal form of payment in many countries, while still remaining banned in some.
The first step to entering the mining journey is to gain an understanding of what mining Bitcoin means. In simple terms, it is the process of virtually validating all input and output transactions made on the BTC network, and including them in the blockchain ledger.
A blockchain is a system that enables the maintenance and recording of all transactions made in BTC or any other virtual currency. These records are maintained across numerous computers that are connected together in a peer-to-peer network.
The mining of Bitcoin is a legal process, usually done by solving very difficult crypto puzzles in a bid to complete the verification processes.
How expensive is the mining process?
Mining Bitcoin can be seen as mining gold. The only difference is that it is done in a digital space. Both of these processes require intense energy, and both are very financially rewarding.
The 2 major reasons why people mine Bitcoin are: to generate income and to learn new skills. Your reason for mining falls under one of these two categories.
Due to the fact that the records are kept digitally, the risk of hacking, fraud, or copying exists. The validation process ensures that these risks are reduced to the barest minimum by making the process highly expensive.
As a result of this expense, single-handedly mining Bitcoin as an individual is not quite possible. So then, how do people mine? By joining a mining pool.
A mining pool is simply a combined team of miners who divide and combine their digital resources over a network. The funds they gather would then be shared equally, in accordance with the level of work each member contributed in finding a block.
Factors affecting BTC mining
There are certain factors that ought to be considered before mining BTC. These factors are listed below.
Rate of electricity
The average Bitcoin mining power consumption is 91 terawatt hours every year. Electricity is crucial, not just to power facilities but to prevent them from overheating as well.
Effectiveness of mining facilities
This is measured by the degree of complexity of the puzzle and the probability that the computations from your validating systems would solve the puzzle.
As everyone knows, the crypto market is known for being highly volatile. The current cost of Bitcoin will directly influence your return on investment.
Steps to begin mining Bitcoin
The following five steps would help you as a beginner in the mining process. These steps include:
- Getting the best Bitcoin mining hardware.
- Becoming a member of a mining pool.
- Downloading free Bitcoin mining software.
- Creating a Bitcoin wallet.
- And staying up-to-date with the latest BTC mining information.
With the rapid adoption of virtual currencies, the desire for involvement in the system increases each day. The digital age has ushered in a new dawn which is pushing away the traditional banking processes and introducing new online banking solutions, one of which is Bitcoin.