You want to mine bitcoins at home: follow this step-by-step guide

The process of mining bitcoins is carried out with the help of sophisticated hardware that solves a very complex computational mathematical problem.

A task like mine Bitcoin at home is a process by which new cryptocurrencies are introduced into circulation. It is also how the network validates new transactions and is a critical component of maintaining and developing the blockchain.

The process is performed with the help of sophisticated hardware that solves a very complex computational mathematical problem. The first computer to find the solution gets the next block of bitcoins and the process starts over.

Bitcoin mining is time-consuming, expensive, and only sporadically beneficial. However, the work has a magnetic attraction for many investors interested in cryptocurrencies due to the fact that miners are rewarded for their work with crypto tokens.

This may be because entrepreneurs see the task of mining bitcoins as a penny from the sky, like the gold diggers of the 19th and 20th centuries. And if you're technologically inclined, why not give it a go?

Bitcoin Mining: Is It Really For You?

Before you invest time and equipment, read this explanation to see if mining is really right for you.

When we talk about Bitcoin mining, we'll focus on Bitcoin (we'll always use "Bitcoin" when we're talking about the network or cryptocurrency as a concept, and "Bitcoin" when we're talking about a number of individual tokens), iProfesional said.

Thanks to the task, you can earn cryptocurrencies without paying for them. Those responsible for the mining work receive bitcoins as a reward for completing "blocks" of verified transactions that are added to the blockchain.

The reward is paid to the miner who is the first to solve a complex hashing puzzle. The probability that a participant in the process will discover a solution is related to the share of the total mining power in the network. What is Pump and Dump, read in this source.

To set up a mining rig, you need a GPU (graphics processing unit) or a dedicated integrated circuit (ASIC).

How to mine bitcoins: the new gold rush

The main attraction of a mining enterprise is the possibility of receiving a reward in bitcoins. That said, you certainly don't have to be a miner to own cryptocurrency tokens and dedicate yourself to the challenge.

You can also buy cryptocurrencies using fiat currency. You can trade it on an exchange like Bitstamp using another cryptocurrency (like using Ethereum or NEO to buy bitcoins).

You can even earn by making purchases, publishing blog posts on platforms that pay users in cryptocurrency, or even by creating interest-bearing cryptocurrency accounts.

An example of a crypto blogging platform is Steemit , which is somewhat similar to Medium, except that users can reward bloggers by paying them in their own cryptocurrency called STEEM, which can then be exchanged elsewhere for Bitcoin.

The bitcoin reward that those who dedicate themselves to mining receive is an incentive that encourages people to help achieve the main goal: to legitimize and monitor bitcoin transactions, ensuring their validity.

Because these responsibilities are spread among many users around the world, Bitcoin is a "decentralized" cryptocurrency that does not depend on any central authority, such as a central bank or government, to oversee its regulation.

Differences between cryptocurrencies

The task of mining bitcoins can seem daunting, especially given the industry jargon. However, with a little basic knowledge, this seemingly daunting process can become much easier.

Sometimes, confusingly, the names bitcoin, digital currency, and blockchain can be used interchangeably. However, the two are fundamentally different and it is important to distinguish between them before taking on the challenge of mining.

The best way to think about it is this: every Bitcoin (BTC) transaction is processed and stored on the Bitcoin blockchain.

As the name suggests, blockchain is a chain of blocks. Each block contains a new set of transaction data. The most recent block in the chain contains the most recent set of transactions.

Those who dedicate themselves to the work of mining bitcoins create new blocks. However, only one miner can create each new block. To do this, everyone must compete to solve a difficult mathematical problem.