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Guide: Here’s Why You Shouldn’t Mine For Bitcoins
You may have come across some articles lately that report the value of Bitcoin has passed the USD 4,000 markNot surprisingly, this has led many Bitcoin or cryptocurrency-related forums to explode with activity, with those looking to enter the cryptocurrency scene asking veterans the ways to own bitcoins, so to speak.
For many people, the idea is Buy bitcoins is a bit out of reach. After all, a single Bitcoin costs way too much money than most could afford. See as buying is not a viable option, many have adopted the idea of Mining Bitcoins instead.
Bitcoin prices as of 9/26/2017
Considering that anyone with a decent computer can certainly turn it into a “Bitcoin miner” mining for Bitcoin will be an easier way to get in on the whole cryptocurrency craze, right? While it is undeniable that the actual mining for Bitcoins is easy, those who actually want to profit from mining Bitcoins will soon be faced with one simple truth: Mining Bitcoins is by far the most difficult way to make a profit with Bitcoin
This is why.
How do you mine Bitcoins?
Before we get into why mining Bitcoins won’t get you rich quick, let me give you a quick overview how someone can mine Bitcoins
So let’s assume the person who wants to mine Bitcoins has mine taken all required steps (purchased the necessary hardware and Bitcoin wallet), the person should do so now download a mining programMost of these mining programs are open source, the most popular are the CGminer and BFGminer, both of which are command line basedFor those not that fluent with command lines, EasyMiner is a popular one GUI option
Once the miner is configured to the user’s specifications, all that’s left for the person to do let the miner runThus, the person started mining Bitcoin.
Judging from the brief description above, many of you would think Bitcoin mining is not that difficult. Unfortunately, as with many things in life, the difficulty is in Making a profit through Bitcoin mining is in the details
Why is Bitcoin so hard to mine?
Once upon a time then Bitcoin, and cryptocurrency in general was still in his children’s shoes, it was possible for people with quite powerful computers to mine them without too much hassle. Fast forward to 2017, for mining Bitcoins you have to invest in highly specialized hardware to go anywhere.
The reasoning behind the hardware requirements lies in the way a Bitcoin is mined. Without going into too much detail, one must first mine a Bitcoin to mine successfully solve a math problemThis problem becomes a Hash, and solving it requires the use of computing power provided by the miner’s computer.
In the early days of Bitcoin, there were fewer people mining for BitcoinsAs such, those who mined Bitcoins could usually get the coins in a reasonable amount of time using some pretty powerful hardware. As more and more people started to jump into Bitcoin mining, it instantly led to a increase in computing power
In fact, the creator of Bitcoin designed the currency in such a way that only one certain number of Bitcoins would be released every day. So, after four years, the number of Bitcoins generated would be halved. The halving of generated Bitcoins continues to everything There are 21 million Bitcoins in circulation
To support this model, the Hashes would be generated become more complex over time, necessary ridiculous amounts of computing power to solve it
With this system in play, mining a single Bitcoin requires an amount of computing power not feasible for an everyday computer, which is why those who want to mine Bitcoins usually take it seriously Invest in dedicated Bitcoin-specific hardware, join a Bitcoin mining pool, or do both at the same time
ASICs – The Bitcoin-specific hardware
When it comes to modern Bitcoin mining, the world has moved on from CPU, GPU and Field Programmable Gate Array (FPGA) methods and decided to use Application Specific Integrated Circuit (ASIC) machines instead. These devices are pretty much computers designed to do just one thing: my Bitcoins.
The Antminer S7 – an ASIC miner
While there are ASICs that are affordable, the premium stuff can get pretty pricey with some of them crossing the $ 1,000 mark. But let’s say you managed to dig up the money required to buy an ASIC means you will be able to mine up some sweet, sweet Bitcoin? The short answer is no!
Because of how complex hash is today, you need an army of ASICs before you can solve themThis is why those who mine Bitcoins will do never advocate anyone doing it solobecause it is completely impossible to do so.
Bitcoin mining pool – Sharing the tax with other miners
Since mining a Bitcoin requires computing power that no one can provide on their own, many miners have since joined up to a Bitcoin mining pool
As the title may have told you, Bitcoin mining pools are groups of miners who work together to mine BitcoinsAfter successfully solving a hash, the miners will be in the pool rewarded according to the computing power they provided
For the average miner, mining pools are pretty much the only way they can acquire Bitcoins through mining. Mining in a pool is usually a better option as it ensures that you get something out of the entire mining process.
While mining pools is certainly a better option than mining Bitcoins solo, don’t think you can make a profit with it too. Because of the way mining pools work, many of the miners will be in it receive only a fraction of the single Bitcoin
As such, if it computing power that you have supplied to the group is negligible, you could very well be rewarded with as little as 0.00001 BTC (0.04 UCD) for your efforts. Forget the profit, this amount isn’t even enough to cover your overhead costs.
Put bluntly, there is no profit to be made in mining Bitcoins these daysThose who want to make a profit in Bitcoin are better off buying a Bitcoin from an exchange and sitting on it until the Bitcoin price rises again.
However, if you are interested in mining, I would recommend that you try other alternative cryptocurrencies instead. However, if you were hoping that mining cryptocurrencies would be a great secondary source of income, be prepared for disappointment.
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