As technology continues to advance at a fast pace, finance has followed the same footsteps. In today’s world where everyone is looking for new ways to invest and manage their finance effectively- bitcoin has become a leading indicator of that desire.
When Bitcoin was invented, it was considered as an unproven currency and many nations did not consider it to be acceptable. However, with the growing time, many nations including Australia have started to make peace with the concept of Bitcoins.
Major retailers such as Home Depot, Dell and Zappos are accepting Bitcoins as a mode of payment. You might be intrigued by the concept of Bitcoins and you must wonder ‘how to start bitcoin mining?’ well to understand that you need to first understand the insights of bitcoin.
What are bitcoins?
Bitcoin is not tied to any country or region for its economic value. It is 100% decentralized and powered by math which uses complex algorithms that run on powerful computers. What contributes the highest in the success of bitcoin is its accuracy and the methodical release of additional currency over time.
Miners can obtain bitcoins by accomplishing small tasks which help them earn bitcoins in return. Bitcoin mining is legal in Australia and is widely used by various retailers. From a cup of coffee to a billion dollar mansion you can buy everything by using Bitcoins.
Who is a bitcoin miner?
A miner’s job is to validate the accuracy of the transaction and note each transaction in a general ledger. When a person deals in bitcoins these transactions get recorded in a ledger which is called a blockchain. The network completes the task by recording all of this transactional data in a list that have occurred in a specific time period.
How does bitcoin mining work?
One might wonder whether bitcoin mining is profitable? Yes, sure it is. However, before you start bitcoin mining it is very important to understand what it really means. Bitcoin mining is done by running SHA256 double round hash verification process. This process provides validation to the bitcoin transactions and ensures security for the public ledger of the Bitcoin network.
The bitcoin network rewards the miners with bitcoins for their contribution. Let us understand step by step that how the bitcoin mining process works
Step 1: get the best bitcoin mining hardware
In some cases, it is required to purchase this hardware with bitcoins only. This hardware is available and can be bought from certain websites. You will also want to check the Bitcoin charts. another option to purchase Bitcoin is by cloud mining. However, this process is a bit riskier as you do not hold any control over the hardware.
Step 2: Download free Bitcoin mining software
Once you have got your hands on the Bitcoin mining hardware you need to download a special program that is used for Bitcoin mining. There are various programs that are available for bitcoin ming. The most popular ones are CGminer and BFGminer which are command line programs. You can learn in details about how to use this software from the instruction manual.
Step 3: Join a Bitcoin mining pool
Once you are through with the bitcoin software now it is time to join Bitcoin mining pool. Bitcoin mining pool is basically a community of miners that work together to maintain the records in the blockchain and share in its rewards.
It is important to join a Bitcoin mining pool as without doing so you can miss out on earning any Bitcoins. It is very convenient to share the work and split the reward with a much larger group. If you are looking for a fully decentralized pool, it is highly recommended to use p2pool.
Step 4: Set up a bitcoin wallet
The next step is to set up a bitcoin wallet so that any bitcoins that you receive during the mining process can be stored in it. There are various bitcoin wallets available that will help you with different operating functions. You can also use Bitcoin hardware wallets. Bitcoins are sent in your Bitcoin wallet by using a unique address that only belongs to you.
One thing that can be done to secure your Bitcoin wallet from potential threats is by enabling two-factor authentication. You can also ensure privacy by using an offline computer which does not have any access to the internet so that no virus or hackers can get access to it.
Step 5: staying up to date with Bitcoin news
Staying up to date with the bitcoin market is very important for your bitcoin mining profits. You can go through various articles or follow pages that regularly stay updated about the trends in the bitcoin industry. The use of Bitcoin has become quite popular in Australia. You can also learn how to mine Bitcoins at home and do it using some of the above-mentioned methods.