How to Make Money Mining Bitcoin
Do you want to make money mining Bitcoin? This cryptocurrency has been in the news so much that it can be tempting to get involved in some way. Rather than purchase Bitcoin at an exchange or through a crypto trading exchange, you can get the right computer setup, as well as the correct programming, and then make money mining Bitcoin. Since it’s inception bitcoin has been the best performing asset in history even with our current bear market, mining can be very lucrative. Here’s how you can get started.
Bitcoin is a Cryptocurrency
To begin with, we need to emphasize that Bitcoin is a cryptocurrency. This means that it exists solely in the digital realm. You can’t hold a Bitcoin in your hand. You can, however, spent it, as long as you find a shop that accepts it. These are becoming much more common as the cryptocurrency takes off.
Normal currencies are backed up by the federal governments of the countries that they originate from. In some cases, as with the Euro, there are numerous countries involved. What makes them different from Bitcoin is the fact they are traditional money. You can hold a Euro. They are a centralized, physically existing form of currency.
Bitcoin is not, which makes it somewhat mysterious and far more interesting. When you add in the fact that you can make money mining Bitcoin, it’s no wonder that people are jumping on board.
What to Do First
Before you run out and buy the equipment that you need in order to make money mining Bitcoin, you first need to sign up for a virtual Bitcoin wallet. This is the place where your Bitcoin will go once you earn it. Everything will be tied together. There are a number of them to pick from, so the choice is really yours.
Why do you need to do this first? Well, once you’ve mined your own Bitcoin, it needs to go somewhere. If you want to spend it on goods and services or even sell it, you need to have that wallet set up. Otherwise, your Bitcoin will end up floating around on the internet, homeless. Think of your virtual wallet as being a little like a real one – you need to place all of your money somewhere. Once you have this setup, it’s time to move on to the next step – mining.
The Basics of Mining Bitcoin
In order to earn your first Bitcoin, your computer needs to essentially solve a code. That’s how you make money mining Bitcoin. This is a bit more complicated than it sounds. Since Bitcoin is a virtual currency, every transaction needs to be verified. The miners are paid in Bitcoin for verifying these transactions. There are millions of lines of code that go into this process, but you only need to process roughly one megabyte of them.
However, you must be the first person (or your computer needs to be the first) to come up with what they call the “proof of work.” This means that you can prove that you were the first person to process this transaction and come up with the correct solution to the mathematical problem. As you can imagine, there’s a lot of luck involved as well.
The people who mine for Bitcoin individually do so with very powerful computer systems. While they only need to process one megabyte of data, which sounds extremely small (as it is), they need to do this incredibly fast in order to be the first to finish. This is why there are cloud mining companies that can do this for you. They can help you make money mining Bitcoin.
Cloud Mining Companies
There are several large cloud mining companies that can help you make money mining Bitcoin. However, you first need to purchase their services. Yes, there’s a bit of an investment here. These could mining companies have their clients form pools. The more clients in a single pool, the more people you’ll be splitting that Bitcoin with once it’s mined. However, the odds of success are better using this method, since you’ll have more computers working together on the mining efforts.
Think of it this way – if you wanted to find gold in an abandoned mine, would it make more sense to go alone and hope to get lucky, or would it be better to go as a group, where each miner has a better chance of unearthing some gold, because they can dig in more than one place? The latter is the best option. The same is true of these cloud mining companies. If you really want to make money mining Bitcoin, the odds are better with one.
With that said, many people still get lucky enough to have mined a Bitcoin on their own. It all depends on the strength of your computer and your overall timing.