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Bitcoin Mining Basics

ImageWhat is Bitcoin Mining?

Bitcoin mining is simply the work of running the Bitcoin network. This is not carried out by one central computer or bank. But by users like you and me through to big server farms that rent out hashing space (don’t worry we’ll get to it). So basically lots of computers round the world, from one small machine up to a whole farm are processing transactions and generating bitcoin as a reward for doing this. You will notice when you send transactions you can put a transaction fee, this can be tiny to larger if you want to be processed faster. However all the transactions I’ve done are pretty fast.

Why mine Bitcoins?

To make more bitcoins and for me it’s part of the fascination of the whole thing. As a computer programmer the whole process of running an international currency and being part of the vision is brilliant.

How to get started? 

Ok – if you are technically minded you can mine bitcoins on your own computer but you will really need ASIC chips such as Antminer, these are normally connected to a USB port on your machine or you can have a bank of them but these little USB computers can get very hot, to add to this you must understand that mining for bitcoins this way might not be profitable if your electricity costs are too high. So I would start by renting hashing space from a server online. The hardware work is done and you can easily get started. So for this reason I will do a separate blog post on how to set this stuff up with screen shots!.

Note that you will have to pay for hashing with bitcoins from these farms to make money, although they offer free options, in reality there’s no such thing as a free lunch, get started free but expect to invest in your future!

Basically I use two Mining platforms online.

Splititminiig and Genesis Mining

Be careful, there are many sites that are simply Ponzi schemes and not real mining at all.

 

2 Comments

  1. Phil Phil April 3, 2017

    OK so i buy a bitcoin, or a bit of a bitcoin given that they are ove $ 1000 at the moment. I invest in mining and sit back and watch the investment mount. Sounds good so far and I have found a lot of anecdotal evidence that it can be profitable.

    Reading the info at Split Mining, i cannot see how to get my money out. Is this what they refer to as selling your mining contract? Or is their a mechanism for withdrawing all or part of your investment.?

    I’d like to have a go at this, but i want to be sure I have a reasonable grasp of the mechanism.

    I have been trading gold in a small way for several years, but that it is based purely on the rise and fall of the market. The storage costs and fees eat into the profits and it needs constant monitoring. However I have still achieved 10% over a year.

  2. admin admin Post author | April 3, 2017

    Hi Phil – Bitcoins are divisible up to 8 decimal places…. so you can buy FRACTIONS of bitcoins. Start small and get used to the technology.

    Within split mining you just hit the WITHDRAW button and then transfer the bitcoins back to your wallet.

    So start small and you can up it as you go on! 🙂

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