Cryptocurrency, as a class of money, has appeared quite recently. In 2009, Japanese programmer Satoshi Nakamoto and a group of like-minded people proposed a way to generate unique elements based on the principle of blockchain and cryptography. Blockchain implies a chain of transactions, in which each link contains information about all previous blocks and the entire chain. These elements were called bitcoins (digital coins). The cryptocode, open to everyone, showed everyone the way to mine bitcoins (bitcoin) by executing a mathematical algorithm using a computer and a powerful video card.
What is bitcoin mining
To understand how to create a bitcoin, imagine a certain set of symbols (cryptocurrency code), for which you need to choose the same length, but completely different from it. The very process of creating, extracting bitcoins is called mining. Each bitcoin is a chain of blocks containing information about each previously issued block. For the convenience of using cryptocurrencies, wallets have been created that store bitcoin identifiers. Bitcoin mining requires the installation of modern computer equipment and special programs.
Is bitcoin mining profitable in 2019
The maximum Bitcoin issuance limit is 21 million coins. By mid-2017, just over 13 million had been mined. According to calculations, the limit will be reached by 2040. Computational complexity is growing, and with it, mining costs are rising. The profitability of bitcoin mining is determined by the amount of investments that the miner is willing to bear. The profitability of production is influenced by a large number of factors from the cost of equipment to the cost of energy costs. It is worth taking into account the growth in demand for the use of cryptocurrencies.
Changes in mining conditions and reward level
The creators of bitcoin laid down a method of limiting the emission by gradually reducing the reward for creating new blocks. The step of such a change is the number of bitcoins 210,000 coins. After the production of this amount of bitcoins, the reward for new transactions carried out is reduced by half. When mining the first 210,000 coins, the reward was 50 BTC per 1 block. Since 2013, there has been a transition to the next stage, in which a new block is created for 25 bitcoins. Now the miner will receive a reward of 12.5 bitcoins for each block.
Cryptocurrency rates for today July 25, 2017
| Name | Capitalization | Change over 12 hours and 7 days |
|
| $ 42,540,484,835 | 5.89% ($162) 12h |
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| ETH | $ 19,409,871,923 | 7.25% ($16.2) 12h |
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| LTC | $ 2,213,599,789 | 5.54% ($2.49) 12h |
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| $ 1,446,791,985 | 6.74% ($14.0) 12h |
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| $ 6,172,364,421 | 7.26% 12 hours |
||
| DGB | $ 127,572,361 | 16.65% 12 hours |
|
| bts | $ 353,606,673 | 18.49% ($0.03) 12h |
How to mine bitcoins
Bitcoin mining, block generation is a complex operation. Building and verifying the originality of the block chain takes a lot of time and requires high-speed computer technology. To solve this problem, it is possible to use the power of a simple home computer, create a farm for the mining process, or connect to cloud mining services. Find out how to mine bitcoins in cloud services is possible on Internet sites. Different methods of mining digital currencies use special programs.
Solo mining
Any miner, having built his own farm, has the ability to mine bitcoins alone. The essence of mining on the CPU is to find a new hash, or key, of a new block. The miner who solves this problem receives a reward of 12.5 BTC. But to profit from alone, you need to make a huge number of comparison operations, you need large computing power of the equipment. With a low probability of finding this hash, the effort expended in mining bitcoin may not be profitable.
Creation of a mining farm
To create a cryptocurrency generation farm, standard computer equipment is used, including a powerful power supply, a motherboard, and modules connected to it. According to the types of these modules, farms are divided into three types:
- Using GPUs, in other words, video cards, to create a farm is called GPU mining. AMD video cards are optimal in terms of price and performance. In the early stages of mining, these cards were widely used, but as the complexity of mining increased, problems with their power consumption and cooling arose. The prospects for their use are low. The advantage is the ability to sell equipment.
- The use of programmable logic arrays for this purpose led to the creation of the next stage - FPGA mining. Their performance is comparable to the GPU, but they consume less power and do not require cooling. These farms are widely used because they provide the opportunity to generate different cryptocurrencies.
- An alternative way to farm bitcoins are special ASIC processors (ASIC) for calculating a bitcoin block. ASIC mining performance is 20-30 times higher than FPGA farms, but the cost is very high. This has led to the need to create miner collectives, or pools, to pool the financial resources of a large number of miners in order to create or rent farms on ASIC devices.
cloud mining
Cryptocurrency mining is possible using cloud services. Cloud mining is the rental of mining capacities from real owners of large farms through an intermediary. For this purpose, a home computer, laptop is suitable. After registering for a service in the cloud, carefully study how to generate bitcoins. After the deposit, the client receives his part of the power, which is measured in hashes per second. After the pool receives income, each of them receives its share, depending on its contribution to the result. The client withdraws income through an exchanger or a cryptocurrency exchange.
How to earn bitcoins with a computer
Anyone has the opportunity to deal with the question of how to mine bitcoins correctly. For everyone who is going to make money on investments, it is important to maintain a positive balance between the funds spent, efforts, electricity, time and the result obtained. At the initial stage, bitcoin mining using home PCs was profitable. Now the complexity of sorting through the entire number of options provides an opportunity to earn money on the user's computer only with the help of cloud services.
Mining on the video card
With all the difficulties, individual mining of cryptocurrencies and bitcoin with the help of farms brings income. Profitability for the first half of 2017 was given to mining using a video card by a clear upward trend in the cost of bitcoin coins, which pulled up the prices of most forks. Bitcoin mining on a video card has led to a shortage of relatively inexpensive air- and water-cooled cards. The most popular are AMD Nvidia cards.
With dedicated processors
Video cards are more suitable for generating cryptocoins, but processors of high performance are also suitable. The best processor for mining in terms of price and performance is the Intel Core i7 58020K Hexa-Core at 3.3 GHz with a speed of 202 hashes / second. For mining on a processor, the most important thing is the optimal ratio of its frequency of operation and price. The frequency of each processor will determine the power of your entire farm, and its price will affect the efficiency and payback of the entire process.
How to start mining
To start earning cryptocurrencies using special equipment, you need to create a farm. The most popular Avalon6 and AntMiner S7 miners cost about $600 and can bring a net profit of 0.1 to 0.2 BTC. To get started you need:
- buy a ready-made module, or build a farm yourself;
- download and install a special program - a miner;
- register in the pool of miners, indicating your capacity;
- get part of the task and get to work.
Pool selection
For optimal operation of BTC mining, a rational combination of its requirements and conditions with the capacity of your equipment is necessary. Power depends on the performance of the graphics card. The pool needs the power resources of your hardware. Take into account the proportional distribution of the income of the pool, which will pay out your income corresponding to the contribution of your equipment to the overall process. Internet pool sites contain income vs performance tables. The largest pool of the Bitcoin network is Antpool, which is owned by Bitmain.
Installing and running a bitcoin mining program
One of the main programs for mining cryptocurrencies is CGMiner. It does not have its own shell. Works from the command line, so it is recommended for experienced programmers. GUIminer has a good graphical shell - when using it, the client works both in solo mode and when entering the pool address. During installation, it determines the equipment parameters itself, saves the settings in a profile file. To work in the bitcoin system, you need to create a wallet address.
Creating a bitcoin wallet
To store cryptocurrencies, appropriate wallets are used, which are downloadable applications, the choice of which depends on your computer system and the type of crypt. You need to download a wallet to a computer or smartphone, come up with a login to enter. The password in many wallets is generated automatically in the form of a crypto key. After activating the wallet, do not forget to save the main identifier, which is the address of the wallet, for settlement purposes. To sell bitcoin, use exchange offices or crypto exchanges with higher exchange rates.
Where to mine bitcoins
Cloud mining is a good starting platform for a novice cryptocurrency businessman. Having invested a small starting capital, it is possible to start mining bitcoins, to study this issue. As for any money business, a lot of scammers have appeared in the cloud service, hiding HYIP projects under the guise of a cloud service. Below is a rating of cloud mining services that have good network capacity and pay fees to their members:
- hashflare. Start of work - June 2015. Minimum input / output 1.2 USD / 0.00085 BTC. Mines, in addition to bitcoin, several cryptocurrencies.
- Hashing24. Start of work - June 2015. Minimum input / output 19.95 USD / 0.001 BTC. Power is provided by BitFury. Deposit-withdrawal of funds is carried out by Visa/Mastercard bank cards.
- Genesis Mining. Start of work - February 2014. Minimum input / output 30 USD / 0.0001 BTC. For the purposes of cloud mining, bitcoin is rented out power for the SHA-256, X11, Dagger-Hashimoto algorithms. The advantage is the excess of payments over costs. Entrance and withdrawal is possible by bank cards, transfers.
- hash nest. Start of work - July 2014. Minimum input / output 0.001 BTC / 0.001 BTC. Good statistics of ASIC S9 cards used by this service.
- Eobot. Start of work - June 2017. The minimum input/output is unlimited. On this service, various cryptocurrencies are mined, there is a faucet for the opportunity to get cryptocurrency for free.
How to calculate mining profitability
To determine the efficiency of cryptocurrency mining, use mining profitability calculators located on cloud mining sites. The input data into the calculator is the complexity indicator, the cost of the block, the cost of electricity, the power of the equipment, and others. The result of the calculations is the value of profit from production for a certain period of time.
The cost of equipment for bitcoin mining
Equipment for the production of bitcoins differs in its performance and price. The power consumption has the most significant impact on the efficiency of production. Several miners, their cost, mining power, consumed electricity, approximate monthly income, payback period are presented in the table:
| Name of the miner | Power,Gh/s | Consumption, kWh | Income, USD/month | Payback period, months |
|
| Bitmain AntMiner S 9 | |||||
| Spondoolies-Tech SP 500 |
Energy and equipment cooling costs
As can be seen from the table above, the cost of electricity affects the efficiency of production. The bulk of the electricity consumed is used to cool the chips. The farm works around the clock, so you need to seriously take care of the ventilation of the room, air conditioning and cooling of the microcircuits. In addition to traditional ventilation, water cooling is used to solve this problem, by analogy with cooling a car engine.
Growth in the number of miners
Now we are experiencing a boom in the growth of the number of miners. Cheap video cards for mining disappeared from sales not only in the CIS countries, but also in Europe. The complexity of bitcoin mining and the increasing hardware requirements for it are forcing many miners to switch to other cryptocurrencies. The only positive factor supporting interest in bitcoin mining is the stable growth of the bitcoin price in the cryptocurrency market. With a price decrease or correction, the number of people willing to mine bitcoin decreases.
Bitcoin Mining Calculator
To calculate mining efficiency, thematic sites contain automatic mining calculators. They can be used by all people who are engaged in the extraction of any cryptocurrencies. The initial data for the calculation are the coefficients of the difficulty of mining crypto-currencies, the speed of mining, the characteristics of the miner, the pool, and others. After entering all the required data, as a result, an indicator of the income of the entire mining process is obtained.
Risks and Difficulties of Cryptocurrency Generation
With the increasing complexity of mining crypto coins, the main criterion for efficiency is the ability to invest a large amount of money to buy expensive, but high-speed equipment. It becomes harder to profit from the process. The main risks and difficulties of mining, which must be taken into account by everyone involved in mining when drawing up a business plan, remain:
- lowering the price at which the generation of new blocks is rewarded;
- an increase in the cost of equipment due to an increase in its productivity and an increase in demand;
- the cost of electricity, the limits of its use for specific premises;
- the likelihood of a fall in the bitcoin rate, as often happened with financial bubbles.