How to mine Bitcoins?
Recently there has been so much talk about this new form of transaction called Bitcoins. For many, Bit coins are a mystery whose mode of operation can only be understood by a few smart people with extreme knowledge in programming. How are bitcoins mined? Bitcoin mining is not as complex as it sounds and can be done by whoever is interested in doing it.
What is Bit Coins?
First things first, what exactly are Bitcoins? Well Bitcoins are essentially cash that can be used to purchase goods and services. However in many cases they cannot be directly exchanged for goods but are exchanged for other currency like pounds and the dollar. Currently 1 bitcoin is $373.98 and £259.38 pounds. It is virtually the strongest currency out there. However it must be known that there is no Central Bank for Bitcoins, thus it cannot be regulated by any authority. Bitcoins are regulated by algorithms made by a Satoshi Nakamoto from Japan. This name is just a pseudonym and is common in Japan. The actual name of the inventor of Bitcoins is a mystery.
Ways of mining Bitcoin
So what exactly does it mean when people say that they are “mining” bitcoins? Well first it must be known that Satoshi made a finite limit of 21 million bitcoins that will ever exist. Currently there are 12 million in circulation meaning that 9 million are yet to be “mined”. The algorithms regulating the discovery of bitcoins made it so that it was easy for one to find bitcoins at first but harder to mine later. So now we can ask ourselves, how is bitcoin mined?
Mining bitcoins has proved to be somewhat of a challenge for even the best minds on the planet. In reality it all comes down to the hours you put in and the computer power you use in this process. However with the right tools and attitude to the task it can be done.
Requirements for Bitcoin Mining
How are bitcoins mined? Well you first need a “Bitcoin Wallet”, this is exactly what it sounds like. It is a place where you can put your bitcoins. To get one you can simply go to www.bitcoin.org and download it and then install it. The installation will take some time and some 6GB of space on your PC but once you are done then you are good to go.
The next thing you have to do is to join a pool. A pool is a group of people with computers who combine their computing power to crunch the numbers faster so as to expedite the process of mining. This is very important as you cannot do it alone, Bitcoins are extremely hard to find and require a lot of calculations to be done. What you are looking for is block chains which are 50 bitcoins at time. Looking for such blocks is like searching for the right key among a million other keys. You have to keep trying until you get the right key to open that particular padlock, after which another padlock will come.
To start mining you will also need mining software. The most popular is called GUI miner, this programme when launched will mine on its own until it finds the “key”. You can also use special hardware designed for this very task, these are called application specific integrated circuits (ASIC) which will expedite the process. Bitcoin mining is long process that can even take a lot of months, however it has proved to be very lucrative for those patient enough to try.