Bitcoin mining has become quite a popular and challenging activity that more enthusiasts are joining. Most of those who want to start earning on cryptocurrency opt for mining. Unfortunately, this majority does not know the nuances of mining processes, and then they are quite serious and often unpleasantly surprised by the fact that their final income doesn’t correspond to the brilliant and courageous plans and dreams. But what can you do to be confident in your actions? What affects the cost of bitcoin mining and hosting? Let’s take a closer look at that.
How Does the Mining Process Work?
Mining is about solving a certain mathematical problem where your computer has to guess the hash code first. It is a matter of luck because the machine matches the code at random. So, the user who has the highest hardware capacity will find the most hashes and will be the first in this race for cryptocurrency. In other words, from the analysis of what mining is, we can at once distinguish the first and one of the most important points, which affects the process of mining.
Thus, after a miner or a group of miners has found a new block in the blockchain, they are rewarded for this in the form of a certain amount of cryptocurrency. Let’s say right away that it is much more profitable to work in a team because you combine the power and have all the chances to get the reward.
What Makes Bitcoin Mining So Challenging?
If you started mining bitcoins in 2009, when they first appeared, you would be making thousands of dollars by today. However, over the years, the mathematical complexity of bitcoin mining has grown far beyond what the average user can achieve at home, on personal equipment.
Therefore, you will need to invest significant amounts of money in professional equipment in order to mine effectively. You need to buy server equipment for the mining pool, server boxes, racks, blocks, equip a room for your own bitcoin farm, or even buy a turnkey mining farm. Often the problem is just the hosting of the equipment, because not every place has a number of conditions that are required for mining. In that case, you may ask for help from professionals who are experienced in mining hosting. The team of IT experts knows exactly how and where to place your equipment so that you can safely mine bitcoins.
Factors Affecting the Hosting and Cost of Bitcoin Mining
Now we come to the main issue. Bitcoin mining is the support of an entire infrastructure intended to keep the entire network up and running. The essence of this process is solving complex mathematical problems with the help of special software installed on users’ PCs. The process of obtaining bitcoins is not controlled by the center but is distributed to everyone who wants it. Mining performs several important tasks:
- supporting transactions;
- protection of the network from the addition of invalid information;
- keeping bitcoins safe from various attacks;
- supporting decentralization.
Bitcoin mining is influenced by the choice of fork, pool, software as well as hardware. Now more about each of them.
Choice of Fork
Any fork is a change in the rules by which a block in a blockchain is recognized as authentic. For it to become so, users must vote for the fork by downloading new software.
Each fork can evolve and exist independently of the other. The main criterion for choosing a fork is profitability. And you should also pay attention to liquidity (the ability to transfer virtual money into all kinds of real ones).
You may calculate the profitability on any online mining calculator. This figure depends on your video card and the speed of your PC, as well as the rate on the exchange.
Choosing a Pool
A pool is a server that distributes tasks for subscriptions among all connected participants. Choose a pool by commission – the percentage of the block that is shared between miners. Also, look at the features of the withdrawal of funds to your wallet. Some pools provide additional options for viewing statistics and monitoring workers.
To mine bitcoins, you need to install a cryptocurrency farm or software on your PC. Among the software there are several most suitable and proven options:
- CGminer – popular GPU / FPGA / ASIC microprocessor. The open-source graphics type is suitable for Windows, Linux, Mac OS X. The software itself includes overclocking, monitoring, fan control, and remote interface capability.
- BFGminer – created specifically for FPGA and ASIC, but does not provide a central focus on graphics processes. There are dynamic clocking, monitoring, and remote screen viewer functions.
Hardware for Mining
To mine cryptocurrency that is not influenced by financial markets or regulatory centers, you need to assemble an optimal set of computer hardware. This includes a processor, video cards, and additional equipment.
The video card should have enough memory and GPU frequency to make the mining process run without any complications.
Graphics processors are the most important equipment when working with a cryptosystem. Only powerful modern computers with enough RAM and a proper video card are suitable for mining.
Special purpose integrated circuits (ASIC) or fan arrays (FPGA) and separate USB devices can be bought instead of processors and graphics cards.
This is another aspect that you should consider. You can mine only low-end and new cryptocurrencies on a medium-powered home PC. Bitcoins require at least 4 GB of RAM and 2 GB of video card memory.
There are no requirements to the operating system, you can pick up a suitable version of the software for mining for Windows, Linux.
The main thing is to buy powerful video cards and even more than one or put separate USB devices or ASIC-miners.
Internet Ping and Power
Mining traffic depends on the number of connected devices, their performance, and the complexity of solving mathematical problems. Internet connection must be wired, without failures and interruptions. Therefore, choose your traffic provider carefully.
Bitcoin mining consumes a lot of electricity, so you need to take care to make sure it is uninterrupted. And the best thing to do is to turn to companies that will place your equipment in a cool area with all the fine points of bitcoin mining in mind.
Let’s Get to the Bottom Line
Bitcoin mining is quite an expensive activity. You need to spend more on buying hardware. If you have enough money, feel free to invest in the equipment and choose a place to put it. Creating home farms is not so profitable anymore. Plus, there may be problems with electricity and Internet connection, to say nothing of dissatisfied neighbors.