Beginner’s Guide to Bitcoin Mining
As you may already know, there are two main ways how you can obtain bitcoins: you can either purchase the cryptocurrency from one of the best bitcoin exchanges or mine it using specialized hardware. This article is about the latter method, and its purpose is to introduce bitcoin mining as a potentially very profitable activity and help you embark on your bitcoin mining journey.
Best Bitcoin Mining Hardware
To start mining bitcoin, you need the right equipment. For some time after bitcoin was released in 2009 by an unknown person or group of people under the name Satoshi Nakamoto, it was possible for just about anyone with a decently powerful computer to mine bitcoin using a CPU (Central Processing Unit).
The CPU mining era didn’t last long, and CPU mining was soon replaced by GPU mining (Graphics Processing Units), which relies on the tremendous processing power of modern graphics cards. For a brief period of time, the best bitcoin mining hardware were various top-of-the-line consumer-grade graphics cards, such as the ATI Radeon HD 5870, which is weak by today’s standards but was a beast at the time.
However, today, even the most powerful graphics cards on the market offer only a mediocre hash rate (the primary measure of a bitcoin miner’s performance) compared to ASICs (Application-Specific Integrated Circuits), which are integrated circuits customized for a particular use, such as mining bitcoin and other cryptocurrencies.
So, if you would like to join the ranks of the best bitcoin miners, you have no other option but to purchase an ASIC miner and start mining at a hash rate that equals to the combined hash rate of dozens or even hundreds of graphics cards. Below are three best bitcoin miners that you can buy today.
The Antminer S9 is the world’s first bitcoin mining ASIC based on the 16 nm process node and FinFET technology. As such, it has an advertised mining capacity of 13.5 TH/s and absolutely amazing power efficiency of 0.098 W/Gh. Because the Antminer S9 represents the cutting-edge of bitcoin mining technology, it’s also far from cheap. At around $2,000, the Antminer S9 is a substantial investment, but that’s something that you have to accept if you want to become a bitcoin millionaire.
One of the best bitcoin miners on the market is also the Antminer D3, which has a hash rate of 15 GH/s and consumes 1,200 watts of power. But if your intention is to mine bitcoin, the Antminer D3 isn’t the right ASIC miner for you. Unlike the Antminer S9, the Antminer D3 is designed to mine the X11 hashing algorithm, which was created by Dash core developer Evan Duffield and is currently used by Dash, CannabisCoin, StartCoin, MonetaryUnit, Karmacoin, and XCurrency, among others. Bitcoin uses the SHA-256 mining algorithm, which is also used by Bitcoin Cash, Bytecoin, Terracoin, Unicoin, Snowcoin, Zetacoin, and many other cryptocurrencies.
The Avalon 6 ASIC miner offers very attractive value with its power efficiency of 0.29 W/Gh and 3.5 TH/s advertised mining capacity. You can expect the Avalon 6 to use about 1050 Watts when using a platinum-rated PSU, and it’s quiet enough to run at home. Just keep in mind that you’ll need either a Raspberry Pi or a TP-Link TL-WR703N nano router to act as a controller for the Avalon 6.
Best Bitcoin Mining Software
Your newly acquired bitcoin mining hardware won’t be of much use to you unless you familiarize yourself with the best bitcoin mining software. Below are three popular bitcoin mining software applications that you can use to control your bitcoin mining hardware, monitor its performance, and enjoy a plethora of various other useful features that make bitcoin mining more convenient.
Designed with ASICs in mind, BFGminer has been around for a long time, gradually emerging as the best bitcoin mining software available. BFGminer’s source code is publicly available, and pre-compiled binaries are available for Windows and several popular Linux distributions, including Arch, Ubuntu, and Debian.
Some of the most noteworthy features of BFGminer include intelligent overclocking, vector support, remote interface capabilities, and fan control. BFGminer is one of the most actively developed bitcoin mining software applications out there, so you can be sure that all bugs are always addressed in a timely manner.
CGminer is a versatile bitcoin mining software with ASIC mining support. It’s available for all major operating systems, and it has just about every feature you could possibly want. The latest version of CGminer only supports ASIC and FPGA (Field-Programmable Gate Array) mining, while all versions of CGminer prior to version 3.8.0, which was released in November 2013, also supported GPU mining. To use your bitcoin mining hardware to its maximum capacity, you must use the latest version of CGminer, which you can find on the official GitHub page.
If there’s one thing that you may not like about BFGminer and CGminerl, it’s the fact that both of these bitcoin mining software applications don’t have a graphical user interface. The good news is that there’s one excellent bitcoin mining software that does have a graphical user interface, and its name is MultiMiner.
MultiMiner is a multi-platform mining and monitoring software that greatly simplifies the monitoring of complex cryptocurrency mining rigs. It requires very little configuration because it can automatically detect mining devices on the network, including those from Antminer and Avalon. Power users can use MultiMiner to set up strategies for automatic cryptocurrency mining and integrate MultiMiner with other services.
Best Bitcoin Mining Pool
Because of how bitcoin mining works and how much competition there is, it’s virtually impossible for an individual to make profit when mining alone. What most bitcoin miners do instead is join one of the best bitcoin mining pools. A mining pool is essentially a large group of bitcoin miners who have agreed to pool their mining resources together and split the reward equally.
Antpool is a mining pool run by Bitmain technologies Limited, a Chinese IC design company that specializes in research, development and sales for custom mining chips and miners. Antpool supports the mining of Bitcoin, Litecoin, and Ethereum, and it offers excellent security and convenient mining management. With its total bitcoin hashing power of 3642.40 PH/s, it’s the second largest bitcoin mining pool, right after BTC.com.
BTC.com is the largest bitcoin mining pool by total hashing power. It was founded in 2014 as Blocktrain by Boaz Bechar, Ruben de Vries, and Jop Hartog and acquired a year later by Bitmain technologies Limited. BTC.com gives its users complete control of their private keys and helps them keep their funds secure with two-factor authentication and frequent database updates.
First announced in 2010 as Bitcoin Pooled Mining Server, Slush is the first publicly available mining pool in the world. Its servers are located in Asia, Europe, and in the United States. Slush is highly trusted and in active development. It boasts an excellent uptime of 99.9 percent and has a unique voting system that keeps it politically neutral, which is a rarity in today’s highly politicized world of cryptocurrencies.
Best Bitcoin Wallets
After you mine your first few dollars’ worth of bitcoin, you should create a private bitcoin wallet to securely store your newly acquired cryptocurrency funds. It’s not easy to select the best bitcoin wallets because there are so many of them, but here are out three favorite ones.
Exodus is a highly polished cryptocurrency wallet with a beautiful user interface, stunning live charts, and outstanding security. The moment you start Exodus, you will immediately understand what difference it makes when designers and programmers collaborate to create an application that’s not only functional but also usable and nice to look at. Exodus is available for Windows, Mac, and Linux.
The Ledger Nano S is the most popular cryptocurrency hardware wallet on the market. A hardware wallet allows you to store your bitcoins on a physical device that plugs to any computer via USB and has robust safety features for storing cryptographic assets and securing digital payments. Hardware wallets such as the Ledger Nano S offer excellent protection against ransomware and other types of malware, and they even resist physical theft with a PIN code and a recovery sheet.
Electrum has been securing bitcoins since 2011, and this popular wallet, which is widely recognized as one of the best bitcoin wallets, has only gotten better over the years. Electrum is decentralized, which means that it’s never down, which is a huge issue with web-based bitcoin wallets. It gives you total control over your private keys, making it possible to use them in other bitcoin wallets. Electrum also supports multisig transactions, and it can be extended with third-party plugins. Electrum is available for Windows, Linux, Mac, and Android.