Bitcoins! Where do they come from? How are they minted or printed? They are decentralized, so who produces them? If you are a fresher and heard the term “bitcoin” or “cryptocurrency”, you might have several questions popping in your mind. Till now you must be digesting the fact that crypto is a digital currency not backed by any institution of central government or decentralized nature. Someone might have told you that bitcoin works like currency but produced like gold (Not literally!!). So let us start responding to questions related to bitcoin production from what is mining to everything about that, clearing the doubt-Is bitcoin mining free?
What Is Bitcoin Mining?
Let us consider that Simi purchases a watch from Sid with a bitcoin. To confirm the genuineness of bitcoin, miners initiate to verify the transaction. To establish the deal, many individuals or institutions rigorously work on their high tech computers to solve the mathematical algorithm and verify it, adding a virtual block of verified bitcoin transactions in the already ongoing chain (Blockchain). Also, people who solved the algorithm, are rewarded by bitcoins (depending on certain factors). It is known that in every ten minutes, a transaction is verified and a block is added to the chain.
Mining is the lingo for actually verifying or discovering the new bitcoins just like finding the gold. (Rate of bitcoin discovery is almost similar to the rate at which gold is mined, hence called mining). Thus, bitcoin mining is the process of addition of transactional records to the public ledger of past transactions of Bitcoin (blockchain). Blockchain plays the role of disseminating the news that a transaction is being verified to the remaining network (accessible to every user). So what is bitcoin mining? It is merely the verification of bitcoin transactions.
Is Bitcoin Mining Free?
Your friend may suggest to you that to gain the profits from bitcoin; you need to buy and trade on crypto exchanges. But after reading a few of the articles, you might be wondering why shouldn’t I try my hand into mining? If you have coding skills, you might be one step further and trying to explore the answer to- Is bitcoin mining free ? Alas! It is not free and requires high tech resources to mine the bitcoins.
It is not entirely free (even the air you breathe, is not completely free!) but can be tried on a minimal budget. Bitcoin mining can be started with specialized hardware and open-source software( free to download and run). But, you have to bear a high cost of power consumption. It sounds cumbersome and needs a lot of courage to earn the bitcoins. There is another way for budgeted mining, i.e., joining the mining pool and pooling your computer power together for the mining process. Websites like Slush’s Pool can facilitate introducing you to mining pools. Thus, earning the coins from mining might sound a bit difficult but can be profitable if not free. Let us try to find out in the next section.
Is Bitcoin Mining Profitable?
How do miners earn coins? Miners use the combination of upgraded hardware and high tech software installed in it to solve the complex problem, and once the transaction gets verified or maths algorithm gets settled, they are rewarded with bitcoins. As several miners are involved in verifying a transaction, the reward gets distributed, and profitability depends on your share of contribution.
But is bitcoin mining profitable to all or some or none? It depends on some factors like electricity costs, upgraded mining hardware and knowledge of bitcoin mining (only enthusiasm cannot work!). If you are in a country like China or Japan or any advanced country, you might have to spend less on the revived ASIC mining hardware (country manufactures on their own). If you are living in any cold region like North Carolina or utilizing the renewable energy farms (wind, hydro etc.), mining could be profitable for you due to the cheap electricity costs (Mining requires high power consumption!). And if you are dedicatedly into the crypto space and planning for years to start mining, you may be hired by big mining firms, or you can start on your own. Thus, mining is a flourishing industry in the present times of staggering economy and can be profitable( Is Bitcoin mining free? No!!) if you have an edge on some or one of the significant factors involved in the process. You can also calculate the mining profitability by calculators like BTC mining profit calculator, the Genesis Block etc. by inputting some values of parameters against the present bitcoin price.
Bitcoin Mining Hardware
Initially, mining was performed on the CPUs of computers which slowly got dominated by graphic card systems then field-programmable gate arrays and now application-specific integrated circuits (ASICs) to upgrade the hash rate and reduce the power consumption.
Hash rate means a number of calculations that hardware can perform in a second so high hash rate means increased chances for finding the solutions of complex algorithms.
More upgraded hardware means more power consumption for mining plus the electricity utilized in running the system. Therefore, the hash rate and power consumption are two significant factors to be considered for bitcoin mining hardware.
Presently, the mining hardware means Application-Specific Integrated Circuits (ASICs) or microchips which are designed for mining only, offering high hash power and reducing the costs of electricity consumed. Some of the best hardware available for bitcoin mining are BitMain AntMiner S5, S7 and S9, Antminer T9, AvalonMiner 741 etc., have the dedicated ASICs to increase the rate of solving the algorithms, devoted primarily to mining only. So I hope you are getting the answer for-Is bitcoin mining free? You need to purchase the microchips, which are certainly not free.
Bitcoin Mining Software
After exploring the latest mining hardware, it is evident that you need to learn about bitcoin mining software too. Mining software keeps an eye on the input and output of miner along with displaying statistics related to mining activity like speed and hash rate of a miner and also the temperature and power consumption by your system hardware.
Based on the kind of hardware you have, you will need to install the compatible software accordingly. Newly upgraded ASICs are pre-configured, but with most of the microchips, you need to install the software.
Some of the popular and trusted bitcoin mining software available in the market are:
- Hashr8: Miners make this software and for the miners to combat the inabilities of mining systems. With its mobile application, you can control the mining system from anywhere.
- CGMiner: It is based on the original code of CPU miner, thereby prevalent in the mining industry. Automatic speed control of fans, capabilities of the remote interface, ability to detect blocks with mini databases etc. are the features that lure the miners to purchase this software.
- Bitcoin Miner: BTC miner is an open-source software which has a user-friendly interface. It has features like quick share submission, maintains profit reports and is also compatible with mining support tools.
Some other software like BFGMiner, Easy Miner, RPCMiner etc. are available in the market and can be chosen as per your needs and requirements of hardware.
Is Bitcoin Mining Worth It?
Till now you got the answer for Is bitcoin mining free? But do you think bitcoin mining is worth it? Sometimes buying the coins from the exchange can be more profitable instead of mining them. But still, you want to try the mining of crypto coins; you can start with altcoins like ETH, Moner or Zcash (as they involve less competition!). Mining is indeed a necessary process to maintain the survival of bitcoins, but it is not everybody’s cup of tea.
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