Mining bitcoins is done by solving mathematical puzzles, it isnt necessary to understand the details of those to mine them and most of us dont anyway, after all its our computer solving them, not us. Whoever solves the puzzle first gets the block of coins (currently 25 per block), but so much work is needed to be done that you have no chance of being first on a home PC or even a medium sized ASIC so most people mine as a group effort in a mining pool. The pool sends out shares to all the miners, and then its a case of whether that pool solves the block first or another, the winning pool gets the coins and shares them between the miners according to who did how much work. Originally bitcoin mining was done on PC processors, then it was worked out how to use a graphics card for the job, with a good card thats a lot faster. That was okay until ASICs were developed to do the job even faster, meaning that graphics cards cant compete any more, mining bitcoin with a processor or graphics card now costs more in electricity than it earns, plus you have to have bought that hardware. (ASIC - Application Specific Integrated Circuit - basically chips made specially for the job of mining and thats all they do). The Bitcoin blockchain adjusts the mining difficulty so that a block of coins is found every ten minutes, this means that as everyone starts using faster ways to mine it becomes more difficult. What this means now is that to mine any significant amount you need to spend thousands on mining equipment, some people are spending hundreds of thousands or more. What this means is that if you want to mine bitcoin with your computer then its going to be a loss making waste of time, youd be better off just spending the electricity money on buying the coins directly. However, theres other coins based on a different algorithm called Scrypt, bitcoin uses SHA256. Currently there are no ASICs for scrypt, but they are under development. This means that right now you can still make a little money with a home computer with a powerful graphics card or two by mining the scrypt coins, which you can exchange for bitcoin if you like on a market such as Cryptsy: https://cryptsy/ Your hashrate is the speed at which your hardware is mining, the faster the better. Heres a chart to see how fast youll mine with SHA256 with your hardware: https://en.bitcoin.it/wiki/Mining_hardwa... And a hardware comparison chart for mining Scrypt: https://litecoin.info/Mining_hardware_co... Take the speed of your hardware for those two and put it into this comparison website to see how much your computer will earn you: coinwarz/cryptocurrency Your hashrate for SHA256 will be about 1000x that for Scrypt but youll still earn more with scrypt mining. Pools: If you dont want to keep looking to see which is the best currency to mine at a particular time then you can mine at Multipool to mine the best from a range at that time, or Middlecoin which pays you in Bitcoin when they sell the coins everyones mined. Alternatively you might want to choose a pool which just deals with the coin youve chosen to mine. To give you an idea how much you might earn, heres a link to the Coinwarz comparison page with the boxes filled out for my setup, which is an HD5870 running Reaper (miner software) and a GTX580 running Cudaminer: coinwarz/cryptocurrency/?... As youll see, its not a lot. Another alternative is to just buy some coins and speculate on the market with them like a Wall Street trader does, but thats obviously risky. If you decide to do that then only speculate with a tiny amount until youre sure of yourself, just keep the rest of what you have safe and dont touch it (buy and hold) One more thing, from experience Id strongly suggest that if you decide to buy an ASIC machine then do not buy it from Butterfly Labs, youll wait so long for it that itll never pay for itself because the difficulty keeps rising, they mess people about, make excuses and refuse to refund anyone. For example they promised that their last lot of miners would be ready in about 2 months but made people wait for over a year and a half, even then a lot of their products just blew up when people plugged them in because they supplied cheap Chinese power supplies. That company probably has the world record number of angry customers. Other companies such as KnC Miner have much better reputations, not that Ive dealt with them myself. Apparently all their last generation of ASICs were delivered on schedule or even ahead of it. Try googling butterfly labs scam and youll find plenty of things to back up what I say. Actually, heres a link to that search to save you the trouble: https://google.co.uk/search?q=butter...
Posted on: Mon, 17 Nov 2014 06:18:44 +0000
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