By mining Bitcoins, you can obtain units of the virtual Bitcoin currency. However, you should not expect more than a hobby: to really earn money with it, a lot of capital and time is needed. Nevertheless, we explain how it works.
Bitcoins mining: powerful hardware needed
Hardware is one of the main arguments against mining as a source of income. To really make money, you need all sorts of equipment – you’re competing with companies that specialise in it and do bitcoin mining in large warehouses. Mining itself depends on a few factors. You need to take into account various aspects such as your electricity costs, the cost of the relevant hardware and other variables:
- The more Bitcoin miners there are in a network, the harder it is to generate Bitcoins.
- Bitcoin mining consumes a lot of electricity. If the cost of electricity is high, mining is often not worthwhile.
- In order to mine bitcoin, you need to join a mining pool, which incurs additional costs.
- For mining you need the appropriate hardware – a so-called ASIC miner. Your desktop PC is usually not sufficient for this, as the electricity costs would be far too high to be able to mine efficiently.
- An ASIC miner of this kind costs between 1,000 and 3,000 euros.
- When buying, be sure to look at the “hash rate” of the device. This indicates how many hashes can be created per second.
- Of course, you should also pay attention to the efficiency of your ASIC miner: If the device consumes too much power, you may be making a losing trade.
- In addition, you need a so-called Bitcoin wallet where you can store your Bitcoins.
Register for Bitcoin mining with mining pool provider
Bitcoins mining is organised via so-called mining pools, in which users jointly share their computing power. When a Bitcoin block is generated, each user receives their fair share. To become a member of a mining pool, you have to create an account there. We list two well-known mining pool providers here:
- You will find probably the largest mining pool with Slush’s Pool. In addition to the selection of different payment methods, you can rely on documented support with instructions and explanations here.
- IQMining is also a popular mining pool where you can cash out not only in Bitcoins but also other cryptocurrencies.
- Note: In addition to the appropriate hardware and a mining pool, you need suitable software for mining. These are, for example, the free command line programmes CGminer and BFGminer.
- Note: In addition to the appropriate hardware and a mining pool, you need suitable software for mining.
- If you prefer a graphical interface, EasyMiner and GUIMiner are suitable. Finally, you need to set up your Bitcoin wallet via a mining client. You can read more about this in the following chapter.
Set up a mining client
The mining pool account alone is not sufficient to successfully participate in Bitcoins mining. For this, you usually need a mining client. You log in to this with your previously created mining pool account. Among other things, the mining client saves your Bitcoins in a Bitcoin wallet.
- Bitcoin-Qt is an open source project and currently one of the most secure representatives among the mining clients. Here you don’t have to worry about possible attacks on your virtual money.
- Electrum is also open-source and trustworthy. The tool scores with 2-factor authentication, support for add-ons and the ability to export your keys to other Bitcoin clients at any time.
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More experienced users can check out Armory, which even lets you manage multiple wallets on one computer.
