How do you mine bitcoins?
At the end of the day, the idea of getting bitcoin as a reward for doing a job may sound appealing, but it’s actually much more complicated than it might seem to someone who has never delved into the subject.
First of all, it must be said that in order to mine bitcoin, one must identify the hashes that validate a block.
Generally it takes 10 minutes for one of these hashes to be discovered, so generally a block is mined every 10 minutes. The miner who manages to find the hash that validates a block is currently being given 6.25 BTC as a prize created specifically for this purpose.
With a BTC price of more than $20,000, 6.25 Crypto Investor corresponds to more than $145,000, so the single miner who manages to validate a block is currently being given away more than $145,000.
The problem arises here. Since bitcoin mining is a competition, in which only the first miner to validate a block is rewarded, such a high reward justifies very high investments in machines able to discover the hash before the others.
These machines, necessary for bitcoin mining, have the precise purpose of discovering the hashes that validate blocks. They do this by randomly generating many billions of hashes per second and examining them one by one to try to understand if among these there is also the one able to validate the block.
These are machines with an absolutely not insignificant cost, and you need a lot of them to have any real probability to mine even just one block.
There are therefore two ways to really mine bitcoin: either you equip yourself with many of these machines, investing a very high amount of money, or you put in common with other owners of these machines sharing any revenue.
In the second case you participate in the so-called pool, or very large groups of users who share the computing power of their machines sharing the revenue in proportion to how much computing power they have shared.
In both cases, however, in addition to the hardware it is also necessary to have a special software, which however differs. In fact, those who mine alone must use a specific software compatible with the Bitcoin protocol, while those who mine in pool must use the software made available to the pool.
Note that, depending on how the machines are configured, they can express more or less computing power, so owning them and running them is not enough: you must also optimize their configuration. This last activity is very difficult for non-experts.
Finally, it must be said that these machines consume large amounts of electricity, and if the cost of the latter is not low, you can easily mine at a loss, or not to collect enough to cover all expenses.
Therefore, although in theory to mine bitcoin it is sufficient to have special machines (usually use the so-called ASICs), configure them at best, and use a special software, in reality it is very difficult to do it with profit.
How to mine Bitcoin with cloud mining
However, there is also a third way. It is the so-called „cloud mining“, the rental of the necessary equipment from a third party.
Although cloud mining may seem like a much easier way to go, it presents two problems.
The first is that, unfortunately, often companies that apparently offer the service of cloud mining in reality are fraudulent: in reality they do not rent anything, but they just take money from users.
Often these realities are recognized because they promise returns, which instead with the real mining are not guaranteed in any way, and because they say they provide the service „turnkey“, or without asking the user nothing but to send the money.
In the case of serious cloud mining companies, not only there is no promise of returns, since mining is a competition in which you can easily lose, but usually require the user to configure the parameters of the service. That is, they leave it up to the user to optimize the configuration of the machines they rent, and this implies that only experienced users are able to use the service profitably, generating more revenue than the cost of the rental.
By now, as it is quite clear from the scenario just described, bitcoin mining is an activity that is only the preserve of true professionals in the field.