How To Start Mining

How To Start Mining

1) With cloud Mining 

If you want to invest in bitcoin mining without the hassle of managing your own hardware, there is an alternative. You can use the cloud to earn your coins.
Put very simply, cloud mining means using (generally) shared processing power run from remote data centres. One only needs a home computer for communications, optional local bitcoin wallets and so on.
However, there are certain risks associated with cloud mining that investors need to understand prior to purchase.

Pros
Here’s why you might want to consider cloud mining:
A quiet, cooler home – no constantly humming fans
No added electricity costs
No equipment to sell when mining ceases to be profitable
No ventilation problems with hot equipment
Reduced chance of being let down by mining equipment suppliers.

Cons
Here’s why you might not want to consider cloud mining:
Risk of fraud
Opaque mining operations
Less fun (if you’re a geek who likes system building!)
Lower profits – the operators have to cover their costs after all
Contractual warnings that mining operations may cease depending on the price of bitcoin
Lack of control and flexibility.

Types of cloud mining

In general, there are three forms of remote mining available at the moment:

i) Hosted mining
Lease a mining machine that is hosted by the provider.

ii) Virtual hosted mining
Create a (general purpose) virtual private server and install your own mining software.
  • Amazon Free VPS
  • Google Free VPS
  • cloudsigma.com
iii) Leased hashing power
Lease an amount of hashing power, without having a dedicated physical or virtual computer. (This is, by far, the most popular method of cloud mining.)

2) With your CPU / Graphics card or mining hardware

i) ASICs mining hardware

This is where the action’s really at. Application Specific Integrated Circuits (ASICs) are specifically designed to do just one thing: mine bitcoins at mind-crushing speeds, with relatively low power consumption. Because these chips have to be designed specifically for that task and then fabricated, they are expensive and time-consuming to produce - but the speeds are stunning. At the time of writing, units are selling with speeds anywhere from 5-500 Gigahashes/sec (although actually getting some of them to them to ship has been a problem). Vendors are already promising ASIC devices with far more power, stretching up into the 2 Terahashes/sec range.


ii) CPU / Graphics hardware

 The least powerful category of bitcoin mining hardware is your computer itself. Theoretically, you could use your computer's CPU to mine for bitcoins, but in practice, this is so slow by today's standards that there isn't any point.
You can enhance your bitcoin hash rate by adding graphics hardware to your desktop computer. Graphics cards feature graphical processing units (GPUs). These are designed for heavy mathematical lifting so they can calculate all the complex polygons needed in high-end video games. This makes them particularly good at the SHA hashing mathematics necessary to solve transaction blocks.
You can buy GPUs from two main vendors: ATI and Nvidia. High-end cards can cost hundreds of dollars, but also give you a significant advantage over CPU hashing. For example, an ATI 5970 graphics card can give you over 800 MH/sec compared with a CPU, which will generally give you less than 10 MH/sec.
One of the nice things about GPUs is that they also leave your options open. Unlike other options discussed later, these units can be used with cryptocurrencies other than bitcoin. Litecoin, for example, uses a different proof of work algorithm to bitcoin, called Scrypt. This has been optimized to be friendly to CPUs and GPUs, making them a good option for GPU miners who want to switch between different currencies.

GPU mining is largely dead these days. Bitcoin mining difficulty has accelerated so much with the release of ASIC mining power that graphics cards can't compete. If you do want to use them, you'd best equip yourself with a motherboard that can take multiple boards, to save on running separate PSUs for different boards.



Download the mining software

Best Bitcoin Mining Software Mac OSX
ASIC Bitcoin Mining Software

  • CGMINER - This is a multi-threaded multi-pool GPU, FPGA and ASIC miner with ATI GPU monitoring, (over)clocking and fanspeed support for bitcoin and derivative coins.
  • BFGMiner - Modular FPGA/GPU/ASIC miner in C

Join a Mining Pool



it’s time to choose a pool, pools are organized groups of people working together on the same blocks, it’s possible for you to mine alone but it’s not recommended. There are many different pools there and they each have their pros and cons.


Based on payment method the most common ones are PPS and PPLNS pools.
Pay-per-Share – Each share has a fixed value each block no matter if the block successful or not, this method is recommended for casual miners.
Pay Per Last N Shares – The value of each share varies if you are lucky you can earn more if not you could earn less however on long-term dedicated miners will earn more on average.
Another thing you should check for before choosing a pool is the tax, the tax is usually there to cover the pools loses for PPS payments, the average tax is 2-3% but you can find reliable pools with both higher and lower tax.
Currently the most used pool is BTCguild, it recently increased its tax to 7.5% or PPS payments to encourage people to join other pools.

Pros/Cons

Pool Mining Pros
  • Pooled mining generates a steadier income.
  • Pooled mining can generate a 1-2% higher income (before fees, if any) due to long polling provided by the pools.
Pool Mining Cons
  • Pool mining can suffer interruptions from outages at the pool provider.
Pools are subject to DOS attacks and have other downtimes, too. Backup pools and solo mining can be configured for these cases.
  • Pooled mining tends to generate a smaller income due to fees being charged and transaction fees not being cashed out.
There are zero fee pools. Until now, transaction fees are not cashed out by any pool.
  • Pools might be part of attack scenarios.
Solo Mining Pros
  • Solo mining is less prone to outages resulting in higher uptime.
  • Solo mining doesn't incur any fees. For each discovered block, 25 BTC and the transaction fees are paid to the miner.
Solo Mining Cons
  • Solo mining tends to generate more erratic income.
  • Solo mining wastes time due to only supporting getwork pull.
Subscribe to: Posts (Atom)