Rarely are technologies introduced that leave us wondering how we managed without them. The internet and smart phones are two such technologies. One day Bitcoin will be one of them. The building blocks required to seamlessly integrate cryptocurrency into our lives are currently being developed around the world. I’m a certified heavy duty mechanic with a Computer Science degree and I know this to be true, Bitcoin is the future. Oddly enough nothing gets me more excited than cryptocurrency and the mining of it. Allow me to explain to you the steps you can take to start mining Bitcoin today.
Pictured above is my first Bitcoin mining setup. I ran it in a spare bedroom in my basement on a standard 120 volt outlet. It’s an Application Specific Integrated Circuit (ASIC) designed to hash the SHA-256 algorithm. I’ll touch on this later. This unit operates at a rate of 13.5 trillion hashes per second (TH/s).
There’s generally two paths towards mining a Proof of Work cryptocurrency like Bitcoin. The first and more traditional method is graphics card or GPU mining. It requires a pretty solid understanding of how to build a personal computer. It can be tricky because you have to run multiple video cards off a single motherboard. One video card just doesn’t provide enough hashing power. All of your components have to be compatible and installed correctly. Tweaking BIOS settings is required in order to make the video cards run efficiently. You can see why it’s not the easiest path for a beginner. Graphic card mining has traditionally been replaced with ASIC mining whenever possible as better performance is achievable through ASICs.
ASIC miners are computer servers purpose built to hash a large number of alpha numeric strings as quickly as possible in order to authenticate a given block of cryptocurrency transactions. It’s a race and the first one to find the correct answer gets the reward. The 12.5 Bitcoin reward is allocated once a full block is mined. Early ASICs like the one in the photo above were designed to run off 120 or 240 volts. Profitable ASICs on the market today start at $1,000 USD, consume between 2,000 to 3,000 watts of electricity, require 240 volts to operate and hash at a rate of 30 TH/s to 40 TH/s. Unfortunately, North American homes are wired for 120 volts. There’s two solutions to this problem if you want to run one at home. Pay an electrician to rewire a socket to 240 volts for you, or purchase a NEMA 14–30P to NEMA 6–15/20R adapter. This adapter allows you to safely power your new ASIC miner from any standard dryer outlet. Household dryer outlets are a great option for running today’s ASIC miners as they put out 240 volts of electricity and are designed to withstand the high amperage draw of your average 3000 watt dryer. They are also not in use 90% of the time in your average household. A wired Ethernet connection is also required, no competitive ASIC miners on the market today support WiFi connections.
ASIC miners are designed to run specific Cryptographic Hash Algorithms. The algorithm they run determines what cryptocurrency coin they can mine. As mentioned above the miner in the photo was designed to hash the SHA-256 algorithm. The most popular coins mined today with this algorithm are Bitcoin (BTC), Bitcoin Cash (BCH) and Bitcoin SV (BSV). Miners will switch between these three (and others like it) depending on which is currently the most profitable to mine. At the time of writing BSV is the most profitable SHA-256 coin to mine.
Now that you know what kind of miner you wish to purchase, where you’re going to operate it and what kind of coin you’re going to mine, it’s time to choose a mining pool. This is the second last piece of the successful mining puzzle. Mining pools are necessary. Without access to one it could take almost ten years to mine a full block with a single ASIC. All the miners in a pool work together as a team to mine the same block. Some of the bigger pools out there can mine up to 16 blocks per day. The block rewards are then divided up among the participants in proportion to the total hashing power they provided towards the mining of each block. Pools vary depending on what fees they charge, where they’re located and how large they are. Upon creating your pool account you will be given a URL to enter into the Miner Configuration screen on your miner. You can access your miner’s configuration screen by locating your miner IP address from the list of online devices in your home router admin screen. You also need to enter the userID you created in the mining pool into your Miner Configuration screen along with an individual worker ID. For example userID.Worker1, userID.Worker2 and so on depending on how many miners you have pointed at that specific pool.
The final piece of the puzzle is a wallet. A wallet address is a completely secure online location that keeps a current and accurate record of the number of (in this case) Bitcoin you have accumulated to date. This wallet address is available to both send or receive Bitcoins 24 hours a day, 365 days a year. This is something worth repeating. Your wallet address once created is always ready to send/receive regardless of whether or not your hardware/software wallet is connected to the internet. Wallets come in two forms, software and hardware. Most software wallets are free apps you can download to your phone. They are not very secure and therefore not recommended. Hardware wallets are the only secure way to store Bitcoin. Some of them look like USB sticks. Once initialized your wallet will provide you with a unique wallet address and a 12 to 24 word recovery phrase that can be used to restore access to your Bitcoin in case your physical hardware wallet is lost, stolen or damaged. Don’t forget to enter your unique public wallet address into your pool configuration screen so they can deposit your Bitcoin mining rewards that are owed to you.
I hope I have shed some light on the process of mining Bitcoin for you in 2019. The right time to mine is now. Jump in with both feet and eyes wide open. I can say from personal experience it’s definitely a risk worth taking!