Bitcoin Mining – How To Mine Bitcoin

Giant Bitcoin Mining
Large Facility Bitcoin Miner System
Get Started Mining Bitcoin
Get Started Mining Bitcoin – How To Mine Bitcoin on YouTube, Also See our Cloud Mining Page.

What is Bitcoin? and How do you mine it?

This Educational Bitcoin Mining video will go over Bitcoin mining
How to set up Bitcoin Mining Software on your computer. [KGVID]http://bitcoinaffiliatelist.com/wp-content/uploads/bitcoin-for-beginners1.mp4[/KGVID]

How Bitcoin Mining Works – UPDATED SEE SECTION BELOW

Before you start mining Bitcoin, it’s useful to understand what Bitcoin mining really means. Bitcoin mining is legal and is accomplished by running SHA256 double round hash verification processes in order to validate Bitcoin transactions and provide the requisite security for the public ledger of the Bitcoin network. The speed at which you mine Bitcoins is measured in hashes per second.

The Bitcoin network compensates Bitcoin miners for their effort by releasing bitcoin to those who contribute the needed computational power. This comes in the form of both newly issued bitcoins and from the transaction fees included in the transactions validated when mining bitcoins. The more computing power you contribute then the greater your share of the reward from your bitcoin mining.

Bitcoin is a digital currency, which is supported by a P2P network of computers across the internet that act as servers to process the financial transactions of this currency. Some believe Bitcoin is a Scam, or Ponzi scheme, but once one understands the concept of Bitcoin, it is clear that it is not.

 

Bitcoin Mining
Bitcoin Mining

Introduction

Mining is the process of adding transaction records to Bitcoin’s public ledger of past transactions. This ledger of past transactions is called the block chain as it is a chain ofblocks. The block chain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.

Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain aproof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function.

The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a “subsidy” of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.

Bitcoin mining is so called because it resembles the mining of other commodities: it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.

Difficulty

The Computationally-Difficult Problem

Mining a block is difficult because the SHA-256 hash of a block’s header must be lower than or equal to the target in order for the block to be accepted by the network. This problem can be simplified for explanation purposes: The hash of a block must start with a certain number of zeros. The probability of calculating a hash that starts with many zeros is very low, therefore many attempts must be made. In order to generate a new hash each round, a nonce is incremented.

The Difficulty Metric

The difficulty is the measure of how difficult it is to find a new block compared to the easiest it can ever be. It is recalculated every 2016 blocks to a value such that the previous 2016 blocks would have been generated in exactly two weeks had everyone been mining at this difficulty. This will yield, on average, one block every ten minutes. As more miners join, the rate of block creation will go up. As the rate of block generation goes up, the difficulty rises to compensate which will push the rate of block creation back down. Any blocks released by malicious miners that do not meet the required difficulty target will simply be rejected by everyone on the network and thus will be worthless.

Reward

When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 25 bitcoins; this value will halve every 210,000 blocks. See Controlled Currency Supply.

Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.

While the uses for Bitcoin are virtually infinite (paying for goods, services, or money laundering, gambling and drug smuggling) it’s structure remains concrete and open source. However, the VALUE of each Bitcoin is disputable. In theory, Bitcoin becomes harder and harder to mine, which means it takes more and more energy (electricity for your computer/”mining rig” to run) to process Bitcoin and solve “Blocks” of data. Therefore, the price of Bitcoin may be related to the price of energy and the cost of maintaining this network. While it is easy to assert that there will be additional computers added to the network daily, which would ease the work load on the initial nodes, one can only speculate that the price of Bitcoin MUST increase over time. Especially when power costs in the foreseeable future will be rising.

bitcoin-miner

Currently, only 21,000,000 Bitcoins can be created, but that I guarantee will rise, as many are hoarding the coins and there just simply wont be enough to go around and not enough work, or transaction data, for the increasing number of miners out there.

Specialized computers and “Mining Rigs” are becoming available from companies such as Butterfly Labs and others, which harness ASIC technology. ASIC means application-specific integrated circuit- so these devices are engineered to mine Bitcoin and only mine Bitcoin. This creates an extremely powerful, and efficient machine, over 100x times more efficient than current setups. These machines are said to be able to mine Bitcoin up to 50 GH/s (if that means anything to you, but it’s A LOT) extremely efficiently! More efficient than any desktop computer rig. It will be interesting to see how these systems will change the future of bitcoin mining.

Along with the appearance of ASICs came the possibility of mining Bitcoin in much more substantial amounts than with GPUs. ASIC is an Application Specific Integrated Circuit specialized for solving a particular task, which in our case is Bitcoin mining. These circuits are several times more profitable than GPUs because they consume much less energy while providing much more computing power (hashrate). This served as a motive for coin mining businesses appearance.

It is still easiest to go to a market and purchase and trade bitcoin, litecoin, or any other alt-coin, Currently you need a very powerful pc to mine bitcoins if you want to build a system or have purchased a very powerful machine then go for it. If you have a  normal pc or laptop we recommend Cryptsy

BitCoin Free Twitter
https://twitter.com/BTCFREEE
Learn about Bitcoin Cloud Mining

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Bitcoin Wallet
GUI Miner Page Download the Miner Direclty Guiminer.exe

Free Bitcoin Faucet Rotator

Bitcoin Exchange / Market  – Cryptsy

BitCoin Calculator on the right side of this page:

MH/s Hardware Comparison: https://en.bitcoin.it/wiki/Comparison…

 

This Section has Been updated – Updated Equipment 2016

Watch The Videos Below, All the links are provided below the video they are associated with.

How to Mine BitCoin – Updated

As technology changes and tome goes on the equipment used it quickly being made more efficient. The software used now is being developed to handle more and run with very few errors. These videos by Fred Yen will get you up to speed with bitcoin mining.

Below are Links To All of The products Listed in this video.

Raspberry Pi

SB Raspberry Pi Case

8GB Class 10 SDHC Memory Card

Premium Bus-powered 8 PortUSB 2.0 Hub

ASICMiner Block Erupter USB 330MH/s Sapphire Miner or,

ASICMiner Block Erupter Cube 30GH/s to 38GH/s Miner

ARCTIC Breeze Mobile, USB-Powered Fan

Micro-USB to USB Cable

RJ45 Cat-6 Ethernet Cable

BitCoin Mining Software

Coinbase Account

BitMinter Info

Slushs Pool

BitcoinMining

Bitcoin Mining – How To Mine Bitcoins – Bitcoin Mining Software – Bitcoin Mining information