Bitcoin is a digital cryptocurrency which, like any other currency, requires to be produced, spent and verified. Bitcoin mining is extracting new bitcoin while verifying transactions of the used ones by employing powerful hardware and mining software.
Created in 2009, the digital world of crypto assets has emerged as the economic gorilla. Bitcoin trading has become a method for a safe investment for many. Although it comes with its downsides, being an online selling and buying service, it can be a rewarding job for miners. In this blog, you can learn how to mine bitcoin in India and how to mine bitcoin on your own pc.
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A Brief about Bitcoin Mining
Bitcoin mining, as the term may suggest, is the extraction of the cryptocurrency by solving complex equations of mathematics using high powered machines. The process of bitcoin mining is computational and complex, even for the most powerful computers.
The purpose of this exercise is to make the bitcoin payment network trustworthy for the users. Another benefit of this long and challenging game of mining is increased security as every transaction information gets verified by the bitcoin miners every time an equation is solved.
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In a standard currency, transactions are documented by banks, point of sales systems or physical receipts. Similarly, a bitcoin transaction is verified by solving equations, and bitcoin miners produce a “block” which is essentially a list of transactions that are waiting to get confirmed. A block is then compiled in a public chain of already prepared blocks in the past as if block becomes the next link in the chain, called the “blockchain”. For the mining process to take place online, a software called bitcoin miner or bitcoin mining calculator is used. The computers which are often modified to handle the complexity of equations are termed bitcoin mining machines.
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Things you need to know before Bitcoin mining
Bitcoin mining is the mechanism of receiving bitcoin by running the authentication process to verify bitcoin transactions. These transactions provide the Bitcoin network with protection, which in turn compensates miners by providing them with newly generated bitcoin. In simpler words, it is a way to earn the globally trending cryptocurrency, bitcoin, by helping with transaction data verification.
Bitcoin mining pools utilize combined resources to strengthen the probability of finding a block or otherwise successfully mining for cryptocurrency. Cryptocurrency mining pools are groups of miners who share their computational resources and share rewards. If the bitcoin mining pool is successful and receives a reward, that reward is divided among participants in the pool on the pro-rata basis of their computational power.
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To determine whether bitcoin mining is profitable in India or not, one has to take into account many factors related to bitcoin mining. These include the cost of the electricity to power the computer system and cool the air for effective operation, the availability and price of the computer system, utility bills like internet and rent, and something called the difficulty in mining. The difficulty is associated with number and power of bitcoin mining machines which in turn depends on how the price of bitcoin will impact potential rewards. The biggest challenge in India is the cost of electricity is high and the temperature is not friendly throughout the year.
Types of Bitcoin Mining
The most important component to execute the mining process is bitcoin mining hardware. Users have used various types of bitcoin mining hardware over time. Methods like CPU mining, GPU mining, FPGA mining, ASIC mining either independently or as part of cloud mining are primarily used to mine bitcoin.
- CPU mining: Early versions of the Bitcoin client allowed users to mine through their CPUs. As the network hash rate grew, the number of bitcoins produced by CPU mining was lower than the cost of power to operate a CPU. The advent of GPU mining rendered CPU mining financially unwise. Hence, the option was excluded from the user interface of the core Bitcoin client.
- GPU mining: GPU mining is not only more efficient but faster than CPU mining and is the best bitcoin mining hardware to mine Bitcoins in this era. GPU stands for Graphics Processing Unit, which is a feature of high-end graphics cards. These can calculate all the complex polygons needed in high-end video games, which makes them particularly great at hashing mathematics necessary to solve transaction blocks.
- This was followed by FPGA mining hardware which was more powerful than GPU but this era did not last long.
- ASIC mining: An application-specific integrated circuit (ASIC) miner is a device that is designed for the sole purpose of mining and this made all other predecessor mining devices unprofitable. It is usually designed for a particular cryptocurrency at a time so a bitcoin ASIC miner can only mine bitcoins or the coins using the same mining algorithms only. They are not only faster than all previous technologies but also consume a comparatively low amount of power.
- Cloud mining: Thus can either be shared mining where the resources get shared or rented mining where the computers installed in favourable locations are rented and are used for mining. The mechanism of rented cloud mining requires no installation; instead, the hardware runs directly on the host premises. As of today, Bitcoin cloud mining in India is mostly done by using rented cloud computing power available in free electricity or colder countries.
How to start mining Bitcoin?
If the world of crypto assets is so attractive, then what stops the miners from taking the step and getting into mining, you must wonder. It is a question of having the resources and ability to spend time and energy to acquire bitcoins through mining. Other than monetary investment, the process requires powerful hardware to crack computational equations, so it can also be done from the comfort of your home.
- The first step is always the setup. You will need to get a mining rig to set up a machine with higher computational power and low energy consumption.
- Next comes getting a bitcoin wallet. A bitcoin wallet saves all your data and earnings of the cryptocurrency. This is comparatively easier to set up.
- Join a mining pool afterwards, and you are good to go. All the miners in the group solve an equation as a team and divide the reward. This makes the process faster and mining easier.
- Is Bitcoin mining legal in India?Bitcoin buying, selling, trading and mining is not illegal in India by any law. The frauds and unknown sources of trading have otherwise made it difficult for miners to continue mining without any fear, but that doesn’t mean the ever-increasing bitcoin industry is illegal.
- How long will it take to mine Bitcoin?It takes 10 minutes for a miner to solve one crypto puzzle and get rewarded with bitcoins. The solution is basically the generation of a new hash for the block and is done via machines.
- Is it possible to mine Bitcoin on a laptop?If the mining machinery is powerful enough to handle and solve complex computational problems, then yes, mining is possible by using a laptop or PC. However it is absolutely not profitable to do it and it should only be done as an educational exercise.
- Is mining bitcoin profitable?The process of mining a bitcoin needs a lot of investment beforehand, and usually, the failure of mining operations that can cause problems at either hardware or software level including increasing in difficulty can cost you a huge debt. With its ever-increasing value, bitcoin mining can be profitable if the mining is executed by using the requisite hardware.