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You need to know how to make the best use of your money and equipment. Find out how to mine Bitcoin in the most profitable way, using a Bitcoin mining calculator.
What is Bitcoin?
Bitcoin is a digital currency. Unlike paper money, Bitcoins have no central government controlling them. It is essentially numbers stored on a computer. That was how it was created and the format it shall remain, never becoming a physical product such as cash or gold. When developing Bitcoin, it was set up to release a batch of coins at set intervals, roughly every 10 minutes. Each batch is a block, in which the Bitcoins reside waiting to be mined, in order for the coins to be released.
What is Bitcoin mining and how does it work?
The phrase ‘Bitcoin Mining’ may conjure up images of somebody with a pickaxe digging up coins. However, Bitcoin Mining is not the physical digging of coins. It’s the process of solving mathematical puzzles using specialised software. Solve the puzzle and you’re rewarded with Bitcoins. Simple.
Once a computer solves the block’s complex puzzle finding a valid hash key it is added to the blockchain. At the same time, the miner is rewarded with new Bitcoins. The blockchain is a digital public ledger of all the transactions ever made in cryptocurrency. It keeps a record of who owns which Bitcoins.
There are millions of these mathematical puzzles surrounding each block. They need massive amounts of computer power to solve them. A computer takes the puzzles one at a time and tries to solve it. At which point the block either unlocks or the computer needs to try again to solve it. How quickly the puzzle is solved depends on the speed and power of the computer used to try to open the block.
Who are Bitcoin miners?
To start with Bitcoin miners were just cryptography enthusiasts. People with an interest in the project used their spare computer power to mine. They would do this in order to earn themselves Bitcoins. As the value of Bitcoin has risen, more people have seen mining as a business opportunity. Investing in warehouses and vast amounts of hardware. Attempting to mine as much Bitcoin as possible.
Does Bitcoin mining pay off?
Bitcoin mining is much more than just trying to earn Bitcoins. It is an investment. You wouldn’t make an investment without calculating the potential profit that could result from it. Bitcoin mining calculators will help you determine the profitability of your mining operation. One way to massively decrease the initial costs of hardware and premises is to make use of cloud mining.
Cloud mining. What’s that?
Cloud mining is the process of Bitcoin mining, without large initial costs. Making use of a remote data centre with shared processing power. This style of mining enables users to mine Bitcoins without managing the hardware themselves. The customer only needs to register, and purchase mining contracts to begin the mining process.
Bitcoin mining costs
There are quite a few costs involved in starting Bitcoin mining. The two largest being:
Hardware costs: The initial cost of mining hardware is usually the largest expense for any new mining operation. Good mining hardware is expensive. Mining uses a lot of energy and therefore produces a lot of heat. You will also need to have cooling fans to protect your hardware from damage.
Electricity costs: Bitcoin mining operations use a large amount of electricity. The cost of power has a significant impact on mining profitability. For this reason, many Bitcoin mining operators are in locations that have cheaper power, such as China.
Bitcoin mining calculator
Before setting up a Bitcoin mining operation, it is wise to use a Bitcoin mining calculator. They calculate the potential profitability of Bitcoin mining, by taking all costs into account. They also take into account the current Bitcoin price, to see potential profits on an hourly, daily, weekly, monthly and yearly scale. You are simply asked for your ongoing costs and your one-off investments, to work out your expected ROI. This calculation will show long it will take to recover your investment and start earning.
Do I need a Bitcoin mining calculator?
Bitcoin mining is a very competitive market so it is vital to keep track of how well you’re doing. Bitcoin mining calculators are not a one-time tool for startups. With fluctuations in Bitcoin price, power costs and other factors, the impact on the mining outcome needs to be tracked.
Get an exact breakdown of how each price influences profits by using a Bitcoin mining calculator. It is an essential tool, helping you make more informed decisions about your mining investments.