Everything you need to know about what is bitcoin mining and how to do it

by Ryan Williams World Leading Cryptocurrency Exchange

Bitcoin mining is easier said than done. Every time you mine bitcoin, you verify bitcoin transactions in a decentralized ledger or blockchain. However, before you invest time and equipment in bitcoin mining, an elaborative discussion on how to mine bitcoins and what is bitcoin mining all about is worthy. 

The primary draw for bitcoin mining is the prospect of being rewarded with the all valuable digital bitcoin tokens. Bitcoin mining is legal in the USA and many other countries of the world including Japan. It is usually accomplished by running the SHA256 double-round hash verification process to validate bitcoin transactions. The process also provides the requisite security for the public ledger of the bitcoin network.

The process of how to mine bitcoins is difficult to do profitably the beginner, if not complex. The miners are compensated by the network by releasing bitcoins to those who contribute to the needed computational power of the bitcoin mining process. The more computing power you contribute, the greater will be your share of the reward. Each time a block is added to the bitcoin blockchain, the network gives the miner some bitcoins as a reward.

Bitcoin mining using your own hardware

To mine bitcoins, you need hardware such as Custom Bitcoin ASIC chips. ASIC stands for application specific integrated circuit, which is designed specifically to mine bitcoins. ASIC chip needs a power supply to run it. Anything less will consume more in electricity than you are likely to earn. Due to the high costs involved, mining bitcoins using your own hardware is only recommended if you have access to plentiful and cheap electricity. Use a bitcoin mining calculator to lay out the costs of mining before starting mining bitcoin yourself. Remember that bitcoin mining is an expensive activity, prices can fluctuate and power prices can vary widely.

How purchasing a bitcoin mining contract makes sense?

In your pursuit to know what is bitcoin mining and how to mine bitcoin, keep in mind to use the best hardware to be profitable.  Once you have received the hardware, you need to download specialized bitcoin mining program. World’s trusted cryptocurrency platform OKEx offers excellent systems built specifically for bitcoin trading. You can also purchase the bitcoin cloud mining contract to mine bitcoins in a cost-effective way, or alternatively can seek expert advice on what is bitcoin mining and how to mine bitcoin. A contract typically lasts from 1 to 3 years, although some may last longer. The benefit of bitcoin mining with an innovative aggregator of blockchain projects such as OKEx is that you earn cryptocurrency without having to put down money for it.

Resolving the issue of double-spending

The miner is rewarded with bitcoin for discovering a solution to a complex hashing puzzle. The probability of discovering a solution for the puzzle depends on the total mining power of the network. A miner verifies the previous bitcoin transaction. This keeps the bitcoin users honest and also solves the problem of double-spending that happens when a user illicitly spends the same token twice.

Double spending is not an issue at all with fiat currency. You pay your dollar amount and get the product or service in return. The currency is no longer in your hands and cannot be used again. However, with digital currencies such as bitcoin, there is a possibility that the holder could make a copy of the digital token, send it to a merchant for payments while retaining the original. Block verification eliminates the chances of any double spending. Once a miner verifies a block, they become eligible to be rewarded with a quantity of bitcoin. 

Consider opting for cloud mining

However, with cloud-mining, someone else does bitcoin mining for you. The company rents its hardware or a portion of the hashing power, and you are typically paid for your investment with bitcoin.

Joining the pool of miners

You should join a bitcoin mining pool before mining bitcoins. The pool consists of miners who work together to solve a block and share its rewards. Without joining the pool, you may not be able to earn bitcoin even after a year of mining effort. It is far more convenient to share the work and rewards, both by joining a pool of miners. The mining pool is a standard practice in the cloud and personal mining. OKEx has a number of active miners listed on the site for a variety of tokens such as BTC BCH BSV, ETH ETC, LTC, DASJ and DCR that utilize a variety of PoW (Proof of Work) algorithms including SHA256, Ethash, Scrypt, X11 and Blake256.

Setting up a bitcoin wallet

Next, you need to setup a bitcoin wallet or use your existing crypto wallet to receive the bitcoins you mine. Bitcoins are sent to your wallet through a unique encrypted address that belongs only to you.  Bitcoin wallet can be obtained by downloading a software client to your computer. Take care to secure your wallet through a two-factor authentication or storing it offline on a computer with no internet access. Some wallets are hybrid, means you can access them both through the software on your computer as well as the app on your mobile phone.

Onchain- Cypto wallet with institutional-grade, muti-layer security by OKEx

OKEx offers Onchain Wallet for securely storing your bitcoins. The multi-currency storage wallet is compatible with mainstream and ERC20 tokens. You can easily segregate your funds in Onchain wallet for the easier management. Onchain wallet comes with multi-security layer and institutional-grade security mechanism to safeguard your assets. When you log on to your wallet, a text code will be sent to your mobile and also on Email that you need to enter in order to securely access your crypto wallet.

Easily set up Seed Phrase or Recovery Key

The wallet’s easy backup process will help you in setting up the Seed Phrase. It is a recovery key consisting of a list of random words which is used in case you lose your wallet’s password or your storage device is lost. The seed phrase also comes handy when your crypto wallet is not functional. Onchain web wallet can be downloaded by scanning the QR code from OKEx website.

Get your first bitcoin within minutes, not months or years!

If you think that your endeavor on how to mine bitcoin would require a certain level of mining expertise, worry not as with OKEx crypto exchange, you can get your first bitcoin within minutes by registering for your OKEx account and verifying your identity. Thereafter, you can easily buy your bitcoin by paying through credit card, Apple Pay or bank transfers by paying through fiat currencies such as the US Dollar, Russian Ruble or Japanese Yen.

Get started with crypto trading right away  

You can have quick trade on OKEx in bitcoin and other altcoins and get started within a few minutes by selecting the crypto you want to buy and paying the vendors through multiple options. Once the payment is confirmed, the crypto will be automatically transferred to your OKEx account. OKEx P2P is a secure, stable and fast digital currency trading service that covers tens of millions of users in more than 130 countries all over the world.

OKEx also lets you earn interest while you hold your crypto coins through its Earn program. Different approaches are used by the exchange, ranging from the traditional financial systems to staking for providing you different earning options. For example, you can supply your crypto to the decentralized lending pool, earn interest and also get COMP tokens for extra yield. Use OKEx Loan to earn interest on your tokens by C2C Loan directly to other OKEx customers.  You can withdraw your tokens anytime though withdrawal policy may be different for every financial offer you subscribe to.

Always stay updated

It is important to stay updated with bitcoin news for your bitcoin mining profits. Visit the Announcement section of OKEx to get the latest updates on its bitcoin mining and crypto trading services. OKEx Academy has useful information on what is bitcoin mining, how to mine bitcoins, industry analysis, and beginners tutorials on how to earn cryptocurrency with OKEx pool, how to earn bitcoin on OKEx and more.

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Created on Sep 15th 2020 08:08. Viewed 553 times.

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