Bitcoin’s price has recently peaked above $5,000, sparking a new wave of interest in bitcoin mining and the cryptocurrency in general. According to many long-term bitcoin holders and market analysts, we have yet to see just how high the bitcoin price can climb. For example, Saxo Bank analyst Kay Van-Petersen thinks that bitcoin’s price has the potential to hit over $100,000 in 10 years, which would make even a relatively small amount of bitcoin worth a lot of money.
But before you visit an online Bitcoin exchange service like Coinbase to purchase your first bitcoins, you may want to consider another way of acquiring the revolutionary digital currency.
Just like gold or silver, bitcoins are mined and their supply is limited. Fortunately, you can mine bitcoins even without the strength to swing a pickaxe for hours on end before getting fatigued. All you need is a PC and a dedicated bitcoin mining hardware device to do the hard work for you.
What work are we talking about? Math and computations, lots of them. The job of bitcoin miners is to find a special number called nonce. To do that, they must try quintillions of numbers before they can determine which of them is the right one. Once a miner finds a number that fits, the miner is rewarded with 12.5 bitcoins.
Because it’s so difficult to find the special number, miners have formed large mining groups to pool their computational resources together, sharing the bitcoins they are rewarded for their work.
But that’s not the only way how miners make money. People who send and receive bitcoins pay miners fees to process their transactions to include them in the network. “According to data from blockchain.info, the value of transaction fees paid to miners has reached an all-time high of $2.3 million,” reported Business Insider. Clearly, mining can be a very profitable business even without taking into account just how much bitcoin’s price could grow over the next few years.
Bitcoin Mining Hardware
While you could mine bitcoin using your laptop or desktop computer, you would spend more money on electricity than you would make in bitcoins. These days, bitcoin mining is all about dedicated mining hardware, with ASIC (Application-Specific Integrated Circuit) miners being most powerful.
ASCI miners, like the excellent Antminer S9 or the Bitmain Antminer R4 offer a fantastic price-to-performance ratio, and they are surprisingly simple to connect and configure, despite looking terrifyingly nerdy and complex.
The Bitmain Antminer R4 has a hash rate of 8.7 TH/s, and the Antminer S9 has 13.5 TH/s. In comparison, the average home computer is able to produce only around 100 MH/s. That’s a huge difference in computational power. Of course, such an excellent number-crunching capability isn’t cheap. ASCI miners themselves are pricey, but you also need to take into consideration how much electricity they consume. The Bitmain Antminer R4 operates with a power consumption of 870 W, and the Antminer S9 with 1323 W.
Regular PC power supplies are not designed to handle so much power, and they also don’t have nearly enough power connectors to supply capable ASCI miners with a steady stream of electrons. What you need, instead, is a powerful mining power supply like the APW3 from AntMiner. This small juggernaut can deliver 1,200 W at 110 V and 1,600 W at 220 V. It has ten 6-pin PCIe connectors and requires a standard PC power cable.
Starting Your First Bitcoin Mining Operation
Once you have all the equipment you need to mine bitcoins, it’s time to join a bitcoin mining pool and configure your mining equipment. You can find a comprehensive list of many mining pools on this website. Both the Antminer S9 and the Bitmain Antminer R4 have a built-in web management portal that makes configuration a breeze.
From there, all you need to do to make money is let your bitcoin miner do its job. Make sure to check it from time to time to verify that it’s still running as it should and enjoy your bitcoins.