Learn how to mine Bitcoin, including how it works and the best hardware options. You’ll also find out about mining pools, and get an understanding of the economic factors that influence profitability.Learn how to mine Bitcoin

Cryptocurrency mining is a vital process that supports the blockchain network, verifying transactions and adding new coins into circulation. But it’s not easy to understand for beginners. This article breaks the process down for beginners, explaining essential equipment and software and analyzing economic considerations.

Transaction verification

Bitcoin miners use computers to compete against each other to be the first to solve a complex mathematical puzzle. The first miner to reach a solution is rewarded with Bitcoin. The puzzle is generated by running the information in a block of transactions through the SHA256 algorithm. The resulting number, known as a hash, is unique and can be quickly verified by pasting the content into an online SHA256 hash generator.

Achieving a hash requires major computing power, and the competition is intense. As more miners join the network, the hash difficulty rises. To be competitive, miners must purchase expensive equipment—such as graphic processing units (GPUs) or application-specific integrated circuits (ASICs)—and consume massive amounts of electricity.

The most important step is to set up a wallet that will store your mining rewards. Wallets are available for many cryptocurrencies, and the recommended option for a specific coin will be listed on its website. You should also ensure that your computer has a stable and high-speed Internet connection to connect to the blockchain network and communicate with other miners.