How to Make Money Mining Bitcoin

Reading Time: 7 minutes

With the passage of time and with the advent and high use of technology, there have been great inventions made in the world. These inventions are to make the work of the people very easy.

This also includes the invention and change of the form of money from one form to the other. From barter system to metal coins ( like gold, silver, copper and so on) to  paper currency; there have great changes in the form of money also.

These are used by the people to get the things they need to satisfy their needs and demands.

Another form of currency which is developed is bitcoin. You might have heard the word, right?

If not then not to worry.

Here is a guide which will tell you about what is bitcoin and make we make money with mining bitcoin?

But first things first.

What is a bitcoin?

Bitcoin is basically a computer file which is stored in  wallet which is digital in nature.

This digital wallet is an application which can be stored wither in on your computer or in your smart phone.

People who have to send you money who have bought some thing from you or who want to send you money for any other reason, can send you bitcoin in your digital wallet.

Same goes for you, you can also send bitcoins to other people in their digital wallet to whom you have to send money.

In simple words Bitcoin is a form of digital currency. This form of currency was created in the year 2009 .

It can be used by people to get what they want from other people or the companies who accept it in the form of money for making payments. These transactions can be made across the internet.

The creator of the bitcoin was Satoshi Namakoto. He was the first few who was involved in the mining of the bitcoin.

Every transaction that you make with the bitcoin, either receiving or making payment, is recorded in a list which is public in nature. This list is known as block chain.

There are some of the advantages of using Bitcoin for making the transactions:

• The fee which is taken for making transactions through this is very minimal. So it does not fall expensive to make payments through this.
• Making payments and transactions through this is completely anonymous and is also private in nature.
• The transactions performed with the help of Bitcoin is made fast. It does not take time to make payments through this.
• There is no fear of your information getting stolen by people which is required for making information. People can not steal your information from the merchants with whom you make the transactions.

Now we come to the next part of the guide which is what is Bitcoin mining?

Bitcoin mining is the process of when the transaction is made between people through bitcoins. Those transactions as told before also get recorded in a list known as the block chain.

These transactions made become a part of the previous transactions.  When they become a part of the older transactions, they are awarded some number of Bitcoins per number of block chain.

Thus this is known as mining of the bitcoin where some number of bitcoins are made and earned by making some transactions with other people or merchants.

So this means that adding the transactions to the record makes you win some of the bitcoins which can be used for making other payments.

The other way of mining bitcoin is when you exchange your goods and services with the people who need it.

They in return get the bitcoins according to the value of the goods and services provided to the people.

Now the next thing that is to be talked about is whether mining bitcoin is profitable or not?

Then it is said that if you think of mining bitcoin at a small scale or if you have a business, not at a very large scale, then mining of the bitcoin might be successful for you.

But if you run a large business then mining of the bitcoin is a big no no for you.

There were early times and early days when the crypto currency was the one which was successful for the small players.

In the early times the only thing required for the mining of the bitcoin was a computer. But with time when this has become a big business and more people entering in the business it has become tough to earn profit with the mining of the bitcoin.

The cost of electricity and the cost involved in the installing of the equipment which is needed for mining of the bitcoin is high.

If this has to be at a large scale and if it is a large scale business, then all your profit would be eaten up by the cost spent on electricity and on the installation of the equipment.

The math problems of the bitcoin are also becoming tough and more complex, making it tougher to earn money through this.

A survey was conducted in the recent times only in the United States. It was said in that, that the investors in the United States who sold their bitcoins had to suffer losses. The losses they had to suffer were about $1.7 Million.

There are some other reasons also because of which the mining of the bitcoin is not profitable. Apart from high cost of electricity and high cost of installation of the equipment required for the purpose.

Those reasons because of which it is not easy to make profit with mining of the bitcoins are:

# The bitcoin block gets reduced after a time period of every four years. The meaning of the blocks getting reduced after a particular period of time means the rewards that you can earn will obviously get reduced.

# It is difficult to mine alone. But to solve this problem, pools were formed. These pools were known as the mining pools. Here people had joined hands so that they could mine together. But the problem with the pooling system was that there was a fee to approach to these pools. Pooling in means that the reward earned would also get distributed among the members of the pool.

# Mining has become difficult. It has become difficult in the sense that with the increase in the number of miners of the bitcoins in the network. It has become tough to solve the bitcoin equations.

Because the bitcoin equations are getting more complex, this means that you will have to increase the power of your computer to solve these equations. For this you will have to install the equipment which are expensive to buy. Therefore there would be an adverse effect on the profit that you have earned from bitcoin mining.

Another thing that is important to be explained in terms of mining of the bitcoin is the cloud minig bitcoin.

Now what do you means by cloud mining bitcoin?

As explained earlier, it becomes difficult to do mining of the bitcoin at a larger scale. This is because of the buying of the equipment which is expensive in cost.

But there is a solution to this that if you want to earn profits from mining of bitcoin, but if you do not want to spend more. Then you can buy time on some one else’s equipment for the mining.

One of the most popular methods for cloud mining bitcoins is to lease the processing power on some one else’s equipment at a remote data center. This will help you mine the bitcoins also.

You will not have to spend high on the purchase of the equipment also required for this purpose.

This however does not mean that there is no disadvantages and damages of using this method for the mining of the bitcoin.

There are of course some disadvantages of the cloud mining bitcoin:

• You can not make much money with this method also because there are costs of the operations of the equipment also that you will have to pay. Thus it will reduce the amount of money earned by you.
• If you want to go in for this option, then you become susceptible to certain scams also. It is not tough for the scammers to set up a cloud mining scam. These scams might be of the sort of taking money for something and then not delivering what was promised. Or maybe not delivering for what the money was taken for.
• When you go on for this option for mining of the bitcoin, you invest in a cloud mining site. For this you have to trust them that they will provide you with the right things. You lose a little control.

In total what can be said about the mining of the bitcoin is that it can not be called definitely profitable, if it is to be done at a large scale. This is because of the extra costs involved in it for increasing the level of bitcoin mining.

If you are considering an option of going into the leap of the bitcoin mining, then there has to be a strategy that you would have to make.

For this strategy, remember both the options of cloud mining and mining pools are not bad but only if used wisely.

If you think you are smart enough and are capable of mining the bitcoin all by yourself, you are not.

Do not plan to mine the bitcoins all alone. You will end up getting frustrated and in the end with no money earned.

But if the mining is to be done at a small scale, then this can turn out to be successful. Go on if you think not much is to be spent on electricity or installation of equipment.

But mind you again do not try to do this alone and by your self. Else you will end up in a problem of getting yourself frustrated.

Also not earning anything by the end of the whole frustrating and mind boggling process. Either go in for cloud minig or for mining pool but never alone!!