Bitcoin mining is a peer-to-peer validating of the Bitcoin transactions proposed to the network in a decentralised network. The process involves adding valid Bitcoin transactions to the ledger of past transaction. Each transaction is called block, and the ledger of past transactions is called Blockchain. (Read also: What is Blockchain?)
In general, any laptop can be used to validate Bitcoin transaction, but it would incur losses in terms of power costs and hashes created. Hence, more advanced, energy efficient and diligent mining hardware systems called ASIC miners are used. Application Specific Integrated Circuit (ASIC) is a microchip solely designed to mine Bitcoins at a super fast speed (higher hash rate) with less power consumption.
What is Hash Rate?
Hash rate denotes the measure of mine’s performance and is measured in megahashes per second (MH/ sec), gigahashes per second (GH/ sec)and terahashes per second (TH/ sec). It is a speed at which a miner more precisely the hardware can solve a problem (transaction block). A higher hash rate means the miner can solve a transaction block giving him more opportunity to mine Bitcoin and receive block reward in coins.
Hardware for Bitcoin Mining
Bitmain Technologies Limited manufactures the most popular hardware miners currently in the market. Their series of AntMiners is the most popular choice among miners. There are other competitors which provide almost similar power efficiency. The list for comparison is given in the table below.
Software for Bitcoin Mining
After selecting the hardware, you need a software to run your hardware. If you are using CPU/ GPU Bitcoin mining or FPGA (Field Programmable Gate Array), you will need the standard Bitcoin client and the mining software. The standard Bitcoin client is a gateway to connect with Bitcoin clients. Bitcoin mining software tells the hardware to solve transaction blocks. You need a mining software in case you are using ASIC miner; however, the newer models have the all the software pre-configured.
How to set up a Bitcoin ASICs Miner?
The required instruments to set up a Bitcoin ASIC Miner include the mining hardware (number of units according to the profitability required), a software to run the hardware, a Bitcoin wallet to receive and send Bitcoins and a place where the heat produced from the ASICs miners can be regulated by using cooling techniques or setting up on a cold location; the miners work ideally at 25 degrees Celsius.
Joining a Mining Pool or Going Solo
Now, when you are set up with the hardware and software, the next step will be either to join a mining pool or to connect to the blockchain directly. Bitcoin miners share or pool the resources and block rewards equally among the miners according to the proportion of their contribution for mining hash power. (Read What are Bitcoin mining pools? to know more about the mining pools). The two of the largest Bitcoin mining pools are AntPool and F2pool. While connecting to the blockchain directly, one must download the client from Bitcoin core website to avoid software discrepancies.