If you have opened the link to this article, I am sure you are into Bitcoins. If you are a new investor but you must be drooling to know all the nitty-gritty of Bitcoins. But before knowing about Bitcoins, you must learn the correct process to mine Bitcoins.
In the case of other cryptocurrencies, which are also famously called altcoins, the mining process is relatively easier. Still, when it comes to mining Bitcoins, things get a little complicated as there is a limit to which one can mine Bitcoins.
But hold your horses! First, you need to know how mining works, and for that, you need to know the basics of the Bitcoin mining pool.
Bitcoin Mining Pool 101
Bitcoin Mining Pool is a group of cryptocurrency miners who come together and amalgamate their computational resources so that they are able to mine bitcoins. The basic purpose of a mining pool is to ensure the chances of finding a block so that a Bitcoin can be successfully mined.
For instance, you want to mine a Bitcoin, you will now get together with your friend and tell your friend to bring the resources required to mine Bitcoin. Your friend will bring the processing power of his computer. So, after all the efforts put in by your friend, you will find a block.
If you do find a block, it means that you have successfully mined a Bitcoin. After successfully mining a Bitcoin, you and your friend will review it together. Do not worry, as the reward will be divided among all the contributors that had taken part in the mining process.
However, it is worth noting that the reward will not be distributed equally, but according to the contribution of each contributor.
What Does It Take to Mine?
The processing power of each contributor is taken into account. For instance, you and your friend have received a reward of $100, don’t for once think that each of one you will get $50. Your reward will be totally dependent on the contributions you two have separately made.
If you have contributed 60%, then you will get 60 dollars. Do note that you need to provide your valid ID proof and the proof of your source of income to receive rewards in some cases.
In the beginning, if you have successfully mined Bitcoin, you will have the choice of going solo or still using your friend as a contributor.
If you use your friend as a contributor, you will remain in the mining pool. As a beginner, I would suggest you not abandon your friend while mining Bitcoin as staying in a mining pool offers many benefits. If a ton of computers is used in mining a Bitcoin, the resources get divided, further enhancing the hash output.
For instance, you and your friends bring in six devices, each that offers 350 mega hashes per second, then it will generate a massive mining power worth 2ghz.
What Are The Top Bitcoin Mining Methods?
Like I mentioned previously, all cryptocurrencies are not mined the same way, but some of the rules remain the same. They are generally three popular mining methods.
Proportional Mining Pool
This is the most common form of a Mining pool. In this method, contributors get together and contribute their computing processing powers. After mining the Bitcoins, the contributors receive rewards based on their contributions.
Pay Per Share Mining Pool
For mining in this category, you need to find a block; instead, these pools generate instant payouts.
Peer to Peer Mining Pool
Peer to peer mining is done so that miners can prevent the mining process from being centralized. This type of mining is done mainly by the older players in the crypto industry.
Only 21 million Bitcoins can ever be mined. For mining Bitcoins, your computer needs to solve very complicated mathematical equations. Thus, to mine bitcoin code, you need to have a very powerful computer that can solve complicated mathematical equations very easily.