Bitcoin may be down from its all-time highs, but the world’s first (and most famous) cryptocurrency is still making headlines throughout the tech and financial sectors.
It has never been easier for the Bitcoin beginner to purchase and store this digital asset from various third-party platforms and peer-to-peer marketplaces. But what if you want to acquire Bitcoin from the source via mining? That takes a bit more planning and strategy.
Yes, you can mine Bitcoin and profit over time, but you need the right knowledge, technology, and willingness to take on some risk. Here’s your beginner guide to Bitcoin mining with a few proven tactics from the pros.
Understanding Bitcoin Mining
Your mining journey starts with learning about Bitcoin and blockchain technology at large. It would take a lifetime to understand the technology in full, but let’s focus on a few key concepts to get started.
First, think of a blockchain as a secure, decentralized database of information. Bitcoin is one example of this technology, boasting security, anonymity, and resistance to fraud or inflation.
Next, consider that every “block” on the blockchain must be created by completing complex cryptographic functions called hashes. If you have the computing power to solve these hashes, you’re rewarded with Proof of Work certification and earn Bitcoin.
This ongoing computing and blockchain development cycle make Bitcoin so secure and robust. Your goal with Bitcoin mining is to maximize the output and efficiency of your system to earn the highest possible yield while remaining profitable over time.
Get Started Mining: Three Techniques
It’s a lot to take in, but the concept of Bitcoin mining is elegant at its core. From a practical standpoint, you need to coordinate computing power and dedicate those resources to mining Bitcoin and “stack sats” for big gains.
Luckily, there are three distinct ways to start mining Bitcoin based on your level of expertise, risk tolerance, and the resources you’re willing to put forward. Here are the three methods we recommend and the pros and cons of each.
DIY Mining (At Home)
For the intrepid do-it-yourself-ers out there, at-home Bitcoin mining offers maximum transparency and control over your resources. You can design and execute a mining “rig” that earns BItcoin 24/7, whether it’s a gaming computer, ASIC unit, or combination thereof.
Don’t expect enormous profits from this mining style, as it’s more of a hobby than a true money-maker. However, it’s the best way to learn the intricacies of Bitcoin mining and store some satoshis in the comfort of your home.
Cloud Mining
Want a more hands-off, passive approach to mining Bitcoin? Cloud mining options are abundant nowadays, allowing you to pay a monthly subscription and receive your share of Bitcoin from a professionally maintained operation.
Cloud mining doesn’t offer the transparency or customization of DIY, but it’s also way less work, with fewer risk vectors. Just be sure to perform plenty of due diligence before signing on with a cloud mining plan.
Enterprise Mining
When you’re ready to take your Bitcoin mining hobby to the next level, consider upgrading to an enterprise-grade operation. This requires investment in technology, real estate, maintenance costs, marketing, and more. But with more risk comes far greater reward.
Only pursue the enterprise mining route if you deeply understand the tech and firm convictions about the future of Bitcoin’s upside.
Mindset and Strategy: Four Tips
Four mindset tips will serve you well on your journey no matter how you approach Bitcoin mining. Adopt these, and you will benefit most from Bitcoin mining moving forward.
1. Think Long Term
Don’t get distressed about short-term dips in the crypto market, and conversely, avoid celebrating early when prices rise. You’re in this for the long haul, which means thinking on a broader time horizon with all emotions aside.
2. Look Beyond Bitcoin
Bitcoin gets the news headlines and hype, but it’s not the only crypto asset in town. Check out altcoins like Ethereum, Solana, and others to increase your investment exposure and enjoy all the market offers.
3. Mix and Match Technologies
You’re in control of your Bitcoin mining strategy, which means fine-tuning your strategy and technologies to your liking.
Maybe you go 60/40 on cloud computing and at-home DIY. Perhaps you’re fully invested in an enterprise game plan from the jump. Only you can decide your path.
4. Be Smart About Storage
Protecting your Bitcoin is nearly as necessary as how you mine it. Third-party platforms offer convenience but at the cost of security and assurance.
Look into cold-storage solutions that keep your Bitcoin 100% protected and in your guardianship.
The Future of Bitcoin Mining
Bitcoin has only been in the spotlight for a few years, so we’re just getting started! It’s the perfect time to start mining and reap the benefits of this powerful technology.
