How are Bitcoins generated? – The complete process of setting up a miner

Bitcoin is the first digital cryptocurrency based on the blockchain technology. Initiated in the year 2009 by an anonymous group of people who named themselves as Satoshi Nakamoto. The identity of its creators is still anonymous. This might be to show the world a complete decentralization also on the other hand in some of the other ways to prevents the legal implications.

The decentralized cryptocurrency has given a major blow to all the financial institutions as more and more number of people have started to adopt the cryptocurrencies into their day to day transactions. So how are bitcoins generated? They are generated or created by a process called mining which requires a very complex mathematics. Let us understand how actually Bitcoin mining is done. There are basically two ways to mine Bitcoin one is Bitcoin mining personally and another one is joining a Bitcoin mining pool. Let us see how you generate Bitcoin personally.

Step 1: Get a custom hardware and power supply

During the initial days of the Bitcoin they were effectively mind on any normal computers but as the number of Bitcoin users have increased over time it has become almost impossible to mine Bitcoins on a normal computer hence Application Specific Integrated Circuits are required to mine them. There are three factors which is to be considered while buying an ASIC.

1. • Hashing power:

This shows how many hashes the ASIC miners is capable of processing per second. More expensive miners have greater hashing power

1. • Efficiency:

It is the ratio of how much the minor give the output with respect to the input. Here the output can be referred to as Bitcoins and input can be referred to as electricity.

1. • Cost:

Some of the most basic Miners these days can cost around $1000 to $5000.

Along with purchasing the hardware we also need to purchase the power supply compatible with it. Some of the most common power supplies given an output of 15 to 20 amps.

Step 2: Obtain a Bitcoin wallet and secure it

Bitcoin wallets are the digital wallets which are used to store your Bitcoins. They can either be online wallets or local wallets. Online wallets are the one which is provided by an organization and is mostly not secure because the wallet tampers if anything bad happens at their end. The local wallet is the storage of coins on a particular device like pen drive is the storage of coins on a particular device like a pen drive.

We can even get the wallets in the form of mobile applications which do not require to download the whole the whole blockchain. If the wallet is lost all your Bitcoins stored in it is lost. So in order to protect your wallet keep your desktop offline or it is preferred that the wallet is backed up in a pen drive.

Step 3: Pick a mining pool

A number of cloud mining pools will invite you to join them. The basically charge a certain amount of Bitcoin for themselves for this facility because it increases our chance of getting a bitcoin. It is very important to join the most trusted and popular cloud mining pool for better returns.

Make the connections and boot the ASIC miner.

After getting all the hardware, obtaining a wallet and joining a cloud mining pool the next thing we must do is make the connections from the power supply to the miner. The power supply has a number of cords attached to it attach all the respective cords to the ASIC miner. Then make connections between the ASIC Miner and the router by using the ethernet cable.

Then the ASIC miner must be booted in order to switch it on simply flip the on/off switch after connecting the power supply to it. It generally takes about 10 minutes to boot it.

Step 4: Start the mining

Find the IP address of the ASIC miner from the router admin page of your router and then come the ASIC miner homepage in order to make the miner mine for you. While logging in into the ASIC miner the first time check for the user’s manual for the default username and password. Now change the miner configuration setting by entering the URL, username, and password which you received on joining a cloud mining pool. Click on save&apply, and the miner is mining for you now.

Now, the ASIC is extensively working in order to bring in some Bitcoins for you huch are automatically added to your wallet.