How to mine bitcoin: Guide to mining at home | Personal Finance | Finance

prices soaring over the course of 2017, potential investors are once again eyeing their option of jumping the bitcoin bandwagon in the new year.

If you are sitting on the fence about joining the crypto community, you are faced with two options.

You can either buy bitcoin for around £10,000 ($14,000) a token, or you could try and mine it.

But before you go ahead be aware that they halcyon days of bitcoin mining are over and the process to successfully find tokens is getting harder everyday.

1. Get a bitcoin wallet for your tokens 

The very first thing you need to do is secure a public bitcoin wallet address and a private key password. Remember that all bitcoin transaction are publicly visible on the blockchain, but just like your bank account, your wallet is yours and yours only to see.

There are four options available to you. You can choose an online service to store your tokens, run a wallet locally on your computer, on your smartphone or buy a physical wallet similar to a hard drive or USB stick.

Bitcoin wallets give you full control over your tokens and keep them safe and secure in the event that a crypto exchange is hacked or goes bust. You should never store your coins on an exchange.

There are several different pros and cons to the different types of wallets, so bear that in mind when you make you choice. Bitcoin.org has a good breakdown of the various choices you can make.

2. Get a powerful bitcoin mining rig

Each bitcoin in existence is mined from a data set or block of intense calculations on the bitcoin network. Every time a block is successfully mined, a handful of around 12.5 bitcoin is handed out to miners as a reward.

The blocks are broken down by power-hungry ASIC mining rigs – specialist computers built for the sole purpose of mining bitcoin.

Just a few years ago this would have been possible with nothing more than a desktop computer or a graphics card (GPU), but the difficulty of mining bitcoin increases every four years or so, with the rewards for successful mining decreasing as well.

, and the mining process is already slowing down.

Buying a mining rig can be a costly venture and with the current difficulty of mining it might not always be a cost effective method for everyone. This bitcoin mining calculator will help you calculate the costs of buying a rig now and the potential returns you might see.

3. Find a good bitcoin mining pool

Once you have set up your brand new mining…

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