Bitcoin mining has been gaining a lot of traction, it is a great way to earn Bitcoin. There are a lot of Bitcoin millionaires who have made their money from Bitcoin mining. This is a step by step guide on how to mine Bitcoin in South Africa.
What is Bitcoin mining?
Traditional banks are centralized, they keep a ledger of all accounts and transactions. Let’s say you want to transfer money from your account to another person’s accounts. The bank transfers the money and makes an update on the ledger. This makes it difficult to use counterfeit money or spend the money twice.
Bitcoin is completely decentralized, there is no single institution or government that oversees this process. This is where Bitcoin miners come in, they act as a ledger for all transactions that are made with Bitcoin. This ledger is made public and is accessible to everyone.
Banks keep their ledger private; the Bitcoin ledger has to be validated by millions of miners before it can be accepted. All this is done within a few seconds, this solves the problem of double spending or fraud. As a Bitcoin miner, you will participate in growing the Bitcoin ledger. As a reward, you will receive free Bitcoins.
How does Bitcoin mining work?
Aside from acting as a ledger, you will be required to perform extremely difficult mathematical calculations. These calculations are done by your computer and the computer that cracks the puzzle first receives free Bitcoins. The number of Bitcoins that you receive is currently 6.25 (2020), it started off as 50 and it halves every 4 years.
There is a total of 21 million Bitcoins, about 18 million Bitcoins have been mined so far and the last one won’t be mined until 2140. Bitcoin mining is not easy and gets more difficult with every year that passes. The only way the remaining Bitcoins can come into existence is if they are mined. 1 Bitcoin is currently worth R233 000.
How to mine Bitcoin in South Africa
1. Buy hardware
Not long ago, people could use their laptop’ CPU or graphics card to mine for Bitcoin. That’s not the case anymore, you need specialized equipment to mine Bitcoin.
Bitcoin is designed in such a way that the more computing power the network has, the more difficult it gets to solve the puzzle. You are competing with data centres that have been set up specifically to mine to Bitcoin, also known as Bitcoin farms.
You need an Asic miner, which is a machine that is specifically designed to mine Bitcoins, it does nothing else. You can get one from as little as R2 500.
2. Get a bitcoin mining software
You need Bitcoin mining software to connect into the Bitcoin network, there are a lot of free Bitcoin mining software. CGMINER is considered to be the best Bitcoin mining software. It works with graphics cards, CPUs and Asic miners. It runs on most operating systems like Windows, Linux and Mac.
3. Set up a Bitcoin wallet
A bitcoin wallet is a digital wallet that you use for storing your Bitcoins. It keeps track of all the Bitcoins that you have and it’s how you will receive new Bitcoins and it also allows you to send Bitcoins to other people.
4. Join a Bitcoin mining pool
Chances that you will successfully mine Bitcoin on your own are little to none. You might fail to mine Bitcoin for the whole year. A Bitcoin mining pool joins processing power from different miners. A lot of Bitcoin is mined by pools.
You as an individual will be competing against multimillion-rand Bitcoin farms. There is little to no chance that you would beat them. A Bitcoin mining pool allows you to contribute your resources to the pool so that you can compete. Bitcoin is split proportionately among miners in the pool. This is a great way to earn Bitcoin.
Conclusion
Bitcoin mining is very difficult and it consumes a lot of power, you need electricity and advanced equipment. There is a chance that you might not break eve at all, however, we assume that the price of Bitcoin will go up over time, it might be good if you are working for the long term. Do you have any thoughts or questions? Comment below.
