To fully explain Bitcoin Mining would be technical article most people would not get in the end anyway. So what I will attempt to do here in this article is two things. First give you a basic idea of what Bitcoin Mining is, and then explain very simple way to do it on a Microsoft Windows or Linux. If you own a Mac, buy actual computer that is not a toy.
This is a simple, non technical, detailed explanation that you can get started with right now:
If what you are looking for is more technical explanation, but still fairly easy to understand, they have it at https://en.bitcoin.it/wiki/Mining
Bitcoin Mining is similar to mining gold, except that product is digital and not physical. Both gold and Bitcoin only have value because people give them value. Both gold and Bitcoin become harder to obtain when more people mine them.
Early adopters always have easiest time to turn a profit. When Bitcoin was started, those who mined it first made it quickly and easily. So easily that when people like me started joining in year later, ones before us were giving us tons of free ones just to motivate us to play. As time went on and more Bitcoins got mined, as more and more people started mining, it became far more difficult to mine them. In all honesty, if you were to try to solo mine today in one of wealthier countries, you will LOSE money by trying to mine Bitcoins unless you are running your own custom built rigs that use minimal electricity, simply because of how much electricity it takes. So only easy way to still turn profit is to mine in ‘pools’.
Mining pools are similar to car pools. In a car pool several people take turns driving to/from work rest of the group (or groups kids to school, or something similar) which saves them overall time and money wasted as compared to all of them driving their own vehicles. In Bitcoin mining pool everybody involved pools computer resources to find Bitcoins (which is really solving complex mathematical equations, but nevermind that). In a way its really similar to gambling at a completely random game of chance.
Program I found easiest for total newbies is Open Source graphic program by Chris ‘Kiv’ MacLeod called guiminer.
Repository is on GitHub: https://github.com/Kiv/poclbm
71 page forum thread where I found out about this program is here: https://bitcointalk.org/?topic=3878.0
You need two programs:
1. You need a Bitcoin wallet. You can use online one, but I do not trust them, and I choose to use Electrum. Its 100% free, its small and you can get portable version.
2. You need a mining program of your choosing. For this article, guiminer (self extracting archive, direct link), but once you get your feet wet and get better grasp, I suggest you try various ones and see if you perhaps prefer something else.
3. I also suggest you join a mining pool instead of trying to mine solo. I suggest Slush’s Pool located at https://mining.bitcoin.cz/. If you insist on mining solo, you will need to download full Bitcoin client (thats at least few Gigabytes, and I havent done that in over a year, so might be really large by now) and set up set 4 under ‘Solo Utilities’ in guiminer.
4. Extract guiminer anywhere you like. Run guiminer.exe. You will see its set by default to Slush’s Pool, if you chose one of other few dozen pools that it has in dropdown menu, just set it to one of your choosing. If you want to start with pool not listed, you do so at your own risk and instructions are in that 71 page forum thread I linked.
5. Enter your username and your password and click Start Mining.
Congratulations, that is all there is to it. Happy mining.
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