No, we’re not talking about heading into a cave with a pickaxe and a hardhat—we’re talking about Bitcoin mining, one of the first ways to ever obtain BTC. This is the process in which miners use powerful computers to solve complex mathematical problems. When they crack the code, they’re rewarded with newly-minted BTC. It’s basically a race to see who can solve the block the fastest and those lucky enough to do so reap the rewards.
Back in the day, mining wasn’t as complicated. Some of the earliest miners were able to mine thousands of BTC using just their home computers. Now, it’s a very different scenario. To mine in today’s BTC scene, you’ll need top-tier equipment—which can set you back a few thousand bucks. Also, since Bitcoin has made a name for itself now, you’ll have a lot of competition.
To give yourself a fighting chance, you can join Bitcoin mining pools or mining clouds. A Bitcoin mining pool is a collaborative group of miners who combine their computing power to solve complex mathematical problems faster. A Bitcoin mining cloud is similar, but instead, they use the cloud to connect their computing power. That way, they won’t have to install and run the hardware and related software directly. In either case, the miners’ fees paid from transactions and the newly-minted coin are split among the people in the group.
As the competition gets fiercer, the better equipment you’ll need to profit. And as you spend more on equipment, your profit margin decreases. As a result, Bitcoin mining isn’t as profitable as it used to be. Do plenty of research before getting into mining because:
There are plenty of easier ways to earn money with Bitcoin.