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How to start mining cryptocurrency

How to start mining cryptocurrency
« on: 26 July , 2019, 16:17:28 pm »
Good morning everyone,

I have opened this topic to show you how to start mining bitcoins (and why you shouldn’t). There are several steps you should follow to win the block reward which is nowadays 12,5BTC. Before you start reading these instructions you should know what mining bitcoins is and why it is so important for the Blockchain development. Here you have a video summarizing all this information.

Firstly, and most important of all, you need a specialized hardware to mine bitcoins. In the beginning, everyone could mine Bitcoins with their phones or CPU, however this was when it was an unknown technology that only a few people used. Nowadays there are companies which are only dedicated to create hardware that allows people to get cryptocurrency. For example, ASICs (https://en.bitcoin.it/wiki/ASIC). These devices make the process easier and more affordable, nevertheless, they consume a lot of electricity and consequently a huge amount of pollution. This is one of the reasons why you should never try to mine bitcoins alone (I will explain what mining pools are later).
Secondly, you have to choose and download a mining software which carries out the task of finding the nonce and closing the block. Some of the most popular software are:
  • CGminer
  • BFGminer
The next step is optional, however is advisable to do it. You should join a mining pool, a group of miners which unite their computational power to mine bitcoins faster. In the end, when they get the reward, they divide it among the different members of the pool. Some well-known pools are:
  • SlushPool
  • AntPool
  • F2 Pool
Finally, you must create a bitcoin wallet which allows your bitcoins to be stored safely. The wallets use cryptography and keys to ensure their content. Here we have some popular wallets:
  • Copay
  • Airbitz
  • Armory
  • Bitcoin Core
I hope you can learn from this; I will try to answer any doubt if you have any.
Best regards,
Manuel Cortés (Spain)

Re: How to start mining cryptocurrency
« Reply #1 on: 26 July , 2019, 20:43:15 pm »
Hi everyone,

Manuel has already explained us very well how to mine bitcoins, but is this the only thing we can do to get them?

For some strange reasons, people tend to think that because Bitcoin is a new form of currency, there is some magical way you can earn it or make money from it easily. I am sorry to burst that bubble, but Bitcoin is just like any other currency out there. Just like there is no easy, risk free way to make a quick buck, there is no magical way to earn Bitcoin.

While cryptocurrencies in general may hold some new possibilities for generating income the basics are the same; you will need to invest time, or money in order to make money.

One of the cheapest, easies but also most time consuming ways to earn Bitcoin is through micro earnings. This means that you will be doing some small tasks and earning fractions of a coin for the time you spend. Some of the more well-known micro earning sites are Bitcoin faucets; sites which you repeatedly visit every few minutes in order to claim a very small amount of coins. Faucets are actually a type of PTC (Pay to Click) websites. On this websites you usually have to click on an ad or on a button in order to make money from ad sales. In return, you will get a small amount of coins.
Also, as there is people who own this faucets, you can create your own. Nowadays, you can build a cryptocurrency faucet relatively easily and earn money from selling ads on your website.

Another way to get bitcoins is buying them to people who have them, this way requires contacting those people through forums, chats, and special websites called cryptocurrency exchanges.

Furthermore, you can also earn bitcoins though the offering services or selling products, as we in real life.

Finally, as Manuel explained, the last way to earn cryptocurrencies is by the creations of new blocks for the blockchain, the first person to create a new block gets a number of bitcoins, which happens every ten minutes, this is known as mining.

These processes can be done for a long time, but not all of them are unlimited. It is true that you will always be able to buy or spend bitcoins, but there will be a moment, when de production of bitcoins freezes, because at most there can only be 21 million units. It is believed that in 2040 all the mined blocks will be created and the production of bitcoins will stop.

I hope you find this information useful, if you know any other way to earn bitcoins, fell free to comment them here.

All the best,
David Corral Pazos

Re: How to start mining cryptocurrency
« Reply #2 on: 27 July , 2019, 20:58:23 pm »
Hi everyone,

As my partner has said, mining is not the only way to get bitcoins, there are more processes which allow us to win or even exchange this cryptocurrency. I will focus on the last-mentioned method, exchanging.

Bitcoin-exchange are online trading platforms which allow their users to either trade, buy, or use financial instruments in the Bitcoin markets (or any other cryptocurrency). We can find different types of trades such as fiat (euros, dollars…) to cryptocurrency, coin to coin and peer to peer exchanges. We can also distinguish three different types of exchanges:

Centralized exchanges: Centralized Crypto Exchanges (CCE) are trading platforms that function just like stock markets. A CCE is owned and controlled by an organization that maintains total control over all transactions. These are the ones which provide the most liquidity, and thus the most potential for profit. The most popular ones are Bybit (https://www.bybit.com/es-ES/), Binance (https://www.binance.com/es), Bitfinex (https://www.bitfinex.com/), and Coinbase (https://www.coinbase.com/).

Peer to peer exchanges:
allows traders to communicate and trade directly between themselves, however scams and other dishonest behaviors are frequent on these types of exchanges. Well-known peer to peer exchanges include: LocalBitcoins (https://localbitcoins.com/es/), CryptoBridge (https://crypto-bridge.org/)…

Decentralized exchanges: Decentralized exchanges or DEX are cryptocurrency exchanges which operate in a decentralized way, without a central authority. This type of trading method reduces the risk of theft from hacking of exchanges. However, they provide less liquidity and only offer basic features. Their transaction speeds are quite low but there are no trading fees and are anonymous.

Depending on your objective you can choose one or another but centralized exchanges are advised for the features and market depth they offer.

I hope you find this information useful, let me know if you have any doubt.

Best regards,
Manuel Cortés (Spain)