How do I mine Bitcoin?

An introduction to cryptocurrency mining:

When a computer is mining, it’s basically performing calculations to verify transactions in the network. watch this video for a simple explanation.

Few people know why mining bitcoins has not been the same in the past years.

At first, everyone was able to mine bitcoins on their own, on every pc or laptop. This was only possible because the group of people mining was still very small. Miners used their central processing unit (CPU) to mine, but this was not very power efficient and bogged down the system resources of the host computer. As bitcoin received more attention and more people started mining them, the difficulty started to rise. Miners then moved on to using the graphical processing unit (GPU) in computer graphics cards as they were able to hash data much faster than CPU’s, around 50x to 100x, and this required less power. Eventually, the Bitcoin mining industry recognized the need for special equipment and this led to the development of field-programmable gate arrays (FPGA’s). These FPGA’s were specialized machines that repurposed existing technology and attached to computers using a USB connection while using much less power during mining than GPU’s and helped to free up system resources on their host computers.

asic chip/miner

Today, application-specific integrated circuit (ASIC) miners, specifically designed for the sole purpose of mining on the bitcoin network, are the new wave in the evolution of mining Bitcoin. These ASIC machines mine at unprecedented speeds, from 5GH/s to 1,500 GH/s, while consuming much less power than FPGA or GPU mining rigs, but are only available from a few manufacturers such as Butterfly Labs and Avalon at this time. And they usually cost more then the worth they produce in bitcoin.

please understand that we at Coinstreet don’t mine bitcoins or other cryptocurrency! Cryptocurrency mining is a business and a very competitive one. We are traders not miners…

Mining difficulty explained:

The difficulty rises each time the total network power increases. At this moment it has become too difficult to mine 1 bitcoin on your home computer, even if you mine for a whole year. You can understand why the difficulty is a very important aspect of mining.

“In more detail; the difficulty is variable and reacts to the total network mining speed to ensure a steady release of freshly mined coins.”

This prevents all the coins “in the ground” from being found at once and assures a steady release of coins on the market to protect its value.In the last years, bitcoin has developed a very high difficulty, meaning it takes a very high amount of guesses being done for a long period of time to find a block on your own.

other cryptocurrency

Currently (at the time of writing), we have a difficulty  of 460,769,358,091 for mining Bitcoin. When we compare Bitcoin with a stable altcoin such as Litecoin; we can see that Litecoin currently has a mining difficulty of 88,482 way below the difficulty of Bitcoin.

Basically the altcoins are still behind Bitcoin in their adoption curve. Just like Bitcoin had to grow popularity and gain trust from the people understanding the system, the altcoins follow that same path. When enough people are buying, trading and mining a particular coin, its value rises with the rise in use. This is what happened to Bitcoin, but over a longer period of time.

Interestingly, almost all of the altcoins have some intrinsic value. Many altcoins present a twist, a few examples;

  • Litecoin; the very first scrypt coin, already reaching a value of $25 for each coin.
  • Monero; Truly anonymous coin. Holders can’t be tracked.
  • Ethereum; Programmable, able to build apps on top of the blockchain.

Currently there are really a lot of coins to choose from, most with their own community backing them. You can have a look at the list with altcoins and their features here I’m sure many more will come rising, some create clever, unigue extra features, some are just in it for the fun.

Mining guide:

This guide is for Windows use with AMD video cards.

Getting ready:

After installation, run MSI afterburner. It will ask for a reboot for proper detection of your hardware, click yes.

We are going to change a setting with MSI afterburner to prevent the system turning off the video card when it’s mining.

To do this; open MSI Afterburner, hit ‘settings’ at the right bottom corner and set a mark in the checkbox next to ‘Disable ULPS’ and set Unofficial overclocking mode to ‘without powerplay support’. Click Ok, Afterburner will ask for a reboot, do this now.

Next, we are going to prevent windows from turning the computer to sleep when its mining, we do not want it to go to sleep when we do, we want it to mine more coins.
click start, control panel, power options, and choose ‘change plan settings’.

Look for the box ‘put the computer to sleep’ and select ‘Never’.

Start mining:

Now we are ready to get the miner program.

We have created a set of 2 required programs with a configuration file so you can easily get started.

Click here to download the package.

Save the zip file to your C:\ drive and extract the zip file on C:\.

Do not put it in a folder, just in C:\.

“It’s possible (and in general a good sign) when you hear the fans in your computer spin up and get louder as you leave the miner program running for longer periods of time. Do not worry when you hear this, this is the graphics card heating up as its working full-time.”

Now we’re ready to mine!

Click the CG Watcher icon. The mining software will start.

To start mining, click the ‘Start mining’ button.

Now you should see cgminer start up and display a lot of information.

Have a look at your HW (hardware) errors first, we want to keep this value on 0 at all times. If there is any value but 0 after HW, you want to stop the test; you can quit by pressing ‘q’.

Next, check your GPU temperature and make sure it stays below 85 for now. We have already set your fan to automatically speed up in the configuration file.

If the gpu temperature still exceeds 86 degrees, we recommend stopping the test to look for ways to improve ventilation in your case. If the temperature in the case did exceed 86 degrees; consider turning the fan higher manually. You can do this while running cgminer and pressing ‘g’ to change gpu settings, then ‘f’ to select the fan setting, next enter the percentage you want the fan to run on and hit enter. You should see the current speed on screen, use that as a reference.

Now we should be able to increase the hash rate greatly by changing settings.

Start by increasing the intensity value, this is the effort at which your video card is putting in work.

To do this;

Click in the cgminer screen, hit the letter ‘g’ on your keyboard to go to the gpu settings. Then hit ‘i’ to change the intensity. Then fill in ’10’ and press enter. You should see the ‘I’ on the right go from 8 (the minimum) to 10. Observe your hash rate, it should rise to a higher level, make sure Hardware errors stays at 0. Try and find the intensity that gives you the highest hash rate while keeping Hardware errors at 0.

That’s it!

Your computer is now a miner, assisting the network by verifying transactions.

“In this guide we have been mining on the account, but you probably want to mine your own coins. Furthermore, there are a lot more settings to tweak than just the intensity. This will make your video card perform much better, which in turn gives you more coins for the power it uses.”

If you want to mine your own coins you will need a wallet. After creating the wallet you can start getting coins by mining right away.