Excerpt
I walk you through the first steps of getting started with Bitcoin mining. Learn about the necessary hardware, hashing, and mining pools, as well as the costs involved. I also give you a brief overview of the key concepts like proof of work and the competitive nature of mining. Watch to find out how you can begin your Bitcoin mining journey!
Transcript
The first thing you need to understand and learn are the basics of Bitcoin if you don’t already know them. Learn what Bitcoin is, what its purpose is, as a decentralized digital money. Understand its key principles, which are decentralization, transparency and immutability. Because these are the factors where mining plays a role. Then learn about the Bitcoin blockchain. See how the blockchain works as a shared ledger that records transactions. Learn how transactions are grouped into blocks and linked with cryptographic hashes. Especially look into what is a UTXO. So how does Bitcoin track all balances and transactions and the amounts of transactions? I have videos on that on my YouTube channel. So for instance, to understand the purpose of mining, what it contributes to decentralization and the security of the network. And to learn what a blockchain actually is and what the mining machines are doing, I’ve got videos where I show how the cryptographic functions connect blocks and transactions with each other. The video is called What is a Blockchain? And you can find it on YouTube. The next thing is, you have to understand the basics of cryptography. Understand how hashing works. What’s the algorithm that is used in mining? You have to understand public and private keys that secure Bitcoin transactions. I also have a video that’s called How Bitcoin’s cryptography secures your ownership where I show you how mined blocks look like. So these are all factors that you need to understand if you want to learn what Bitcoin mining is and then maybe even start mining Bitcoin. Then of course, what is proof of work? Explore how proof of work secures the Bitcoin network and why miners compete to add blocks. An area of focus is the difficulty adjustment. What is it? What does it do? What are the incentives for mining? Then there are different mining tools. There is different hardware and software that you need. Like mining hardware are specialized computers. They are called ASICs. They are only built to mine Bitcoin blocks. And then of course, it’s a topic that is very, very depending on profit margins. And so you need to understand the costs of mining because there’s a lot of cost in electricity and hardware. And you need to know how to calculate potential profits. Then there are mining pools. What are mining pools? And you can see like one mining device that is basically performance wise on a current level cost you between 3,000 and 14,000 US dollars, which is quite an investment. And you need hundreds of it to be competitive in the mining race. And then if you really want to start, yeah, try devices like BitAxe for instance, or a Nerdminer, or a second hand machine for hands on learning. It’s not easy. But if you’re interested in it, of course you can learn it and master it. And all of these topics, if you walk through the course, you will learn about it. And we will add more and more videos to the website that you can search for topics then. And so I encourage you to learn about that. You can’t learn this in one go. It’s not possible. People need years to understand what Bitcoin mining is. And mining itself is, as I said before, a very, very competitive business.