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What is Bitcoin and how do you mine it?

By Jim Martin | Dec. 5, 2017
Bitcoin now out-values gold many times over. We explain what is Bitcoin and how you can earn the virtual currency on your PC or laptop.

 

Get started with Bitcoin mining and generate your own bitcoins

Let's say you try and mine a block of bitcoins with just one home PC. This is a bad idea: the electricity costs will be higher than the money you make from any mined bitcoins and you may have to wait months - or longer - before you get any return. By joining a pool, you should get smaller payments more regularly.

However, you could still end up out of pocket even if you join a pool such as Slush’s Bitcoin pool – one of the most popular ones. When a block is completed, you get a share based on the number of other ‘workers’ who helped mine the block. A fee – around 2 percent – will be deducted from this, and you could well earn only half the amount you’ve spent in electricity costs.

Of course, if you’re able to run the mining software on a computer for which you don’t pay the electricity bill, you might be quids in (but we don’t recommend running it on your work PC!). If you want to mine Bitcoin on a Mac, on the other hand, bear in mind the advice of our colleagues at Macworld: How to mine Bitcoin on Mac.

So, if you’re still interested, here’s a simple step-by step guide to getting started with Bitcoin mining:

Step 1. You’ll need a ‘wallet’ to start with. This is a bit like a PayPal account where your bitcoins can be stored. You can store this wallet online, or locally on your PC. You’ll need to download a large ‘blockchain file’ to use a wallet. For an online wallet, you might like to try coinbase.com. With a coinbase account, you can buy, use and accept Bitcoin currency.

Step 2. Join a pool, such as Slush’s Bitcoin pool. There’s always a danger that the pool owner might keep all 25 bitcoins when a block is mined, since the whole 25 coins are paid to one person: the pool owner.

You’ll need to choose a trustworthy pool owner. Slush’s pool was the first and has been operating since December 2010. By the site’s own words, it has a “a long history of stable and accurate payouts”.

Step 3. Install a Bitcoin ‘miner’ on your PC. There are two types: CPU and GPU. For beginners, Kiv's GUI miner is recommended. You can find out more about how to use Kiv's GUI miner here. 

Step 4. Log into your Bitcoin pool account, and enter your wallet address. You will be able to get this by checking your wallet account which you created in step 1.

 

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