Bitcoin Mining on a Budget

Mining cryptcurrencies has become an infatuation ever since the market exploded earlier in late 2017. As evidenced by the GPU market, the trend is continuing with no end in sight, and with good reason too. Mining can be a fun thing, I mean you're earning money essentially out of thin air, right? Well, thanks to blockchain technology (and the price people are willing to pay to invest in it), for the miner this seems to be the case. I'll get into how the technology works later, but for the most part, you sit and wait for Bitcoins to arrive in your virtual wallet while utilizing the power of your graphics card.

Here's how it works:

1.) Bitcoin was created by "Satoshi Nakamoto" in 2008. Basically, the entirely hypothetical currency relies on a technology utilizing the power of the Blockchain, in essence, a ledger which cannot be altered providing a decentralized, secure way to conduct transactions anonymously. (Read his paper here: https://bitcoin.org/bitcoin.pdf)

2.) The Blockchain relies on "Miners" to process transactions and record these in a ledger. They provide computational power (lots of it!) to secure each block in the chain to lock the transactions with a key rendering that block locked and unable to be altered. The entire Blockchain is available to everyone across the network, meaning blocks cannot be changed unnoticed.

3.) Bitcoins themselves enter the market by means of "mining" a block, or solving the algorithm that locks the block. The miner receives the reward in their own wallet and can either use it themselves or sell it on a market (like https://Coinbase.com) in which investors trade their own currency, i.e. USD, into Bitcoin. There is a set limit of 22 million Bitcoins which can be rewarded for mining blocks in total, and the reward per block decreases incrementally over time.

4.) Due to the massive amount of computational power needed to mine a single block, miners combine their hashing power into pools, which distribute the reward from blocks mined by how much work each individual worker contributed. Pools generally have a small fee (in the area of 1-2%) but are extremely practical for those with less power (us budget miners).

5.) Wait

The process itself is extremely time consuming. Mining on a budget earns superbly minuscule amounts of money, but its still something. It's not all about the money, either. Providing the framework for a revolutionary new technology which is threatening governments (see India and Korea) is something exciting to be apart of. Not to mention the fact that this rewards the worker in a tangible way. Whatever the reason, you came here to learn about how you can get started, so here we go.

What you'll need:

-A computer
-Internet & electricity
-Patience

That's it! Now of course the hardware you have is going to determine a lot, but hypothetically mining is possible with nearly any CPU or GPU.

How to Begin:

This parts a bit more complicated......

First, we need to take stock of our hardware. Because this is a budget build, our scale and quality will most likely be small, but theres still a profit in even the most minuscule hardware. You may have anywhere from a Gtx 750ti up to a Gtx 1060, which can earn you up to about $2.50 per day. This may not sound like much, but per month that's $70. Not too shabby! Heres a quick table of estimated earnings (in equihash hashes/second) of a few budget cards.

With your hardware in mind, its time to decide what exactly we want to mine. There are thousands of different cryptocurrencies around now, but Bitcoin, Ethereum, Monero, and ZCash are some of the most popular choices. After a quick search online, you can find which coin is best for your setup (https://whattomine.com). Nicehash, which I use personally, is a very convenient alternative to dedicated mining, but accomplishes the same purpose. Nicehash takes stock of available hardware and automatically tells the system what coin to mine. It converts all proceeds into Bitcoin and pays you as such.

The software itself has a very clean interface and is relatively simple to use. For the purposes of a budget build it will work very well. You can download Nicehash from the website at https://miner.nicehash.com.

To actually get started mining is very simple. Once Nicehash downloads, and you have setup an online wallet (I suggest either Coinbase or Nicehash) run the program and select your hardware to benchmark. This will run several different mining algorithms over the course of (usually) half an hour to determine the best configuration of your hardware that is most profitable. Once the system determines the most efficient coin to mine, the next step is to click "Start" and thats it! The program will run hashes for whichever coin it decided, and your balance will slowly begin to accrue in the form of Bitcoin, which will be paid to your wallet. You'll have to mine at least .001 Bitcoin for them to make a transfer into your wallet from the miner, and this generally takes anywhere from a couple of days to a week. Whichever the case, you now have a steady stream of your very own Bitcoins! From here, you can decide to do one of 2 things:

1. Send your Bitcoin from your wallet to an exchange, and convert your Bitcoin into USD via a deposit into your bank account. This process will take several days, but the price of Bitcoin at the moment you sell will determine the amount heading to your bank account, so you won't have to worry about the volatility of the market after your transfer.

2. Keep your hard earned Bitcoin in your Nicehash wallet and use the ever growing currency to make purchases. More and more retailers are beginning to use this form of payment, so holding onto it for use may not be a bad option. Stores such as Newegg, Expedia, and even Subway are now accepting the digital currency.

This pretty much sums up everything you need to know to start that budget build of yours, so have at it! I hope you all find this useful!