Bitcoin Mining!

Hey guys!

Lately, I have been researching Bitcoin. Bitcoin is a cyber currency, which is  currency with no physical form. One Bitcoin is worth about £170 ($250). There are two ways that you can acquire Bitcoins, either a) buying them from a trader or b) mining them yourself. I went down the route of mining and here's how i did it:

Mining

Mining is how bitcoins are found - you set a computer or ASIC (Application Specific Integrated Circuit) up to constantly do the same set of sums, just with different numbers, and occasionally it will find a block (a group of 25 bitcoins). It is possible to mine either on your own, or in a bitcoin "pool". A pool is a group of people working together to mine bitcoins, and when a block is found, they divide the winnings up, dependent on their hashrate (The speed at which your device can do sums).

So first, i needed to set up a wallet. a wallet is the program that you can connect to, stored on your computer in the web, or other outside sources. I chose Coinbase, as it is very popular, but also is web-based, so even if your computer gets hacked or stolen, your money is still safe. I was a bit worried, as it asked for ID, but it is because, technically, your'e opening a bank account, so they need to make sure your'e you. 

I then had to decide, solo or pool mining? I decided pool, as solo mining is a) very hard to set up and b) extremely unlikely that you'll find any bitcoins. I chose to go with Bitcoin Affiliate Network, as they have 0%PPS (For every block found, they take none of the bitcoins, giving them all away) They also have a very high hashrate (~4Ph/S) So they pay out frequently, but you only get a small percentage of the money.

I found out, after creating an account with BAN, that they only accepted ASIC miners. I was a bit stuck, but then received one from a friend to borrow. It is only a USB Block erupter, providing only 1 Gh/S, but it is something to try. I st it up, the drivers were fairly quick to install, and then had to get my mining software. I used bfgMiner on my computer, as it was fairly simple to install, and then created a quick batch file to start up the miner. This is the bfgminer console:

I have been getting a strange "saw-tooth" pattern in my hashing power>>>

I calculated that with this miner, it would take 100 days to even make enough bitcoins for it to even PAY OUT! (0.0002 btc - approx. 4p (6 cents) )

This miner showed an average of about 1Gh/S, but i still had to have my computer on, that drew a lot of power, being very inefficient. That's that for this post, but I will be posting another post about the workings of Bitcoin, such as the block chain and how transactions work.

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