How to generate passive income through the Bitcoin mining process?
Mining Bitcoin requires extensive knowledge from computer hardware, TCP/IP networking and use of software. Sustainable mining is only possible if the following important variables are taken in to account.
Important factors to consider
Before you start mining Bitcoin, you should take notice of various important factors and concepts before starting. First you should consider the knowledge required to built the computer hardware needed, configure the hardware to actually do the work while maintaining oversight and monitoring the situation. The last thing you want is that your miner burns down due to overheating.
Fire prevention and electricity
Mining Bitcoin will put alot of strain on your computer hardware, over time deteriorating its performance and eventually breaking down. One needs to consider this issue, since otherwise you will not be able to replace your broken hardware. Another important factor to consider is fire security and air circulation. The hardware will contiously be used to its maximum performance, in turn resulting in heat creation. You should also try to model how many cryptocurrency you will reward and if these benefits outweight the costs of buying hardware, configuring hardware and the electricity consumption of the hardware.
Mining Bitcoin will require you to setup your device manually in most instances. In order to participate in the decentralized network of Bitcoin you will have to connect your device to the network using Bitcoin Core software and the right hardware setup. You could use a variety of hardware but on general ASIC’s are most efficient to mine new block and cost less energy per calculated block. Also keep in mind that the rewards you receive per calculated block will be lowered over time, possibly affecting your financial results.
Finding the sweet spot of your mining rig
The sweet spot refers to a performance / energy consumption rate. The more blocks you calculate per KWh of energy the more efficient your hardware operates and the more rewards you gain. You can easily reduce the amount of energy consumption of your hardware with 15 – 20% while only reducing the performance with around 12%. The sweet spot demands extensive monitoring from the administrator of the node and also requires you to change various parameters of the hardware.
Start mining and wait…
Once you have found the sweet spot of your hardware and the device is running stable without falsifying the work delivered to the network, you will be able to start mining efficently. Now its time to wait and gain those cryptocurrency rewards.
Want to know more?
Read my new book ‘On the Nature of Bitcoin’ and learn more about this topic. It is available in e-book and print on Amazon.com