|What is a Bitcoin farm?|
One of the best ways to earn Bitcoin is to mine it. Bitcoin miners receive 6.25 Bitcoins for mining each block. But the true winners were the ones who mined Bitcoin before this. Before January 2016, the reward of mining each block was 25 Bitcoins. This is while before 2012, bitcoin miners were rewarded 50 Bitcoins for mining each block. Currently, due to the risen difficulty of the mathematical equations, the difficulty of mining has risen but it’s still possible. In this article, we will discuss what is a Bitcoin farm and how it is created.
What is a Bitcoin farm?
A mining farm is a room or storage used to mine cryptocurrencies. A mining farm could be the basement of your house with two miners or a large storage with hundreds or thousands of miners working simultaneously.
Mining farms include massive power supplies, cooling fans to ease the cooling process, numerous mining rigs and several supervisors to manage the process. In fact, a mining farm is like a mining pool which includes all miners in a single structure.
Bitcoin farming is a simple concept, which can seem a little bit difficult if not explained properly. In essence, mining is the process of validating transactions to be added to the public ledger known as the blockchain. Transactions are added to blocks, and blocks are placed in the blockchain. The only thing that is needed to validate a transaction in Bitcoin’s network, is an advanced computer with access to the internet, a special software and the entire blockchain data.
The other purpose mining serves, is delivering new coins into the Bitcoin’s ecosystem. As mentioned earlier, each time a miner completes a block, 6.25 new Bitcoins are delivered to the system. Each block in Bitcoin’s network consists of 1400 transactions and has a volume of about 1 Megabyte.
How to build a Bitcoin farm
Mining process doesn’t only guarantee the security and integrity of the blockchain, but also it is very profitable for miners. If you add the transaction fees you receive to the nominal reward of validating each block (6.25 Bitcoins), you can turn mining into a full-time job. The tools you need to mine Bitcoin are listed below:
- Bitcoin wallet: a wallet could be used in different forms such as a mobile application, a hardware or a web application with a password to secure the stored assets.
- Mining software: Several software platforms which support your mining ASIC (Application-specific integrated circuit) are BTC miner and CG miner.
- Joining a mining pool: miners use computational power to complete Bitcoin blocks. When a Bitcoin block is completed, the corresponding reward is divided between the pool members.
- Using a special mining hardware: Nowadays, professional miners use ASICs for mining purposes. ASICs are powerful rigs, specially designed for cryptocurrency mining.
- A computer with internet connection.
- Power supply: to run a small mining farm, there needs to be a power supply of around 1,000 Kilowatthours per week.
- Cooling fan: mining rigs generate a massive amount of heat due to mining. To protect the equipment from the heat, there needs to be a cooling system which includes cooling fans.
One reason why professional miners don’t use CPUs and GPUs for mining, is the increased difficulty of mining. Bitcoin’s blockchain is developed in a way which every 10 minutes a new block is added to the blockchain. Therefore, mathematical equations which are solved now are much more difficult than those that were solved 5 years ago with simple CPUs and GPUs. Nowadays only special mining rigs known as ASICs can be utilized for efficient Bitcoin mining. ASICs are faster processors than ordinary personal computers. One ASIC consists of a special chip which solves mathematical puzzles with billions of hash rate. The hash rate of some ASICs even reaches trillions of hashes per second. Benefiting from a massive computation power, ASICs are the best hardware for mining Bitcoin, only as long as the mining difficulty hasn’t exceeded their power.
Bitcoin farm equipment uses a lot of power. The power that an ASIC uses per month can cost you about 150 U.S. Dollars. A good mining rig consumes less power while having maximum efficiency. If you intend to build a mining farm with several mining rigs, prepare yourself for a several thousand U.S. Dollar electricity bill.
Value of Bitcoin
As you may already know, the value of Bitcoin is constantly fluctuating. This is an effective factor in determining your income from the mining process.
Common mistakes and solutions
To build a perfect farm for mining Bitcoin, it should be maintained in the best possible condition. The Bitcoin farm must be built where it is totally legal to mine Bitcoin. People who are responsible for mining Bitcoin should be trained properly. They should have sufficient income and benefit from flexible working hours.
If workers don’t receive sufficient income, they may use mining rigs for their own personal benefit. Supervision is also a crucial part of every successful mining farm. Because lack of supervision may also result in misuse and inefficiency.
If there needs to be human resources in the mining farm, try to establish an environment, in which employees have no concerns and feel the support and presence of their supervisor.
A Simple mining farm doesn’t need a massive amount of capital. But if you want to enter this business professionally, you should carefully manage all aspects including labor force, costs, etc. Mining Bitcoin can be a very profitable business only if implemented systematically.
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Written by: Mohsen Mohseni (Aron Groups).