Bitcoin Cash (BCH) came to life as a result of a hard work done to Bitcoin Classic in 2017. Both BCH and the original version of BTC are based on SHA256 hashing algorithm but because the block size has increased eight times Bitcoin Cash is more profitable. This may come as a surprise considering that the price of Bitcoin is around USD 7500 and BCH is trailing behind at average USD 1500. But the difficulty required to mine for blocks in BCH successfully is much lower than that of BTC. The size of the block also matters. While one block in Bitcoin ledger is one megabyte, a block of BCH is eight megabytes so it can accommodate more data and as a result, more transaction fees can be earned by the successful miner once a block is discovered.
Joining cryptocurrency movement as a miner is a reliable way to earn a profit and get familiar with the way cryptocurrencies operate. Bitcoin mining is the process that uses cryptography. Mining in some way resembles the actual way diggers mine for precious stones or relics, but in crypto world, miners rummage through the blockchain looking for transactions to assemble to the blocks. Once found and confirmed to be accurate, these transactions are sealed with an immutable highly secure sequence of numbers and entered to the blockchain. You should then select the most recent transactions in the header of the most recent block to be added them into the new block as a hash. This chain continues to expand with a new block being added to roughly every 10 minutes. The chain of transactions is a one endless master ledger that will continue to grow.
The process of sealing the block is called “proof of work” and this is what the miners receive their rewards for. This is a problem that is designed to ensure that the new block to be created is complicated and the data used in making the block satisfies the laid down requirements. Today the incentive for block finding and completion is 12.5 BTC which inspires many people to mine cryptocurrencies. Hurry up, because, on June 23, 2020, the reward will only be 6 BTC. Other rewards include transaction fees.
The process of mining BCH is similar to that of BTC but there are several differences that the beginner should be aware of. Since the size of a block is significantly bigger, so is the computational power consumption. The reward is consequently higher, too. Competition among miners and increasingly complex math problems are making it more difficult to turn a profit especially if you one on older hardware.
Mining is a resource-intensive process that explains the growing need in computational power to be able to successfully compete for block solving. The complexity rate of the network is also growing depending on how many miners join the ranks.
Another valid reason to start investing in Bitcoin Cash hardware is that this coin is becoming widespread. Many large exchanges permit trading BCH and withdraw proceeds into the bank account.
To successfully mine today you need a specialized equipment which is usually a unit with Bitcoin-specific ASIC chips installed. Before you invest in such unit make sure to calculate the profitability of the entire endeavor. You should account for these things:
- The hashing power of your equipment
- The local costs of electricity
You can find many calculators online so research before you start to invest in popular miners. ASCI or application-specific integrated circuit machines have arrived at the market and changed the rules of the game immediately. Since ASCI machines are built specifically for the purpose to mine a certain type of crypto coins, they are highly effective at what they are designed to do. High-end ASCI machines have a hash rate of over 1 million per second. A typical CPU running Bitcoin software has a per second hash rate of 1.5. That’s why CPUs are no longer even supported by Bitcoin-focused software because a CPU running non-stop 24 hours a day would likely not generate a Bitcoin for several years. Also it was part of a pool.
GPU units are also being phased out. The difficulty to successfully mine a block of Bitcoin has increased to a level that may make the cost of electricity outweigh the payout a GPU miner will ever see.
Some miners complain that this trend favors those who are capable of investing thousands of dollars into expensive hardware, as well as the early believers in Bitcoin who already earned a hefty profit from their early efforts including investments. Those early profits could be rolled into the latest and greatest hardware such as Dragonfly or AntMiner S5 or S7 to continue generating Bitcoins well into the future. Another critical benefit of ASICs is that they make the process of adding transactions to the Bitcoin blockchain more efficiently, thus decreasing the waiting period for users. This, in turn, improves the usability of Bitcoin and in part has contributed to the skyrocketing growth that Bitcoin has seen over the last two years.
Should you Mine BCH in Cloud?
There is also another way to mine. With cloud type of mining you are paying to use someone else’s resources and servers, so that cuts into your profits significantly. The positive to this method is that it doesn’t require using your electricity or even buying a machine.
Buying a machine to mine or purchasing a mining cloud contract is risky. While there are some great success stories out there, be sure to research them thoroughly before deciding if this business is right for you. For every person making money, there are plenty of people losing money.
Bitcoin Cash Mining Pools
Mining pools have sprung up on a very simple concept. To earn more reward you must find more blocks. Unless you want to build a mining farm you can join a group of miners who connect their units and work on a number of blocks. Once the problem is solved, the miners share the rewards. For Bitcoin Cash mining you will need to join ViaBTC, AntPool, BTC. Top, BTC.com pools but there are many more.
With the right information and tools, Bitcoin mining is not only rewarding, but it’s also a fun and safe way to transfer money across the internet. To make as much money as possible, you need to have the right software and powerful computer hardware.