Bitcoin mining in Singapore explained

Bitcoin started almost 10 years ago and today it has become an integral part of the financial world. In the financial world, bitcoin is seen as the next big thing and throngs of people are investing in it. One of the ways to join the bitcoin market is to become a bitcoin miner. What is bitcoin mining and how can you become a bitcoin miner in Singapore and earn this cryptocurrency?

What is Bitcoin?

To understand bitcoin mining, it’s essential to understand what bitcoin is. Singapore Dollars are solely managed and printed by the Monetary Authority of Singapore. However, bitcoin is own by all the global peers of the system. There is no single bank that issues bitcoins.

Once you earn bitcoins, you can either trade it or even use it to make purchases. You could also store the bitcoin and wait for the price to increase and then sell it on the market.

What is Bitcoin Mining?

One way to gain bitcoins is to buy it from the market. However another, and he most popular, method is through bitcoin mining. As mentioned before, bitcoin is owned by peers (users) of the system. Bitcoin uses the system of blockchain technology. As a transaction is performed, the block is forwarded to the next users.  These users can mine the bitcoin block to earn more. In fact, this is done through a process called the “Proof of Work”.

How does Bitcoin Mining Work?

Because bitcoin is a system that has no single bank, it is crucial for each transaction to be verified and checked. This is done by a proof of work system – which is the core of bitcoin mining. And, earning bitcoins is an incentive for users to conduct this work.

When a block is passed on to the user, it is shown as a complex string of numbers. This is a security code which keeps the data safe and secure. However, it needs to be verified. This is where bitcoin miners play a vital role.

SHA 256 Hash Function

Created by NSA, the Secure Hash Algorithm (SHA) is a method used to store digital data securely. The security protocol has a standard form – the input will always give the same output.

For example, the input is: hello.

The SHA 256 hash output will remain the same regardless of when or where it is decrypted.

What does a Bitcoin Miner do?

A bitcoin miner, in essence, has to verify whether the data has or has not changed, and in turn, verify the bitcoin transaction.

For example, a bitcoin miner will verify whether the 256-bit SHA code is “hello” or if another block has been added to the chain. It can typically take a bitcoin miner 15-30 minutes to unravel the SHA code. Doing it manually is not only time consuming, but it also requires you to be a mathematical expert. All of this is call proof of work and for newcomers, it requires trial and error before you can figure out how to perform it.

Blockchain.info is an excellent place for you to find bitcoin blocks.

The bitcoin miner has taken the has code – “00000000000000000038b58362a67e4b7a03deaef5aff0121209cfd51728d40d”, conducted the proof of work and verified the proof of work. In the simplest terms, that’s what bitcoin mining is.

How can you perform Bitcoin Mining?

Bitcoin mining can be done in a manual format, which is slow and it’s an unlikely method for you to earn sufficient bitcoins.

Build your bitcoin machine

You can build a machine that helps you mine the bitcoins quickly. A bitcoin machine is a personal computer that has been adapting to bitcoin mining needs. Moreover, at the dawn of the bitcoin age, it was found that graphic cards contain the require processing power to conduct this work. However, the downside was that too much power was consumed, often leading to the graphic card burning out.

Today, there are specialise computer components that can be using to conduct bitcoin mining. Components like AntMiner and Avalon are popular. Even so, creating the system, ensuring the system is running efficiently, managing the high power consumption, keeping your system cool, etc, are all issues you have to deal with it.

Opt for Cloud Mining

Cloud mining immediately eliminates the need for physical hardware. You don’t need to have a powerful bitcoin machine to conduct bitcoin mining. Instead, cloud mining offers you the hardware through the web. Cloud mining provides you with shared processing power from a central data centre.

The only requirement for cloud mining is having a reliable internet connection with large bandwidth.

In fact, the disadvantage is that you have lesser control over the system, which results in lower profits.

Joint a Bitcoin Mining Pool

Bitcoin mining is a very competitive field.

Hash rate

Hence, you might want to join a mining pool. Miners work together to solve blocks and share the rewards. By working together, the speed and quantity of work increase greatly.

Should you perform Bitcoin Mining in Singapore?

Bitcoin mining is a profitable venture to enter. It can be done regardless of where you are in the world. So, if you are in Singapore, the question you should be asking is – Which is the best bitcoin mining method for me?

Conducting it manually is not a recommended option. It’s time-consuming and earning profits can be difficult. You could build your own bitcoin mining machine. However, as mentioned previously, there are many technical aspects you should be concerned about. Power consumption would be the biggest issue. Electricity costs S$0.21 cents per kWh. Considering that most bitcoin machines run 24×7, you are looking at a power consumption of anywhere between 600 W to 900 W.  In fact, this can make operating a bitcoin machine quite expensive.

The alternative is cloud mining. It’s much more affordable and easier to operate. You could combine cloud mining and bitcoin mining pool to maximise your output and bitcoin profit.

Bitcoin mining may be difficult, to begin with, but if you already perform bitcoin trading, you will be able to grasp the basics of bitcoin mining. For the actual execution of bitcoin mining, there is a vast array of information available online for you to learn from.

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