Now that we’ve discussed how Bitcoin mining works, let’s talk about how you can get started mining bitcoins.
Pooled Mining
It’s nearly impossible to mine bitcoins alone anymore. Instead, most miners join a mining pool, which is a collection of miners who are all working together to create the next Block in the Bitcoin Block Chain.
Usually, the mining pool operator assigns each miner with a small piece of work called a share, which the miner can claim by solving. When a Block is generated by the pool the reward is divided up to the miners. How the reward is divided up varies from mining pool to mining pool, but generally speaking, miners with more shares get a larger reward.
If you’d like to give mining a try, without installing any software, you can visitBitcoinPlus. It lets you mine bitcoins using just your browser, but since it can’t use the full resources of your computer your payouts will be very small.
When you’re ready to really get involved, you’ll need to download some software and select a pool.
Most mining pools recommend using GUIMiner, if you’re running Windows. Like the name implies, it provides a nice graphical user interface you can use to get setup. You can read the official thread on GUIMiner to get more information.
Selecting a Pool to Join
When deciding on which pool to join, keep an eye on what sort of payout structure they use (you can find an explanation here), whether or not transaction fees are included in the payouts, what sort of fee the pool charges (the percent of the payout the pool owner retains), and how big the pool is. Bigger pools usually generate more Blocks and get paid more often, but the rewards is split up a lot. Smaller pools get paid less often but receive a bigger payout each time.
You can use Bitcoin Chain to get an overview of the major Bitcoin mining pools. Here’s a look at the three largest.
BTC Guild is the largest mining build, both in terms of the number of Blocks found and the sheer amount of processing power it can bring to bear. Since the start of this year, it’s found nearly one third of all Blocks added to the Block Chain.
It’s worth nothing that there’s a distinct “upper class” to BTC Guild. The top 10 users accounting for almost half of the pool’s entire processing power (which means they get almost half of all payouts).
For payouts, you can choose Pay-per-Share (PPS) or Pay-per-Last-N-Shares (PPLNS). Which one you choose changes whether or not transaction fees are included in the payout, and what the pools’ fee percentage is.
50 BTC is the second largest mining guild, in terms of number of solved Blocks this year, but it can change places with Slush’s pool depending on the time frame you’re looking at. Over the last month, it’s generated about one third as many Blocks at BTC Guild.
The pool uses a Pay-per-Share structure. The pool fee is 3%, and the pool also keeps any transaction fees in the Block.
BitcoinCZ, aka Slush’s Pool, was the first Bitcoin mining pool, and it’s still one of the largest. It’s payout structure is Score based, which means that newer shares are worth more than older shares. It also has a relativity low 2% fee.
Other Pools
The top three Bitcoin mining pools account for over 50% of the hashing power of the entire Bitcoin network, which is a worrying statistic who want to keep Bitcoin distributed. There’s no particular reason to join the largest three pools - you’ll get paid more often, but you’ll get paid less. Your payouts, over time, would be the same as joining a smaller pool.
I’m a fan of Mt.Red, the Reddit mining pool (just because I’m a fan of the site itself). Check out the other mining pools available, and if one looks attractive, go for it.
