Step 4: Understanding the Types of Mining

Understanding the Types of Mining

Now that we understand what bitcoins are, have a wallet set up to store them, and have made a small amount of bitcoins to test our wallet, we’re set to start making some real amounts of bitcoins.

The way we do this is by mining for them.  Mining, as stated before, is a way of verifying bitcoin transactions made by other people in return for new bitcoins (given right to your wallet).

There are two main types of mining: solo and pool.  Solo mining is done on your own.  With the hardware of an everyday person, it would take years to get earn acutal bitcoins.  But once you succeed, you get 50 bitcoins (worth about 500 US dollars).  This takes too long, so in this Instructable, we are not going to cover this method.

The method we are going to use is called pool mining.  It involves signing up for an account with any one of many different companies.  Using their own software and hardware, they group together the mining efforts of lots of people’s computers.  Every person gets a small number of bitcoins (quite often decimals of a bitcoin).  As a person with a modest computer, this is the only way to go.