Before we begin, I must make one thing clear – mining is NOT for everyone.

In fact the vast majority of people who are involved with bitcoin do not mine. There are lots of ways to get involved in bitcoin, including trading, investing, or simply holding bitcoin. You have to decide which works best for you.

Bitcoin mining is potentially very lucrative, but also extremely competitive. Mining for profit requires a big investment of time and money, as well as a great deal of specialist knowledge. The cost of mining hardware at this point is prohibitively expensive for most people, a basic start-up will set you back several thousand dollars, and new equipment will become obsolete pretty fast. However, with the right resources and guidance, it is possible to build a successful and profitable mining business.

Joining a pool

The vast majority of miners choose to mine in pools. This means signing into a network and combining your hashing power with that of other miners to mine at a much faster rate. Any bitcoin mined is divided up between the pool members based on the work done. This is the way the vast majority of miners choose to work, since it offers smaller, but much more frequent and consistent pay-outs. You can mine on your own if you wish, but personally I wouldn’t recommend it.

The two main mining pools I recommend using are Eligius and BTC Guild, these and the pools I use myself.

Profitability

The key to mining is efficiency. This means balancing power consumption against the hash-rate of your hardware, as well as the difficulty level of mining a block. After all, there’s no point mining bitcoin if you’re spending more money on electricity to mine it than you’re earning.

As bitcoin mining becomes more and more competitive, the demand for faster and more energy-efficient hardware is increasing. Before starting your own mining operation, you need to take into consideration that hardware you buy today will be considered obsolete in a few months’ time. While older ASICs can still be run at a profit, the amount of bitcoin you’ll be able to mine with them will decrease substantially over time. For this reason, I pre-order the latest hardware before it’s even released, that way I can keep my own mining operation up to date and running at maximum efficiency.

Although bitcoin mining can be challenging, it can also be an extremely lucrative and rewarding venture. My advice to anyone serious about getting into bitcoin mining is to seek out guidance from a trusted source beforehand.

I offer a training and advice to anyone looking to start up their own mining operation on my site http://BitBanx.com/.

Mining Contracts

If you would like to get involved in bitcoin mining, but don’t have the time or resources to run the hardware yourself, you might want to consider purchasing a mining contract. This allows you to essentially ‘lease’ high-powered mining rigs that are run on your behalf. All you need to do is enter your wallet address, and any bitcoin mined is automatically transferred directly to you. You can usually take out 3 month, 6 month or 12 month contracts, depending on how much you wish to invest.

By purchasing a mining contract you’re getting bitcoin at wholesale price, potentially cheaper than exchange prices. I will say this however; beware of scam artists – companies that are promising very high returns on short term contracts are usually not all they seem. You see quite a lot of these on eBay.

For more information on mining contracts, head over to http://bitbanx.com/mining/.

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