Here’s how you can get rich by mining Bitcoins (Part 2)
Bitcoin
In the previous article , we outlined just what exactly they mean when they say Bitcoin mining and no, it's not about digging a hole and looking for money. Mining Bitcoins requires highly powerful specialised hardware that needs to be running specialised software to mine Bitcoins.

But before you run to your neighbourhood computer store to order the parts, know this. Bitcoin mining is an extremely expensive hobby and you need to set a balance between the costs you are incurring and the returns you are getting from it. The costs include the cost of the hardware you need to buy and the power consumption needed to run the hardware 24/7. The returns are, of course, Bitcoins.

There are other things to be kept in mind as well. For instance, the hash rate. The hash rate is the number of calculations the computer can do every second while attempting to crack the mathematical problems during Bitcoin mining. Needless to say, the higher the hash rate, the faster and better you can solve a Bitcoin block and mine coins. Typically, hash rates are measured in mega hashes, Giga hashes and terra hashes per second.

Far more important is to know the tradeoff between the electricity required and the hash rate. To break even, you will need a hardware configuration that not only has a high hash rate but also consumes energy optimally. You don't want to pay all that you earn from Bitcoin mining to your electricity operator. So, you will need to figure out the hash rate per watt of electricity and optimise accordingly. There are quite a few calculators that will let you know where you stand. Compare each hardware configuration before investing.

Now, the Bitcoin mining hardware can be a lot of different things. The old CPU-GPU combo is one, but there are newer options like FPGAs and ASICs (fret not, we'll explain each type of hardware eventually).

If you have been interested in Bitcoins, you must have heard how some nerds rigged multiple GPUs together to make a mining machine. Well, this is the oldest kind of hardware for mining, and frankly, it's quite outdated now. GPUs are designed to handle complex mathematical polygons while running high-end games and that comes handy while mining Bitcoins. For instance, the latest Nvidia 1080 GTX has a hash rate of around 35 MH/S with power intake of 250 W. To be able to remain competitive while mining, you need at least 6 such GPUs rigged together. Suffice to say, cooling down the beast will take significant effort, as with all such GPU-enabled mining hardware. So we suggest you go with the next type of hardware.

FPGAs or Field Programming Gate Array are circuits that can be configured after being built. You can buy FPGAs configured for mining in volume and attach them to your system. Because their sole focus is to mine coins, they give better hash rates of around 1GH/S and draw relatively less power. It's easier to build an array of FPGAs than an array of GPUs as cooling them down is also easier. But even FPGAs are now underpowered in terms of the difficulty level of Bitcoin mining.

Hence, your best bet is to get your hands on an ASIC or Application Specific Integrated Circuits. If FPGAs are customisable chipsets, ASICs are the exact opposite. They are manufactured keeping mining cryptocurrency in mind. These babies can mine Bitcoins at mind-numbing speeds and with much lower consumption of energy. You can get speeds anywhere between 5-500GH/sec and there are promises of ASICs with up to 2 Terahashes/seconds. But these are damn expensive retailing for around $400 (Rs 25,650 roughly) and they are quite hard to get your hands on.

Now that you know the kinds of hardware required and how fast they can mine, it is now important to know the returns. Bitcoin mining isn't a hobby, it's more of an investment. So you need to calculate the profitability which is basically taking into account the cost of hardware, electricity charges, the hash rate and the current price of Bitcoin in the market. You need to see how soon you can pay off the investment. You can check your mining profitability here .

After the hardware part is done, it's time to install the right software. You will need the standard Bitcoin client that will connect you to the Bitcoin network where you will get the blockchain that you have to work on and the mining client.

The mining client will present you with blocks to solve. There are numerous such mining clients and depending on your OS, you can take your pick.