How to make bitcoins using your Windows PC
You have probably read about bitcoins in the past months and it is likely that not everything that you read about was praising the digital currency. What you probably read in the past days was that bitcoin dropped from an all time high of about $266 Dollars - that is per bitcoin - to $97 as of today. That's still a lot considering that the value of a single bitcoin was just $13 on January 1, 2013.
The currency is interesting for a number of reasons and while it would take too long to go over all of those, I'd like to mention a few. First, it is a virtual currency that is not managed by a central authority but by an Internet-based network. Currency can be traded just like any other currency, you can exchange Dollar, Euro or any other currency in to bitcoin and vice versa. Bitcoins are created through a process that is called mining. To put it very simple: a mining program runs on your computer that will use your computer's processing power to create new bitcoin.
Single users need to be really lucky to stand a chance in the race to create new bitcoins, which is why many join so called pools that divide chunks of works among their members to stand a chance against server farms, super computers and larger networks. Pooled mining will reward you with smaller but more frequent returns.
I'd like to thank Ghacks reader Alex as he helped me tremendously in this matter.
Setting up your bitcoin mining PC
You need two tools to get started:
- A secure wallet that stores all the bitcoin that you own.
- A mining program that lets you use your computer's resources to mine.
There are several wallets out that that you can pick one from. Electrum is a cross-platform wallet for Windows, Linux, OS X and Android that is available as binaries and as source files. Windows users can download a portable version of the application or use the installer to install it on their system. Setup should not pose any troubles to you, just make sure you store the secure phrase in a safe location so that you can recover your wallet at any time should you forget the authentication password.
Guiminer or Gui Mining is a free portable program for the Windows operating system that you can use to mine for bitcoin on your PC. The core benefit of the program is that it ships with everything that you need to get started. It supports joining a mining pool but also solo mining if you prefer to go that way.
Running Guiminer
Now that you have the tools to start mining bitcoin, you should consider joining one of the mining pools. There is Slush's Pool which I have joined for now for instance. You do need to sign up at the pool's website to receive one or multiple worker logins that you need to enter into your program - in our case Guiminer - to start mining and get credited for your efforts.
You can naturally join any of the other pools linked directly from the application, or use the other option to enter a custom host name and port instead if the pool that you have joined is not listed in the program.
Note that the mining will tax your computer a lot so that it is best done if it is idle and not while you are working on it. While you can continue writing blog posts and doing other light activities, you will notice that more taxing activities will be slower than usual.
The program displays a couple of information about the speed of your system and so on and so forth, but if you are interested to find out how much your mining has earned you, you need to visit the mining pool's website as this is where that is listed.
Here you see estimated, unconfirmed and confirmed rewards displayed to you. Don't expect to gain several bitcoins a day using a single personal computer, but if you are persistent, you will earn money this way. You may also want to enter your Bitcoin address (shown in your wallet) on the mining pool website to receive mined bitcoins there.
You are probably wondering how fast a single personal computer can go. Not that fast actually. My Intel Core i7 860 cpu, 8 Gigabytes of RAM and a Nvidia Geforce GTX 470 graphics adapter has a speed of about 102 Mhash/s. The hall of fame on Slush's pool website shows that some users managed to generated more than 149000 Mhash/s.
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It’s not worth mining anymore, it will cost you more in electricity than you will make in bitcoin. Results from a recent mining experiment done at a data centre support this, proving a return of just 0.4 Bitcoin from mining 600 Servers for a year.
src: http://www.datacenterknowledge.com/archives/2014/02/24/mining-experiment-running-600-servers-year-yields-0-4-bitcoin/
The whole purpose is bitcoins cannot be faked or value diminished by printing/making more. That is what the mining is. Like Gold there is only a limited number that can be made via computing. Unlike fiat (paper) money which our current banks create from thin air. In future only Gold, silver etc and something like Bitcoin will have value. It cannot be faked. Gold and bitcoin are being artificially kept low in price because the banks are manipulating the exchanges (some have been caught). All the major countries are stockpiling gold and bitcoin.
Name error problem solved.
guiminner shows name error. Is this ok?
screenshot provided @ https://app.box.com/s/wzp45k5eim62v1s0337s
.. oh and by the way.. what an incredible waste of computing power… I dont believe any goos use is being made of the data crunching itself… thats just criminal environmental crap..
Actually, the data crunching across all servers/PCs is actually securing the data, making sure that there are no fake or duplicate transactions.
I can make more money using a telephone, nonsensical pursuit of money for a changing target. Better to speculate with the coins instead.
I know I frequently link to Steve Gibson (Security Now) dissertations on various topics (like some sort of publicist) but they’re always well researched and presented.
Gibson just so happens to be very interested in Bitcoin, was an early adopter and actually mined 50 Bitcoins before the hardware maniacs jumped into the game. He’s revisited the topic several times since the initial Feb 2011 show with Tom Merrit (filling in for Leo Laporte).
Leo is rather skeptical about the whole subject so there’s lots of back and forth clarifications and examples. More interesting and digestible then a dry academic technical bulletin.
These are transcript links but there are mp3 links on each page so you can listen while working out if you wish. Bitcoin is usually one of a number of topics covered in these episodes so you can search keyword bitcoin if they all don’t interest you.
http://www.grc.com/sn/sn-287.htm
http://www.grc.com/sn/sn-290.htm
http://www.grc.com/sn/sn-306.htm
http://www.grc.com/sn/sn-396.htm
http://www.grc.com/sn/sn-398.htm
http://www.grc.com/sn/sn-399.htm
Interesting, I’ll add that to my “must listen to” list.
WHERE CAN I BUY AN 860 GHz COMPUTER?! THAT’S AMAZING. :)
It is a prototype I built in my garage, not for sale yet, sorry ;)
“Guess what issuing banks do. Yes, they print money…”
True, except that banks have a gold reserve, and they don’t magically create money out of nothing, they need the money of savings and/or assets to invest, to make more money with that. Even stock trading is based on the value of a company.
But after reading https://en.bitcoin.it/wiki/Mining i understand that all mining does is generate “blocks” upon wich the discoverer of the block is rewarded “a certain number of bitcoins, which is agreed-upon by everyone in the network”.
So what is the real value of such a block? What performance, service or asset has the discoverer of a block made, and for whom, that justifies a reward im bitcoins?
How does crunching a CPU to create meaningless cryptographic blocks create value to anyone?
This reminds me searching for gold with medal detector. Everybody buys a metal detector = (CPU, GPU, energy cost) and start searching on some piece of lend = (Bitcoin server). Since number of servers is limited, the more people are into searching/mining, the less chance that some individual will find a gold piece = ( Bitcoin ).
Bitcoins are no currency. If you find a gold coin, you get money for it or hold it for investment. The same with Bitcoins. They are new Gold for Internet, and they purposely scares to create high value. But unlike Gold they did not prove itself in the long term. Maybe people get bored of them, and they lose value altogether. Or some hacker will find bug in the algorithm and crush the whole system. High risk investment.
I suggest you read this Wikipedia article on money creation: http://en.wikipedia.org/wiki/Money_creation and this one on Fractional reserve banking: http://en.wikipedia.org/wiki/Fractional-reserve_banking
Oh, and also Fiat Money
http://en.wikipedia.org/wiki/Fiat_money
Hi Martin,
AMD GPU’s are the preferred graphics cards for mining, sadly NVidia doesnt perform well when mining. My 5870 does 400MH/s and my 7970 does 600MH/s, both slightly overclocked and unvolted.
So, what does a mining program actually do to generate value? (bitcoins)
I get that it uses your CPU, but for what?
I mean, you dont get money for nothing in this world, so i assume all these used CPU cycles do something(?) that is of enough value to someone to justify paying you?
Or is bitcoin really generating value out of nothing? (except for the cost of energy/resources)
Guess what issuing banks do. Yes, they print money and this is a similar principle only that bitcoins go straight into the pockets of the people who mined it. I suggest you check out the Wikipedia article on Bitcoin, especially the protocol to find out more about it.
http://en.wikipedia.org/wiki/Bitcoin#Protocol
This is all very interesting, but what is the processor and “mining” actually doing? Numbers are being crunched, but for what purpose… Reminds of me of the old Seti at home distributed computing for a purpose… but what’s the purpose here?
Check out this explanation, it should answer your questions: https://en.bitcoin.it/wiki/Mining
This Bitcoin business has all the signs of get rich quick scheme. Very few will get rich, and most will be with empty wallets.
Dante is right. That is what I meant…
“. And bitcoin is designed so that the more people that are mining, the farther apart the payout.”
You should mention how much bitcoin you can earn in 1 day/week of mining. Also, its very PC taxing. Does the benefit offset the cost of energy?
The are bitcoin rigs out there and if my understanding is correct, the faster other people can mine, the less faster you will earn bitcoins on your standard rig.
Today I have read today that the energy requirements of making and handling of bit counts every day is a wapping, and ferry alarming amount that stands for the same that 30.000 households need ever day.
Like everything done decentralised, it is often costly. I remember in 2010 or 2011 filesharing was taking more than 60% of all online traffic. Can you imagine how much energy it takes to run servers and routers for 60% of online traffic? This Bitcoin “mining” has all the sighs to become next big energy hog.
If you’re paying average or even half-average power costs, you lose money mining bitcoins with your GPU. There are exactly zero cards on the market that can make money mining since ASICs came out. Your CPU won’t even get you 1/100th of what your GPU will.
So, yeah, don’t bother. You’ll make 50-100x more in a day digging in your couch cushions.
Not necessarily true. For folks like me with solar and geothermal power, electricity is cheap, near costless :)
ok, i too was intrigued by bitcoin mining after the recent reports… until i saw the efficiency of this undertaking. maybe with a fast cpu and potent sli this is somewhat worthwhile, at least compared to the average notebook. but then there are these specialized mining-boxes, computers with special hardware optimized to mining. these start at, dunno, 100-something bucks and go up to several thousand dollar and even the smaller ones completely blow pc-hardware out of the water while using a fraction of the power needed to run those at full load.
so i have the feeling mining alone will get you close to zero bitcoins, no matter the hardware. what would be interesting is the return mining in a pool will bring. if only some cool tech blog could try this out and tell us their results…
Well my test PC is earning me roughly 0.0007 Bitcoins per hour. I can’t really say if you get special rewards every now and then in a pool or not, but at the current rate, it would take me a good 1400 hours to mine 1 Bitcoin or $100 which may or may not cover the energy costs depending on where you live.
So, it is not really worth it using my hardware. I found a mining hardware comparison chart that not only lists the hardware and the speed they can achieve, but also the speed to money you spend for the hardware factor. You can buy dedicated hardware. A soon to be released 50 GH/s Bitcoin Miner sets you back about $2500 for instance: https://products.butterflylabs.com/homepage/50-gh-s-bitcoin-miner.html
Assuming that it is indeed 50,000 times faster than my local system, it will generate 35 Bitcoins (50,000 x 0.0007) in 1400 hours. That is 3500 US Dollars for 1400 hours of work. No information is provided about the energy requirements of the system so I can’t really say anything about how much you have to pay to run it for those 1400 hours.
The calculation may have its flaws though so do not take it at face value.
$3500 for 1400 hours makes for $2.50 per hour. Not too good a return there. And bitcoin is designed so that the more people that are mining, the farther apart the payout.
I’d say the return depends on your costs. So, you pay $2500 for the rig and the power consumption. The company releases no information about those unfortunately so you can’t really say what those are. You also have to factor in the exchange rate as it can fluctuate quite a bit as we have seen.
This is a joke right? A bitcoin tutorial at this time? No mention of energy cost… so you are really mining with this rig? Don’t believe it…
It likely consumes the same resources as playing a computer game does. I also believe that every user should make that decision individually. If you think it is using too many resources or driving up your energy bill, then do not use your computer to mine bitcoins.
BBC sucks-o-cock news just in – how much energy do the banks use while they are taking our money?
2 related Bitcoin stories :
Cyber thieves target bitcoin owners
The bitcoin virtual currency has had a volatile 24 hours that saw values plummet, hack attacks, trading shutdowns and bitcoin-stealing malware…..
http://www.bbc.co.uk/news/technology-22120833
Bitcoin miners generating high energy bills
Bitcoin is facing fresh scrutiny after a report revealed the power requirements of the currency’s miners…
Tracking website Blockchain logged 982 megawatt hours of electricity consumption over a 24-hour period by Bitcoin miners around the world.
According to Bloomberg, that is enough to power 31,000 homes in the US. Watchdog Ofgem claims the average UK household uses 3.3MwH per year…
http://www.bbc.co.uk/news/technology-22153687