What is Bitcoin Mining?
Bitcoin is a type of popular virtual currency, called cryptocurreny. Instead of being printed like paper money, it is mined by using special software to solve a mathematical problem – with a solution consisting of 64-digits. The person who mines it is rewarded with a certain number of bitcoins.
Some of those who mine bitcoins help to keep the network safe for its users by approving transactions. Mining is one of the most important parts of the entire process, as it not only creates the piece of currency; it also ensures that the network is functioning correctly.
What does it mean?
Bitcoin mining is the process of adding transaction records to Bitcoin’s public ledger of past transactions, or blockchain. This ledger of past transactions is called the block chain, as it is exactly that; a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place.
Overall, it is not an easy process to mine bitcoins – but it was intentionally created this way. It was designed to be difficult, so that the number of bitcoins made each day would be more likely be consistent throughout the period of time that they are made.
How to mine a bitcoin
Bitcoin mining is legal and is accomplished by running a code on a custom built ASIC chip, which can perform up to 100x better than an average computer. If you try to mine a bitcoin with a standard computer, it will generally cost you more money in electricity than you are likely to get as a digital reward!
There are so many different kinds of bitcoin mining hardware available, so finding one which is cheap and effective shouldn’t be too much of a problem.
The network rewards miners for their work by giving them one bitcoin – but there is the potential to earn more; as the more a miner contributes, the more bitcoins they will receive. These can either be new or previously mined, which doesn’t make much difference to their value.
Bitcoin mining pools
When you are ready to mine bitcoins and have the right tools, it may be a good idea to join a bitcoin mining pool. A mining pool is a group of miners, and each one works together to solve a problem. In a mining pool, everyone shares the rewards that they get with each other.
It is considered to be a better option to become a part of one of these groups, because without the support and expertise of other miners, you could end up mining bitcoins for a long time – and you might never actually earn any.