When the word mining enters our minds, we think of mining metals inside the earth. But in the case of Bitcoin mining, you don’t need to mine the earth. You only need to understand Bitcoin mining, how it works, and the requirements for Bitcoin mining.
Mining metals from the earth and mining bitcoins are different from each other, but one similarity between the two is that they both consume more electricity.
In this article, you will get all the information about Bitcoin mining.
What is Bitcoin Mining?
Bitcoin mining is basically the production of new Bitcoins. This is a process in which we must solve some complex problems in the Bitcoin transaction process. So by solving this puzzle, we got some bitcoins as a reward. These puzzles are mathematically complex problems. For Bitcoin and any other cryptocurrency mining, you need to have computing power.
Transactions with Bitcoin are very easy from the wallet, it is very difficult to confirm the transaction by mining.
Bitcoin mining conforms to transactions, making transactions valid and storing them on the blockchain.
The system used for Bitcoin mining requires high computing power and electric power.
After the creation of Bitcoin, mining started with low-power computers, but as the number of Bitcoins increased, the processing power required for mining became very high.
People who mine bitcoin are called bitcoin miners.
A mining system that consumes a lot of electricity to mine cryptocurrency. Thus Bitcoin mining is considered harmful to the environment.
Soft Info
- This is the production process of New Bitcoin.
- It requires high processing and computing power.
- Solving difficult problems in the excavation process becomes very complicated.
- It is considered harmful to the environment.
- Consume more electricity.
- Bitcoin mining uses large systems similar to data centers.
Bitcoin mining requires good hardware such as CPU and GPU. CPU and GPU need to have high processing power and large capacity memory.
In Bitcoin mining, miners verify transactions and store them as blocks on the blockchain. The size of a block may be as high as one megabyte.
What is bitcoin?
Bitcoin is a cryptocurrency based on cryptography that uses blockchain technology. This is the first of its kind. Bitcoin was created by the Satoshi Nakamoto. It is a decentralized cryptocurrency that uses distributed ledger.
Why to Mine Bitcoin?
To produce new bitcoin.
Verify the transaction and store the new block on the blockchain network.
Now we know what Bitcoin mining is and why we should mine Bitcoin. Now is the time to understand how this process works and why is it so harmful to the environment?
How does Bitcoin mining work?
Because Bitcoin is a cryptocurrency that uses a decentralized ledger to store transaction data. The data is distributed to different locations and devices. Transaction data is stored as blocks on the blockchain.
To add a block on blockchain for transaction data you have to go through a process which is called bitcoin mining.
To add a block to the Bitcoin blockchain, a puzzle is generated. Every time the Bitcoin blockchain algorithm generates a puzzle, the miner’s system must solve the puzzle to be rewarded.
Once the miner’s system solves the problem, block will be added to the Bitcoin blockchain.
The process of adding blocks to the blockchain and solving problems requires mining software and hardware. These are now very expensive and consume more electricity.
What is a Bitcoin Mining Complex Problem?
The basis of bitcoin production is a mathematical puzzle, and miners have to solve this puzzle to get bitcoin rewards. This process is known as Proof of Works.
To verify a block on the blockchain, you should know the hash value of the previous block. Hash is a hexadecimal number assign to the block.
This new hash guess is a mathematical problem in Bitcoin mining. The more transactions, the more hash values are generated. The miner’s system must process all these hash values to arrive at a hash value that is more suitable for the previous hash value. It is the 64 bit hexadecimal number. The system that comes with the solution will be rewarded as some Bitcoin.
The miner’s systems are processing the hashes different different rates.
What is mining difficulty?
The difficulty of mining means the difficulty of generating a new hash which is the solution of the puzzle. The difficulty of mining affects the Bitcoin generation. The difficulty of the mining is the basically the probability of finding the solution of the puzzle.
Mining difficulty depends on the may factors as the number of the miners, efficiency of the miner’s system and processing speed of the mining.
Requirements for Mining Bitcoin:
Most of you want to mine bitcoin, but you don’t know the requirements for bitcoin mining. Here are the requirements for bitcoin production.
Mining System: The mining system is the main requirement for Bitcoin mining. Without it one can not think of the bitcoin mining. A normal computer is not enough to produce Bitcoin due to its very low processing power and data processing capabilities. In order to mine Bitcoin, more processing power and efficient hardware are required. For this, application-specific hardware and software are required.
These application-specific hardware costs are high, ranging from $5,000 to $1,500.
These are also called as ledger maintaining machines.
Internet Connection: Internet connection is the second most requirement for Bitcoin mining. You need a fast and undisturbed internet connection 24/7 to mine Bitcoin.
Electricity: To run a mining system, you need to have electricity 24/7. The electricity demand to run the mining system is very large. 90% of the cost of Bitcoin production is estimated as electricity bill. The cost of electricity varies country to country.
Cost of bitcoin mining:
The cost of Bitcoin mining depends on three factors:
- Cost of the Electricity
- Cost of Mining System
- Cost of Internet Connection
FAQs
Q1. What is block chain?
Ans. Transactions are checked by cryptography through network nodes and recorded in a popular ledger called a blockchain. Read more..
Q2. How long does it take to mine a Bitcoin?
Ans. It take minimum 10 minute to mine a bitcoin.
Q3. Is Bitcoin Mining Illegal?
Ans. Bitcoin mining Is legal to most of the contary in the word but it is not legal in many contary. Many countries have make restractions on the bitcoin mining.
Q4. Can I generate bitcoin on my phone?
Ans. Yes, you can mine bitcoin on your mobile phone, but it is not so effective. Today, bitcoin mining requires a lot of sophisticated software and hardware.
Q5. Is Bitcoin environmentally friendly or not?
Ans. Bitcoin is not considered environmentally friendly because it consumes a lot of electricity.
Q6. How many bitcoins can be made through mining?
Ans. There are only 21 million Bitcoins in circulation. So you cannot produce more than 21 million bitcoins through mining.
Q7. Who can mine bitcoin?
Ans. Everyone can mine Bitcoin. All you need is a computer, internet connection and electricity.
Q8. Is bitcoin mining profitable today?
Ans. Bitcoin mining is very profitable in the early days. But it is getting harder day by day. Therefore, for ordinary people, today’s profits are not much.
