You might have heard of the term Bitcoin or Bitcoin mining around.
To understand what Bitcoin mining is, let’s go back to the basics and try to build it from the ground up.
Cryptocurrencies are virtual/digital currencies. Bitcoin happens to be one among other cryptocurrencies. It was invested in 2009.
All bitcoin transactions are recorded and maintained in the Blockchain. A Blockchain is a form of a big ledger that is kept and controlled by all Bitcoin users around the world.
Theoretically, everything is under a strand of letters and numbers that cannot be tied to you. You can buy or sell bitcoin without verifying your identity.
1. What is Bitcoin mining?
Bitcoin mining is simply the process of creating new bitcoins. How bitcoins are created will be explained under the works of a miner.
2. What do you need to start Bitcoin mining?
If you are looking to get into bitcoin mining to make profits, (I don’t think there is anybody is mining for any other reason) it is very possible, a regular PC is not recommended.
You can purchase bitcoin miners online from designated electronic stores. Reduce
Bitcoin miners are not cheap machines and you may want to first read reviews at Britainreviews.co.uk before making any purchase.
There you’ll find online reviews about electronic stores sites that sell bitcoin miners. Engage with the customer feedback and the complaints raised.
3. How Bitcoin mining works
Bitcoin mining is the process of creating new bitcoins. Unlike regular mining, this one involves the use of a complex system of cryptography.
I want you to see bitcoin as one big Ledger but documents all transactions under it. How All Communications under this lady must be encrypted in order to secure all transactions and at the same time give the ledgers access to every bitcoin user.
This Ledger needs to be maintained and updated anytime there is a transaction. All these are done using hash functions and cryptography.
The people responsible for maintaining these ledges are miners and they get rewarded with Bitcoin as a result.
4. What is a bitcoin miner and what do they do?
A Bitcoin miner is a person who tries to solve the hash functions.
Solving a hash function involves guessing multiple numbers so many times.
When a bitcoin miner gets the numbers that solve the puzzle, their spreadsheet gets to be permanently saved. The miner will then have to give up their computing power to maintain the ledger.
What their computers will be doing is maintaining the public ledger. Which involves;
- Relaying transactions
- Validating signatures
- Putting the transactions in the block
- Adding the block to the blockchain
- Distributing it to all the people in the Bitcoin network.
As a result of doing all the above, the miner gets rewarded by getting Bitcoins. The miner gets these bitcoins not as a result of buying or selling but as an award.
As you can already tell, a new bitcoin has been created. This is what is gold Bitcoin mining.
5. What is a mining pool?
Overtime mining became very profitable and big companies invested in Bitcoin mining which pushed individual miners away.
To solve this, a group of individual miners came together to do bitcoin mining and agreed to share the profit made from the payouts after mining a block.
Miners in a mining pool are anonymous.
This is what is called a mining pool.
6. Is mining safe?
In general, there has been a lot of controversies about the safety of cryptocurrencies in general. Whether mining is safe or not can be viewed in two ways;
· Security issues
Yes, bitcoin mining is safe. Selling and buying bitcoin is the part of bitcoin where it might not be safe.
All you need to keep your mining safe and secure is preventing computer malware and viruses.
· Environmental safety
Maintaining the crypto mining system consumes a lot of energy power. The average energy consumption is estimated to be over 133 TWh/year.
Many people view this as being a threat to the environment considering it releases tons of electronic wastes.
If you are looking to start making money from Bitcoin, I would not recommend bitcoin mining because it
However, if you have the financial capacity to purchase mining equipment, then is it a good option. Do your research and learn more before getting into mining cryptocurrency.