If you’ve spent any time reading about Bitcoin, then you’ve probably come across the term mining before.
Mining is the term used when somebody sets up a computer to monitor Bitcoin transactions and confirm them for payment in return for some Bitcoin.
But what exactly is mining doing? How does mining work? bitcoin mining how to?
This guide explains how Bitcoin mining works in plain English.
so that you can understand how it works and why it matters.
Bitcoin Mining – What it Means
As its name suggests, bitcoin mining refers to the process of new bitcoins being created and added to a public ledger.
But before any blocks can be mined, transactions must be validated by bitcoin miners—computers that race against each other to solve mathematical problems. The first miner (or group of miners) to complete these tasks wins new bitcoins as a reward. All bitcoin transactions are recorded on a blockchain: A cryptographic digital ledger shared across all nodes in a decentralized network. Bitcoin mining is essential to keeping Bitcoin running and securing transactions on the blockchain. It also helps create new coins. Miners receive some form of compensation in the form of fees and new bitcoin upon the creation of each block.
How Does Bitcoin Mining Work?
In essence, bitcoin mining is competitive bookkeeping. Miners create and maintain a huge public ledger that includes the complete record of every bitcoin transaction.
Every time somebody wants to send bitcoins to somebody else, the transfer has to be validated by miners: They make sure the sender isn’t transferring more money than she has.
If she does have the money, her signature will be added to the ledger along with other information that will let others know where she sent her coins.
This is necessary because only one miner can add a block to the blockchain at a time (though multiple miners can work on different blocks simultaneously).The Bitcoin Network uses hard-coded rules to decide which miner gets to update which block, but these rules can change.
if there’s enough support behind an alternative version of Bitcoin software.
What Is Blockchain Technology?
People often hear the term blockchain lately.
If you haven’t heard of it before, think of blockchain as a large, decentralized, and public ledger of all cryptocurrency transactions.
This way, everyone can see how much money is in your digital wallet or where your bitcoin is going without requiring that you reveal any personal information.
The Benefits of Bitcoin Mining
Mining is Bitcoin’s backbone.
It’s how new bitcoins are minted into existence and, for most of its history, it was done using CPUs or GPUs . But as Bitcoin gained popularity, miners quickly discovered that graphics cards were far better suited to mining than CPUs. They run cooler and consume much less energy. As a result, you can mine with your computer while you sleep or work. You could even start a side business mining cryptocurrency while you work at your full-time job!
how to mine bitcoin?
To mine bitcoins, you need to join a mining pool like antpool. This is a group of people that combine their resources and mine together. You get paid according to how much work your computer can complete. This is usually measured in gigahashes per second (GH/s). A high-powered miner consumes lots of energy, but it will also generate more bitcoins than one with low power.
So if you have cheap electricity—that is, if your utility charges you low rates for high electricity usage—you’re better off going with a high-hash-rate machine.
On the other hand, if electricity costs are prohibitively expensive where you live, go for broke and buy an efficient machine.
Bitcoin miners tend to hoard their newly mined coins until they can be exchanged for fiat currency, which makes them an ideal target for thieves.
