Sun, 19 Sep 2021

How Does Bitcoin Mining Work?

05 Jul 2021, 12:24 GMT+10

As the world is evolving, cryptocurrency network marketing and online trading and investment platforms are gaining immense popularity. Bitcoin mining is another computerized process that is being recommended and tried despite the hatred and the complexity. In this brief post, we would be enlightening our readers what this advanced mining is and how it works.

To be able to understand how Bitcoin mining works, we need to know what exactly Bitcoin mining is.

So, what is Bitcoin mining?

Bitcoin mining is not typical mining you can imagine, it's a computerized process in which new Bitcoin is created by solving a mathematical puzzle. The puzzles are not at all ordinary, they are so complex that sometimes the incredibly powerful computers give up.

In other words, the Bitcoin miners have to compete and solve an exceptionally tough mathematical problem, the miners who are successful in resolving the puzzle get a reward; Bitcoins. Each time the problem is resolved a new Bitcoin is created.

Now that the readers can tell what Bitcoin mining is, let's discuss what we have gathered to discuss here.

How does Bitcoin mining work?

The Bitcoin mining process may be complex to perform but it is super easy to understand. So all our readers who want to know how Bitcoin mining works, here is how;

There is a decentralized ledger that is made to record the transactions throughout the network. The ledger of transactions or blockchain ledger is an unresolved puzzle. The miners sloves the complex problems, proudly add a block to the block chain ledger with the approved transactions and earn a reward in the form of Bitcoins.

Bitcoin Mining is not as simple as it seems, the individual or the miner needs to have a specialized mining software(ASICs) that can cost somewhere between several thousand to one hundred thousand dollars. The Bitcoin mining software "ASICs" is just not expensive to get, it's not cheap to run either as it consumes a tremendous amount of electricity.

You would then be required to download Bitcoin mining software, once the software is installed, you can start mining. As you have entered the Bitcoin's world as a miner, you have 10 minutes to mine a block. If you are clever enough to resolve the mathematical puzzle before the 10 minutes are over, you would have to deal with more complex problems to bring back the mining time to 10 minutes. Just as we have mentioned-above, the moment you add a block to the blockchain ledger, a new Bitcoin will be created and you will be reliable to receive a "Bitcoin reward".

Bitcoin mining is not profitable for all even if we end up putting a block in a blockchain ledger successfully. The software that is used for Bitcoin mining consumes more electricity than 500,000 Playstation 3 devices. It would only be considered profitable if the miner makes more money than the hardware, software cost and the electricity charges.

In brief, Bitcoin mining is a computerized process that is performed using an expensive software called ASICs. The miners are made to resolve a complex mathematical problem and add a block to the blockchain ledger with the approved transactions, a new Bitcoin will be created and the miner would be rewarded with Bitcoins for the hard work.

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