Bitcoin is the new-age digital currency that has grabbed the attention of not just Millennials, but enterprises at a global level. The worth of a single Bitcoin is volatile, however in the current time, as stated by Yahoo Finance, the worth of a single bitcoin is $45,000.
As mentioned, it is subject to change, so tech-experts predict that it may surge to above $190,000.
Voila, that is the most interesting part.
Now coming back to the topic, the price of Bitcoin has increased the interest built around it as well. The search related queries for Bitcoin has also increased on Google, which shows people are more inclined to try their hands at this technologically advanced mining system.
With this blog post, let’s understand more about bitcoin mining. Just scroll this post further…
What is bitcoin mining?
To start with, you must know that Bitcoin mining is the process that ensures that bitcoin functions as expected, while adding new supply into the market.
Largely, miners are individuals or companies that contribute computing power to assist in the process of maintenance and operating the blockchain network. In simple words, Bitcoin is digital money, with no connection with any type of real-world currency.
It is not controlled by any government or any other centralized authority. However, it can be used to purchase real-world items at major retailers.
However, to ensure there is no security glitch happening within the traction process, here different entities are known as miners compete to solve mathematically complex problems. Every miner who successfully solves the problem adds a block to Bitcoin’s blockchain and gets a reward of 6.25 bitcoins.
How does Bitcoin mining work?
To make this happen, miners are required to solve complex math problems to verify the transaction of bitcoins. This is further added to a chain of other verified transactions. This process gets completed with the help of a cryptographic hash- a one-way encryption tool.
Here, further miners need to figure out the input data and cycle through every single possible combination, which ensures the result matches the hash. The outcome is used as an identifier for the block, that further protects it from being tampered with.
Steps to initiate Mining Bitcoin
There is no rocket science behind it, but a set of simple steps to be considered, and here is a way to do it.
- Calculate profit rate, as the primary expense is based on the cost of electricity and mining hardware. On the flip side, the profit will also be based on Bitcoin’s value, which is volatile.
- After vetting out the initial expense, the next expense comes to spend in the mining hardware, which can cost you anything from several hundred to several thousand dollars, depending on your selection and requirement.
- The mining software options are various in the market; the only factor you need to remember is which platform can bring you the better result.
- Then you need to install a Bitcoin wallet, where you can store bitcoins, once you mined them. In this digital wallet, you can store your bitcoins in “the cloud” but they are vulnerable to cybercriminals. Within offline wallet stores bitcoins are safer as there is no connection with the internet.
- Next, you need to enter a mining pool to improve the success rate.
- On the completion of the aforementioned steps, the next thing suggests you are ready to mining. Get started: Once the previous steps are complete, you can start mining.
Is it possible to make money from bitcoin mining?
It is a very tricky question because from the very first look it seems simple and eventually the profit-making is easier. As per a report, Bitcoin generates over $100,000 worth of value every 10 minutes.
On the other hand, you should not forget that the profitability factor of Bitcoin’s mining largely depends on the cost of electricity. So the payment made to bitcoin mining depends on the electricity rate in a specific region, which can help you calculate the accurate profit.
On an honest note, the future of bitcoin mining is uncertain yet exciting. Miners need to enhance the chances of its growth, by including the best computing power. It is very much likely that competition will increase while boosting the reward as well.
Technology is the future that would definitely dictate the world in and around us, the only thing you need to be sure of is the utilization of the right technology to pave the right passage.