Nobody can talk of Cryptocurrency or Blockchain technology without mentioning Bitcoin. Of course, Bitcoin was the first Cryptocurrency to be created on this planet. We cannot talk of Bitcoin without mentioning Mining Bitcoin because the latter is the mother. In a simplified language, it is the process of creating or producing Bitcoins from the computer or any other able device. However, this article will go deeper to give an overview of Mining Bitcoin, and how it goes on.
To invest in Mining Bitcoin, and remain profitable, one needs to be prepared with the required equipment and resources. It requires heavy and powerful devices and cannot be run at home. There needs to be cooling and storage space. To start, one needs, to have a miner, bitcoin wallet, mining pool, and program.
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Mining Bitcoin
It is a concept where Bitcoin transactions are updated on a ledger called Blockchain. That process is known as mining and those behind it are called Miners. It is achieved by running complex arithmetic puzzles in a powerful computer otherwise known as ASIC to guess the desired number. The Miner who gets the number first updates the Blockchain. The Miner is in return compensated by the mined coins. The current value per one mined Bitcoin or one solved puzzle is 6+ Bitcoins. As said earlier, the mining is done through guessing via a computer. Remember, the more guesses a miner makes within a second, the more chances of getting it right. That is why a powerful computer becomes necessary. After getting it right you go to the next digital ledger page on the Blockchain. The amazing nature of Mining Bitcoin is how it becomes easy to validate but very difficult to solve the equation. The computer carries the key on which transactions are to be inserted in the ledger (Blockchain) once it solves the complicated puzzle.
What Next?
Once a new block is compiled, an update is sent to the transaction ledger. The information is then sent to other computers for authentication and validation. As the process is done in different computers they automatically do the same with their transaction ledger. Remember, as previously said one right guess is equivalent to 6.25 Bitcoins and is passed over to the miner to cater for energy/power or time used. Not that alone transaction fees also is another boost to the miner. The confirmed blocks are encrypted in the Bitcoin network and cannot be reversed.
The Amazing Part
It should be understood that the more miners are using the Bitcoin Network to mine, the more complicated the guess becomes. That was the secret, the founder, Nakamoto had in mind as he created the network. He never wanted the issue of over flooding the market with valueless Digital coins to become a bother. Therefore, as the demand and price of Bitcoin go up the more difficult it will be to solve the equation because more miners will come in. That is how the term Mining Difficulty came in. To keep the process in check, there is a readjustment that occurs after the creation of every 2016 Blocks.
Mining Bitcoin requires a lot of power therefore, before embarking on the venture it is important to evaluate the power source. The inflation challenge is put on check through Mining Difficulty. In summation, it is important to note that there are a lot of processes involved in producing a single Bitcoin.
