As we know that Bitcoin is electronic money that is only available digitally and not in the hard format. You need wallets to store your Bitcoins and to perform transactions. One can perform various operations on this cryptocurrency. You can exchange, buy, sell or even trade Bitcoins. But what we are going to discuss here is mining.
With this, the first question that will land in your mind is how can you mine a cryptocurrency? The would-be why’d you have to mine them or how to mine Bitcoin. In this article, you will get answers to all your Bitcoins related questions.
What is Bitcoin Mining:
Bitcoin is a digital currency, operating without a central authority. This cryptocurrency is generated through an algorithm and can be stored and transferred from one wallet to the other. As per the algorithm, there are more than 21 million Bitcoins available in the market. If you want bitcoins then you need to get new ones. To get these new Bitcoins, one has to solve an intricate computational algorithm. This whole process of fetching new bitcoins by solving a complicated puzzle is called bitcoin mining.
Bitcoin mining is the only technique of bringing the new Bitcoins into circulation. The first block of Bitcoins was founded by the founder Satoshi Nakamoto himself. With this, we can also say that investment and trading will still exist without Bitcoin mining however, the investors or the traders will not be able to get any new Bitcoin into circulation.
How To Mine Bitcoin:
The process involves using technically advanced computers to solve extraordinary calculations. You need to set up a mining rig loaded with an application-specific integrated circuit (ASIC) or GPU (graphics processing unit) to perform the task efficiently. Bitcoin mining is also involved with the maintenance and development of blockchain ledger. The miners have to add individual blocks of 1MB Bitcoin to the chain hence it has got the name ‘blockchain’.
As mining introduces new cryptocurrency into circulation it becomes very much beneficial for traders and investors. Though the technique is exceptionally confounded and expensive, it is worth performing due to the fees the miners get. This is making Bitcoin mining extremely popular among computer professionals. Some of the times the investors also reward the miners with crypto tokens, which makes the whole process beneficial for the miners. The payments that the miners receive in the form of Bitcoin is just to motivate other miners to help the traders or investors make the complete process of solving the puzzle easier.
If you think that you are interested in investing or trading in Bitcoin and simultaneously you are technically sound then you can certainly go ahead and take a dip in Bitcoin mining. This will not just help you get new Bitcoins but also increase your Bitcoin funds, which you can later use as per your requirement.
You don’t always have to mine Bitcoins, you can also get them from the exchange. At the exchange, you just have to pay money and get your cryptocurrency. You can also get with the help of the buyers or sellers who deal with Bitcoins. This is what brings us to the major advantage of Bitcoin mining. With this, you do not have to buy these cryptocurrencies from the exchange. And if you will become the miner you will also save the Bitcoin to which you have to provide to the professional miner. As none of the central authorities operates Bitcoin, anyone all across the globe can perform the task of Bitcoin mining. This is what makes the task of the miners even tougher when hundreds and thousands of professionals are working in the same direction of solving the puzzle and consistently in the race of getting more and more Bitcoins.
Miners don’t only have to mine Bitcoins but also keep a check on the ‘double spending problem’. As we all know that Bitcoin is an electronic currency however keeping track of it becomes more difficult than the hard currency. When you are spending the hard currency you give money to the one who is delivering you services. On the contrary, things become a little complicated with digital money.
‘Double spending problem’ is the situation where an investor spends a Bitcoin twice or even more than that to make a purchase. This can happen by mistake or even as a fraud. The investor can copy the Bitcoin token and generate Bitcoins and make fraud with the other party. To avoid the same miners also had to work as auditors. Here they have to make sure that the mined cryptocurrency is legal. Also, they have to keep track of the findings of the same. To perform this task the miners can check the transition account of the investors as well. Hence while deciding on the reward of the Bitcoin miners, the investor, trader or the one who hires them, keep all these works in mind.
Satoshi Nakamoto has set a 1MB limit to each block of Bitcoin. This means every time the Bitcoin miner verifies at least 1 MB wealth of Bitcoin transactions, that miner will instantly become eligible for the reward. The other condition which the miners have to fulfil for the reward is by giving the proof of work. This means that you should be the first miner and also the closest to the answer to the puzzle.
Take Away:
Bitcoin mining is a tricky process that involves solving a huge puzzle. However, the reward miners get is what makes it worth putting the efforts in. Later on, these Bitcoins are given to the investors and traders to make a good profit from the same. If you believe that you are not a technology expert and still you want to make good money then Bitcoin trading should be your thing. You can visit the website of Bitcoin Revolution, download the software and give a start to your trading game. Bitcoin Revolution is a technically advanced, user-friendly and secure trading platform. Anyone who is not an expert in computers can easily perform trading operations through this software. Get yourself registered today and enjoy Bitcoin trading.
Risk Warning:
Investing is not suitable for everyone; please ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Please conduct your own due diligence.
