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Bitcoin Mining 2018: What You Should Know About It

bitcoin mining
bitcoin mining
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Bitcoin Mining 2018: What You Should Know About It

Since its invention in 2009, Bitcoin has enjoyed an insanely high and constant increase in value annually. This is large because, simply speaking, many people love it, but also because although it is a decentralized currency, having no central governing body, it has an organized and well-managed system. So how does a digital Internet currency without a central overseeing body ensure its continuity and order? Through a process called “Bitcoin mining.”

Bitcoin mining generates new Bitcoins into circulation, while also keeping an eye on the large volumes of Bitcoin being sent and received all over the world. Mining is equivalent to printing paper money. In order to generate new Bitcoins, a very complex math puzzle is to be solved by the miners. Now, this process is intentionally designed to be expensive, time-consuming and difficult and mining new Bitcoins gets increasingly difficult as more are mined. Previously, Bitcoin mining was so easy and could be carried out on desktop computers with normal processors, but currently, requires specially designed software and high-tech hardware to solve these complex puzzles. These puzzles are so complex that solving them takes a tremendous amount of computing power and electricity, hence very expensive, especially if a miner works alone. Therefore, upon successfully solving a puzzle, a miner is rewarded with a generally agreed-upon incentive. This bounty currently is 12.5 bitcoins; it is halved every 4 years, so back in 2009 when Bitcoin mining was much easier, with much less competition, miners were rewarded 50 bitcoin.

Whenever a Bitcoin transaction is made, it is recorded somewhere called a Blockchain, in a queue. For fairness and security, every transaction in a Blockchain is verified by miners who are paid a mining fee that is included in the transaction. The mining fee is for the services rendered by the miners. So should a miner fail to solve complex puzzles, this is an alternative source of reward. It is also necessary to note that miners, who verify Bitcoin transactions, also check on themselves to prevent error or fraud.

If you want to get involved in Bitcoin mining, you will have to decide to either mine alone or in a pool, which is a network of miners. But due to a constantly increasing cost of mining and a corresponding decrease in mining profit, joining a pool is much better. In a pool, the miners share the reward of their efforts. There is also a method of Bitcoin mining known as cloud mining, which enables the pool of miners to be located at different individually remote geographical locations and still successfully mine. All the miner has to do is connect to the web cloud, even without having an individual remote desktop software, hence reducing electricity consumption and overall mining costs. The CoinMyne’s software is one such means through which hundreds of thousands of miners work in a cloud. Using mining applications such as CGremote, one can manage many miners in one place, even if they are in different locations. It is with such software, and much more still being developed, that the future of Bitcoin mining has a guarantee of profitability. And although cloud mining may sometimes be shady, and reduce profit, it is pretty efficient.

Related: A BEGINNER’S GUIDE TO BITCOIN MINING 2018


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About the author

Tayyab M

I love to talk about global tech-happenings, startups, industry, education and economy.

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