Released in the year 2009 by a pseudonym Satoshi Nakamoto, Bitcoin is an open source decentralized cryptocurrency that is used to make peer-to-peer transactions it between two parties securely. You can purchase Bitcoin from renowned online cryptocurrency exchanges or do Bitcoin trading.
The process of adding transactions on the blockchain by solving complex cryptographic problems successfully and create new Bitcoins is known as Bitcoin mining.
How does Bitcoin Mining Works?
The best part of cryptocurrency is that they are decentralized no central authority or government. Cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, Ripple, Monero, Zcash, and Dash works on the blockchain technology. When talking about the blockchain, it is a public distributed ledger that records or keep a track of all transactions that has been ever made on the network. The blockchain keeps a track of each user that owns the Bitcoins or other altcoins.
The new transaction gets added on the end of the blockchain and then it is confirmed through complex mathematical computations by specialised computers of the miners on the cryptocurrency network.
On successful placing a valid block, miners get rewarded with a definite amount of Bitcoins for their mining efforts.
When a number of transactions are made on the network then they are bundled in a block. A block is finalized in every 10 minutes on the network.
At a time, when a computer solves complex cryptographic equations of a block and get an effective hash key so it is added to the blockchain verifying peer-to-peer Bitcoin transactions in between the users. However, at the same point of time, it also rewards miners with a definite amount of Bitcoins.
Keep in mind that it might take some time to get mining rewards as the first miner solving the block by searching numerous valid hash keys is the one who get rewarded with new Bitcoins.
Bitcoin Mining is Not an Easy Task
In the initial days from 2010 to 2011, it was easy to mine Bitcoin. At that time, a common PC or computer was enough powerful or efficient to mine dozens of Bitcoins using a CPU or GPU.
However, the scenario is completely changed today.
Automatically, the cryptocurrency regulates with the mathematical problem difficulty and as a result Bitcoins are received as a mining reward.
In case, plenty of people connects with the Bitcoin network for Bitcoin mining, then the Bitcoin mining difficulty will increase. It is known as hashing power or hash rate. On the contrary, if a few people ask for Bitcoin mining, then the mining difficulty will decrease.
In every four years, Bitcoin mining reward adjusts and the amount of coins got half.
Specialized Computers are required for Bitcoin Mining
Currently, specialized computers’ invention that are solely made for mining increased the mining difficult of Bitcoin.
These specialize computers mine 24/7 and perform hundred times faster computations that are required for mining as compared to a standard PC.
It can be mined alone or by joining a mining pool, however the fraction of Bitcoin received by the miner will not be enough to bear the electricity charges.
In the earlier times, when the Bitcoin network just started, it was quite easy to mine the Bitcoin; however, at present, it requires specialized computers.
Owing to the way Bitcoin is coded, the total limit or market cap of Bitcoins is 21 Million.
At the point of time, when Bitcoin limit is reached, after that no Bitcoins can be created.
A Bitcoin can be divided in the eight decimals, such as 0.00000001BTC in order to purchase small goods by using this Bitcoin’s fraction.