Bitcoin

Bitcoin – Mining

With bitcoins, the process of creating the currency is called mining. bitcoin miners use specialized software and hardware to verify bitcoin transactions and solve complex math problems and receive a certain amount of bitcoins in return. this is how bitcoin currency is issued and anyone can mine bitcoins. we can use mining to create or earn our own bitcoins. Currently, a successful miner is rewarded with 25 bitcoins for each new block that is created approximately every 10 minutes. this mutually agreed value will be halved every 210,000 blocks added to the chain.

Bitcoin mining involves verifying and adding transaction records to the public ledger of past bitcoin or blockchain transactions. the blockchain is used to confirm that transactions have taken place on the rest of the network.

Reading: Bitcoin mining tutorial

Bitcoin nodes use the blockchain to legitimize or validate genuine bitcoin transactions and prevent double spending of bitcoins, i.e. stopping the spending of coins that have already been spent elsewhere.

Bitcoin mining is deliberately designed to be resource intensive and difficult so that the number of blocks mined each day by miners remains moderate and constant. individual blocks are also required to contain a proof of work to be considered valid. this proof of work is verified by other bitcoin nodes every time they receive a block. bitcoin uses the hashcash proof-of-work function for its operation.

The main purpose of mining is to make it easier for bitcoin nodes to reach a secure and tamper-proof consensus. mining is also the mechanism used to introduce bitcoins into the bitcoin ecosystem: miners earn (if any) transaction fees, as well as a “reward or bounty” of newly created bitcoins.

This serves both to distribute new coins and to motivate people to protect the system.

proof of work

A proof of work is a piece of data that took a lot of time and resources to produce to satisfy certain requirements.

Producing a proof of work is usually a random process with low probability, and a lot of trial and error is required before generating a valid proof of work. bitcoin uses the proof-of-work hashcash type.

See also: Cryptocurrency Statistics 2022: Investing In Crypto | Bankrate

In addition, the miner receives the transaction fees paid by the users. the fee is a sort of incentive for miners to include the transaction in their block. going forward, fees will constitute a significant percentage of mining revenue.

There are two main types of mining: single and pool.

solo mining

solo mining is done alone or on your own. With a regular desktop or laptop setup, it would take years to earn real bitcoins, as mining requires enormous computing power.

pool mining

The second method we can use is pool mining. It involves signing up for an account on any of the different bundling sites. Using their software and hardware, these sites pool the mining efforts of many people’s computers. each person in the group receives a small amount of bitcoins as their share as a reward. for individuals, pooling is preferable to solo mining.

bitminter

bitminter is a bitcoin mining pool that aims to make it easy for anyone to make bitcoins. it is one of the oldest pools. Since its opening in 2011, more than 450,000 people have registered accounts with it. In the earlier period, cpus and gpus were used for bitcoin mining. now we need to have specialized application specific integrated circuit machines (in short asic) for bitcoin mining. the speed of these machines is given by their hash rate, which is currently on the order of tera hash/second or t h/s.

asics took over mining in 2013. mining just one bitcoin with a normal computer would take a lot of time. you will need a 1 th/s or faster asic machine to start a small mining operation at home.

using bitminter to mine

Below is the process to use bitminter for mining −

Step 1: First, we register on the bitminter site using our google or yahoo email accounts and then confirm our email id by clicking the link on our mail received from bitminter.

See also: Crypto Mining Warehouses vs. Crypto Mining at Home | Gemini

Step 2: We set up a worker account with a worker name and worker password in addition to the username created when creating the bitminter account. We link the bitminter client to the worker’s account.

step 3 − then we log in by filling in the account details as shown below.

BitMinter

Step 4 − After this by opening the BitMinter Client application, we get following console as shown below −

BitMinter Client Application

Step 5 − We press the Engine Start button to start mining. We have to ensure that our machine clocks a hashrate speed of atleast 25 million hashes/second or 25 M H/s.

Step 6: We’ll also need to change some settings related to automation. we can leave our machine on all day and all night.

step 7 − we can go to settings > options to change this setting. automated devices is a list of devices that you configure to start automatically when the software starts.

Step 8: We will let our machine run overnight, which will increase the chance of generating more bitcoins.

mining secures transactions by finding random strings that cause the block to become a value with many leading zeros. the more zeros, the harder it is to crack. mining bitcoins does not mean finding new bitcoins; these are awarded by the network for completing the validation of all pending transactions in a block and solving some complex math puzzles.

ways to earn bitcoins

the best way to earn bitcoins is to find and execute work paying in bitcoins. we can buy the bitcoins too. Lastly, if we want to earn them the hard way, we should opt for mining. to mine bitcoins, we can buy cheap hardware on sites: ebay.

See also: Donate Bitcoin and other Cryptocurrencies | Save the Children

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