How does Bitcoin Mining Work?
- The bitcoin mining process involves solving complex mathematical calculations that consume high electricity and require special powerful computers. The miner that becomes able to find the solution to the problem first is awarded the bitcoin, and this process of guessing the correct solution (hash) is known as proof of work. The miners must guess the valid number as soon as they can using powerful computers; this process becomes more complex as new miners add to the network.
- All these calculations can be done by computer hardware called ASICs (Application-specific integrated circuits). This computing hardware is quite expensive and can cost around $ 10,000 or even more. Also, this hardware is highly power-consuming, and thus, many environmental activists are against bitcoin mining.
- As a miner gets successful in adding a bitcoin to the blockchain, he receives 6.25 bitcoin in return. For example, if a bitcoin is available to trade at $ 10,000, the miner will receive $ 62,500.
What is bitcoin mining? How does it work?
Cryptocurrencies are one of the most advanced pieces of technology, attracting investors throughout the globe. Among these cryptocurrencies, Bitcoin is one of the most popular ones. It’s a simple digital currency that works on a decentralized network and doesn’t involve any financial institution or government. Bitcoin turned out to be quite profitable for many people. However, investing in bitcoin has many downsides, too, like its prices are very volatile, and still, it’s not accepted as a currency in most parts of the world.
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