Bitcoin (BTC) is a digital currency, which is used and distributed electronically as a decentralized peer-to-peer network. This means no single institution or person controls it. Bitcoin can’t be printed and the supply is very limited – only 21 million BTC can ever be created.
What is Bitcoin Mining?
Bitcoin mining is the process of confirming transactions on the Block chain (each block contains some data, the hash of the block and he hash of the previous block). Bitcoins are based on extremely complicated equations. These puzzles are programmed into the source code for Bitcoin and when a new equation is released, then, computers around the world are all up in a rush to solve it. Unlike banks, Bitcoins do not have a central register and their strength is derived from a distributed ledger (a block chain).
The blocks on the block chain consists of details for every transaction in the currency’s history. As new transactions take place, they have to be put in blocks and added to the chain. A new block roughly contains close to two and a half thousand new transactions and for a new block to be validated each one contains the answer from the puzzle to the last block. Eventual success in the completion of each equation earns the miners 12½ freshly released Bitcoins.
Of worthy note is the fact that the more computing power and computers that mine the Bitcoins, the more secure the network becomes from theft and cyber attacks. The Bitcoin miners process transaction in that when a person sends a Bitcoin to another person, a miner verifies the legitimacy of that transaction before it then gets added to the block chain (a ledger of all Bitcoin transactions in existence). Bitcoin mining on computers make them operate in high heat levels which can cause damage to the fans and crash the system.
HOW TO MINE BITCOIN?
Mining Bitcoin can be done using any computer, even the oldest laptop you own and you don’t have to purchase an expensive equipment to start mining so therefore, you can start mining at home. To mine Bitcoin, you would need a computer with good internet access and it is always advisable to use a computer that is not doing anything else and would be solely for mining because mining alone would be very demanding on the computer and it slows it down. It is best to keep the computer cool by using a good cooling device to avoid overheating the system.
In 2009, when Bitcoin first started out, there weren’t a lot of miners. This was done with personal computers using the CPU (central processing unit) as it was enough for mining back then. As Bitcoin became a fuss, more mining power solutions came up as well. Then people graduated to GPU (graphics processing unit) mining; a GPU is a special component added to computer systems to carry out more calculations of complex status. They were intended to help gamers run computer games with intense graphics requirements and because of their construct, they became widely known in the field of Cryptography and around the year 2011, it became a mining tool. The mining power of one GPU can be amount to that of around roughly 30 CPUs.
Thereafter, FPGA mining came around; it is a hardware piece that can be connected to a computer to run a set of calculations. It is similar to a GPU but runs 3-100 times faster. They are harder to configure which is why they are no common among miners as GPUs. By 2013, a new breed of mining power came up; the ASIC (application specific integrated circuit) miner. These hardware pieces were solely manufactured for the purpose mining Bitcoin and unlike CPUs, FPGAs and GPUs; it can only be used for mining as their function is hardcoded into the machine. The ASIC miners are the current mining standard.
As a new miner just entering the mining game, you are up for some serious competition even when you purchase the best mining power you tend to remain on the losing end to professional Bitcoin mining farms. This is where the idea of mining pools came up; mining pools are miners put together to form a pool. To compete more effectively, they combine their mining power. If the pool manages to solve the puzzle, the reward shared within the pool members depending on the mining power contributed by each of them.
THINGS YOU NEED TO START MINING