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What is Bitcoin mining? A Step-by-Step Guide

What is Bitcoin mining? A Step-by-Step Guide

  • 23 September 2020
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In answer to the question of “What is Bitcoin mining”, we should say that it is the process of verifying cryptocurrency transactions and registering them in the ledger of the blockchain network.

BTC is digital money and also a general agreement network that gives the authority to users in that network, to have a new process of paying system.

If we say “What is Bitcoin”, it is the pioneer of a decentralized payment network which means the control of its activity is not under a single authority.

Its network is peer-to-peer and can do its activity in a particular way by online users. BTC for its users is such as cash through the Internet. The smallest quantity of a BTC is Satoshi. The value of a Satoshi is 0.00000001 BTC. Satoshi Nakamoto is the unknown inventor of this digital coin.

A BTC as a digital token has no physical banking support. Users can send them electronically via the internet to other users with no boundary restriction. BTC network not similar to common banking payment networks runs by a distributed network of computers around the world and all the business contracts of BTC are sustained by that network.

These computers are continuously updating the registration of all BTCs buying and selling information in a chain of blocks which is recognized as the blockchain. Blockchain is a public ledger that is a system of recording transactions. This causes it very difficult to alter, crash, or fraud the system.

What is Bitcoin mining?

BTC mining is a process that generates new Bitcoins. For generating Bitcoins, it needs to spend computing costs to process transactions. Computers involved in BTC mining are a kind of computing competition for processing new transactions in the network. The person with the fastest computer gets more BTCs as called the winner.

Miners operating distributed in all countries can be considered as BTC data centers, having to say that no one has control over the network. Thus, Bitcoin mining will still be necessary until the last BTC is released.

In general, BTC mining is the process of verifying cryptocurrency transactions and registering them in the ledger of the mining network.

Verified transactions aggregate in blocks is quite simple. For adding these new blocks to the existing blockchain, there is a coding hash that is highly complex and needs to be solved. For instance, any Crypto miner system that solves this problem will take coins as a reward. BTC uses the SHA-256 algorithm for the mining process.

What is a Bitcoin miner?

In the early days of releasing BTC, anyone could mine a new block using their computer’s CPU. The more people involved in the mining, the harder it became to mine the new blocks. So far, the only way to mine Bitcoins is to use specialized hardware.

Special computer chips called ASICs and more progressive processing units such as Graphics Processing Units (GPUs) can win more coins as prizes. These precision mining processors are known as “mining rig.”

What is a Bitcoin miner?

The bitcoin miner is a term used for cryptocurrency mining devices. Currently, these devices are very diverse. People around the world who mine cryptocurrencies like Bitcoin or altcoins are “Miners”. They try to use a variety of bitcoin miners to gain more mined crypto coins and sell them to make a profit.

In many countries of the world, buying Bitcoin is gaining new fans every year. For example, they use cryptocurrencies as a means of payment, money transfer, and investment. In the meantime, some people thought of mining Bitcoin themselves. The miners use Bitcoin miner devices for Bitcoin mining via the internet.

For the first few years, for instance, when the difficulty of the mining network did not increase, it was possible to mine cryptocurrencies with standard computers that included standard Intel or AMD CPUs and standard graphics cards. But these days, bitcoin mining with these tools has become almost impossible because we need an advanced and special Bitcoin miner.

What are the factors influencing bitcoin mining?

One of the most influential factors in bitcoin mining is the nodes. These nodes scatter transactions across the network and data flow between nodes. Some new users speed up the mining process by introducing new nodes to the cryptocurrency network. Some nodes do bitcoin mining that is usually called a bitcoin miner.

The bitcoin miner accesses a hash by solving complicated mathematical problems and placing it in the block answer. For instance, when the first miner can reach the hash answer, its success is reported to the other network nodes.

With this news, all the other miners instantly stop working on that block and try to find it in the next block. The winning miner receives BTC as a reward. This is a very complicated mathematical process that is becoming more difficult to solve every day.

There is no hassle-free way to make money through mining because of the hard-work it needs. Making money through Bitcoin requires the following options:

  • Spending time,
  • Money to buy miner devices and mining equipment,
  • Course training and gaining experience.

If the difficulty of bitcoin mining and the cost of Bitcoin miners are not a problem for you, there are three steps to enter the world of miners:

  1. Buying one or more bitcoin miners,
  2. Use a safe and convenient wallet,
  3. Join a pool to perform the extraction process.

To buy miner devices, you must first consider the power of these devices, which is measured by the hash rate. It is usually based on the Terahash per second (Th/s) or its Gigahash per second (Gh/s). Naturally, the high value of this index indicates the power of the BTC miners, and as a result, it performs calculations more quickly and increases your chances for bitcoin mining rewards.

Ant miner the most efficient bitcoin mining machine?

Before we talk about Ant miners, we need to know about ASIC Miner first. As explained in an essay about ASIC miners, briefly, ASICs are integrated circuits with a specific application, doing nothing but mining cryptocurrencies.
Ant miner is a type of ASIC bitcoin miner offered by Bitmain Company and includes various models.

Ant miner the most efficient bitcoin mining machine?

For example, some of the most popular of them are introduced below:

  • Antminer S15, Antminer S11, Antminer S9, and Antminer S17 support the SHA-256 algorithm. With these devices, you can mine some coins like Bitcoins, Bitcoin caches, BitTorrent tokens, and Devcoins.
  • The Antminer Z9 mini, Antminer Z9, and Antminer Z11 support the Equihash algorithm. With these devices, you can mine Bitcoin Gold, Zcash, Bitcoin Private, Komodo, and Zen Equihash coins.
  • Bitmain has designed L3 and L3 ++ Antminers for the Scrypt algorithm, which is suitable for mining Bytecoins, Dogecoins, Digibytes, and Gold coins.
  • The Antminer D3 supports the X11 algorithm. With this Antminer, you can mine Dash, Onyx, and some other coins.

The Antminers as one kind of BTC miners have advantages and disadvantages. For instance, their pros and cons are as below:
Advantages:

  • There is no need for a very high power supply.
  • Setting up devices is easy.
  • It usually has a good and acceptable performance.
  • It is almost easy to carry.
  • Usually, it doesn’t need additional components.
  • It doesn’t need to update these devices constantly.
  • It has acceptable energy consumption compared to other devices.

Disadvantages:

  • The cost of maintenance is almost high.
  • It makes a lot of heat and noise.
  • The number of specialists for repairing devices is low.
  • Each device supports specific algorithms.
What is Bitcoin Investment?

Bitcoin prices are constantly rising and falling irregularly. The free market decides how much crypto is worth.
BTC exchanges determine the Bitcoin price by the offer in the open market. This is exactly the way in which players determine stock prices and gold by bidding on the stock exchange. For example, bitcoin price hits $13K at the moment due to the overweigh of Bulls over Bears.

What is Bitcoin Investment?

Bitcoin’s advantage

  • Any user can buy and sell BTC anyplace around the world at any time and there is no banking holiday.
  • There is no charge for receiving BTC, and you can monitor how much you pay in your payments via many wallets permits. Higher costs can support faster verification of your business deals.
  • Bitcoin deals are secure, non-refundable, and do not contain delicate or private identification. This, for instance, defends traders against fraudulent losses or counterfeit recharge.
  • Anyone can easily check and use all BTC money supply information in real-time in the blockchain.

Bitcoin’s disadvantage

  • Many people still do not know about BTC and still do not use it for transactions
  • Currently, the whole value of BTC in transmission and circulation is extremely small.
  • The whole number of businesses and occupations using BTC is yet very low.
  • BTC software still has flaws and its active version is in beta which needs much work to have more security and access for the people.
Conclusion

The article concludes that many BTC analysts presume that digital currency is the future. Many of those who support BTC believe that the process of paying the system will be extremely faster, with small-fee for deals around the world. Even though BTC does not have the support of any banks, it can be exchanged with fiat currencies.

Indeed, its interchange rate versus the dollar is high and this condition offering financiers and traders of interest in Bitcoin cryptocurrency investing. Certainly, one of the initial reasons for the progress of Bitcoin cryptocurrency is that it is able to act as a variant alternative to the national currency and common goods like gold.

People who ask “What is bitcoin earning way”, they can get crypto in several different ways. For example:

  • By taking it from rendering goods or services.
  • With buying BTC in encrypted currency exchange.
  • By exchanging BTC with other cryptocurrency owners.
  • With earning digital coins through various cloud mining methods.

As a result, any online user can access a BTC address and initiate sending and receiving the coins with no need for a name or identification.

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