What is Bitcoin Mining?

What is Bitcoin Mining?

Creating Bitcoin

  So, in my previous Article we talked about what Bitcoin is and how disruptive Bitcoin is and will continue to be. The creation of bitcoin is what we call mining. If you where looking into Bitcoin Mining before you might have an idea or knowledge what it is.  Mining is a crucial part of the creation of bitcoin including the verification process of bitcoin. This is to ensure that SHA HASH is correct and not corrupted. Explaining the SHA HAS we can do in a following article when we will talk about Blockchain.  

WHAT IS MINING?

The act of mining creates Bitcoin and many other digital currencies. The members of the network provide their computational power for calculating mathematical problems, and for this effort they are rewarded with currency units. In the Bitcoin network, there is a daily global reward of 1,800 Bitcoins distributed to the miners. However, the more people that are mining, the more competitive it gets. Computers are good at solving equations, so the networks create more difficult problems by the minute. There are already numerous types of specialised hardware on the market that have been designed specifically for digital currency mining. Thanks to our great strategic partnership we get a better price than any other mining Companies as our Partner is buying the hardware on large scale with better prices. Low maintenance costs, cheap electricity and little or no need of cooling and mining farms all over the globe makes us very compatible.  

Difficulty of Mining

The difficulty of the calculation (the required number of zeroes at the beginning of the hash string) is adjusted frequently, so that it takes on average about 10 minutes to process a block. Why 10 minutes? That is the amount of time that the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million is reached (expected sometime in 2140).   If you’ve made it this far, then congratulations! There is still so much more to explain about the system, but at least now you have an idea of the broad outline of the genius of the programming and the concept. For the first time we have a system that allows for convenient digital transfers in a decentralized, trust-free and tamper-proof way. The repercussions could be huge.  

The term “The Halving”

A programmed feature in the code, the bitcoin subsidy controls the supply of new bitcoins that are released into the market with each new block. When bitcoin first launched, a miner could earn 50 BTC for sealing a block on the blockchain ledger. After 210,000 blocks, or approximately four years, however, the reward was cut in half to 25. As block 420,000 is sealed, miners will be left with a reward of 12.5 bitcoin. As currently set, only 21m BTC will ever be mined, a figure that would require the consensus of all or most bitcoin users to change. Because the figure does not vary or become irregular, there is a steady, predictable supply of new bitcoins. To traders, this has quelled some uncertainty regarding how many new bitcoins could suddenly appear for sale, and to miners, it has provided a steady incentive for them to continue maintaining bitcoin’s ledger. Complicating matters, however, is that not all traders are altruistic and that mining costs money, and since bitcoin’s price impacts other areas of the ecosystem, some believe this delicate balance could be altered by the halving.  

Summary

Mining Bitcoin for the present and foreseeable future will still be highly profitable. It is said that a Bitcoin Mining server profitability is 8 Months before it need to be upgraded. This is the difficulty as speed and computing calculation power increase to stay up with the Jones of the mining industry. Bitcoin is only 9 years old, so we only seen 2 of “The Halving’s” happen. Which shows once again we are getting into the toddler era of the bitcoin lifecycle. There are mainly 2 ways to approach mining one is through Cloud Mining and the Other Pool mining. Personally, I partake in both. Take action and start mining and share in a consistent stream of reward.           Start Bitcoin Mining what-is-bitcoin-mining