This article, entitled Bitcoin mining explained, will focus on answering the now more than ever important question of what is Bitcoin, how to become a Bitcoin miner, and how many Bitcoin can you mine in a day. Bitcoin, with all its applications, the hype surrounding it, and its increased use; Bitcoin is becoming more and more an integral part of our lives and with it comes many questions such as what is Bitcoin mining?
Bitcoin Mining Explained
As the technology emerged, many of its key concepts and features remain obscure, particularly when it comes to the new coined term mining. This article will deal in Bitcoin mining explained.
Bitcoin mining is the process during which miners resolve a complex mathematical problem to acquire the rights to confirm a block of transactions on the blockchain. This is called Proof of Work or PoW. After validating a new block a Miner would typically receive a reward in the form of new Bitcoins being created and a transaction fee for every transaction processed in said block.
Bitcoin mining was created to validate the transactions as on the Bitcoin blockchain there is no central authority or intermediary, like banks, to validate and record transactions. Instead a miner is chosen among all the nodes and that miner approves the transactions present in a block. This system allows for more impartiality, making fake transactions hard to process as a cheater would need to control the verification process to fabricate transactions, something made harder the more miners were present on the blockchain.
Bitcoin miners don’t manually solve the problem but, instead, rely on high-powered computers to solve the complex equation in their stead.
How to Become a Bitcoin Miner?
With so much technicalities and know-how apparently in the works, Bitcoin mining may seem like a dauntless task but fear not, this article will explain how to become a Bitcoin miner.
To become a Bitcoin miner is as easy as a getting a Bitcoin Wallet, downloading a software, and pressing start. Now while it may be as easy as that it does not necessarily mean that it will be profitable.
In the early days of Bitcoin mining, miners used their laptops and desktops to resolve the mathematical equations but as mining became more interesting more people joined in and mining became more competitive. At that time some miners noticed that using their graphic cards was much more effective than simply using their computers and as such graphic processing units, or GPU, came to dominate the market. These were improved upon with mining specialized hardware being created, these called ASIC, short for Application-Specific Integrated Circuits, can cost anywhere between a few hundreds to the tens of thousands of dollars.
Bitcoin mining nowadays has mostly been taken by either pools or mining companies using specialized hardware called ASICs and individual miners will find it hard to profit without joining forces and creating or join a hash pool.
How Many Bitcoins Can you Mine in a Day?
How many Bitcoins can you mine in a day? That is a question that every miner needs to ask themselves, and while the answer depends on the hashing power of said miner we can know for certain how many Bitcoins are created and mined every day around the world.
A new block is created and approved approximately every 10 minutes, meaning that every day about 144 blocks are approved. For each block, a set number of Bitcoins are given along with transaction fees from the transactions processed in the block. In 2008 the reward was of 50BTC per block but this reward is set to halve every 4 years and now, in 2019, the reward per block diminished to 12.5BTC/block.
Said reward is only awarded to the miner that resolved the block meaning that every day there can only be a maximum of 144 “winners”. As of today’s price of 3.876 with 12.5 BTC per block and 144 blocks per day, it still means that 1800 coins or around $6,976,800 worth of BTC is created and distributed every day. To note, pools divide their rewards amongst their participants, meaning that all the pool’s miner will receive a reward, albeit a small one.
By 2140 the last Bitcoin will be created, but by then the transaction fees and the rising price of Bitcoin, due to its deflationary nature, are expected to make up for the lost incentive as millions worth of BTC will be traded and used daily.
As to answer how many Bitcoin can you mine every day, that is something that is entirely dependent on the hashing power you have, the more the better, and a little bit of luck. As previously mentioned, nowadays, most Bitcoin mining is done by either Bitcoin mining companies or individual miners banding together in mining pools and are just about the best ways to continue to profit in today’s competitive mining market. To note, while this may be the case for Bitcoin mining, other blockchains have different algorithms that disadvantage ASICs and farm mining and favor individuals mining on their computers.
This concludes today’s article about Bitcoin mining explained, we hope you learned how to become a Bitcoin miner, how many Bitcoins can you mine in a day, enjoyed the read, and stay tuned for more great content.