What does mining consist of? Is it worth mining Bitcoin?

The cryptocurrency mining has aroused the curiosity of many people for the great benefits that many have obtained with it. But, what is it about? For many years now this has been done, will everything remain the same ?. Is it worth the investment? Let’s see it below.

If you have been informed about the cryptographic world, you have probably heard about mining and miners. To understand what it is about, it is important to know what is the chain of blocks or blockchain. So let’s quickly see what it is about.

The blockchain is a  distributed database in which a list of constantly growing blocks is maintained. Every day, people send millions of cryptocurrencies to each other. So without the blockchain, it would not be known who paid X cryptocurrency at a certain time.

The blockchain keeps track of transactions within a certain time in a “block”. This is where the miners enter, in charge of registering everything in the chain of blocks in your computer or node.

The miners receive a reward for this, since in addition to contributing to the operation of the network, they have a series of costs, such as electricity or necessary computer equipment.

Miners who use their computer to register transactions, in the case of Bitcoin, have the possibility to earn a value of 12.5 Bitcoins. The computer that first solves a very difficult calculation will receive this reward. This form of mining is also called Labor Test. Today there are other ways to generate cryptocurrencies, such as Proof-of-Stake (PoS) or Proof-of-importance (PoI).

Limits in mining

The daily blocks are regulated. Which means that in the entire Bitcoin network, there is always a maximum number of Bitcoins per dayEvery 10 minutes a new block is produced. And since every day more people join the mining process and the hardware used is improved, it is increasingly difficult to mine Bitcoins.

Each cryptocurrency has its own rules for mining. There are even cryptocurrencies that cannot be “mined”. Some cryptocurrencies are created and the entire offer is released at the same time, in which case the total supply is maintained or is in circulation and there is no way to “mine” new currencies.

Some examples of cryptocurrencies that are not mined are Ripple, IOTA, NEM, NEO, Lisk and EOS.

The necessaries to mine

For those who want to know how to mine by themselves, they must know that it is more complicated than it seems and that there are differences between the different cryptocurrencies. Here is a list of 10 common things for any of them:

  1. A wallet of the specific currency.
  2. A software mining package.
  3. A good and above all reliable internet connection.
  4. A good location: Computers can and do get very hot and also make a lot of noise. Therefore, it is not convenient to do it in your living room. The best thing is a basement or shed.
  5. For this reason, you also need a cooling system. Think of the fans or the air conditioning. It is important that you keep your equipment cool.
  6. A computer that is specially designed to mine. 
  7. A graphics processing (AMD) card (GPU) or an ASIC chip.
  8. It is advisable to be a member of an online mining group (called mining pools). This is a group of miners who exploit the same crypto as you. By joining this, you make sure your income is more stable.
  9. If you want to sell the encryption coins, you must be a member of an online exchange where you can sell your mined coins.
  10. And most importantly, you should like it and you should have a real interest in how everything works. It is clear that the level of difficulty of the mines continues to increase and the only way to keep up is by reading to always have the latest updates and necessary equipment.

Mining Bitcoin?

The Bitcoin network began operating in 2009 and the reward per block was 50 BTC. Of course, at that time the price of Bitcoin was insignificant. The sum would be around 2 dollars, however, today that amount at a price of 7,245.96 dollars would be equivalent to 362,298 dollars.

The reward is halved every 210,000 blocks mined. In 2012 the reward was reduced to 25 BTC per block and in 2016 the reward was reduced to 12.5 BTC. The next reward reduction will take place approximately at the beginning of June 2020. It depends on the speed with which they are mined. The reward will then be 6.25 BTC per block.

Certainly, in the beginning, mining Bitcoin was very lucrative, however, its popularity and the increase in its price have led many to begin mining. The difficulty of mining has also increased. Only what they possess specialized machines and very powerful can take advantage. What has made specialized mining centers have emerged in  China, Iceland and Venezuela.

Credit: bitcoin.es

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