Bitcoin mining is one of the ways through which you can acquire Bitcoin. In Bitcoin mining, you digitally verify Bitcoin transactions and add them to the Blockchain network. (Blockchain is the technology behind Bitcoin). There are two basic involvements in blockchain mining: generating new Bitcoins & Verify transactions.
Two main considerations of Bitcoin Mining
- Verifying transactions: The user must verify at least 1 MB worth of transactions. It can seem that this 1 MB worth of transactions can be as small as 1 transaction. However, in reality, it can be equal to thousand of transactions depending upon the quantity of data 1 transaction stores.
- Adding a block of transactions: In order to add a block of transactions to the blockchain, miners have to solve algorithms. These algorithms are basically mathematical problems and the one who solves this puzzle first gets a reward in return.
Role of Hashes in Bitcoin Mining
It was mentioned above that Bitcoin miners have to solve mathematical puzzles if they want to discover new Bitcoins. These mathematical puzzles are basically solved using the hash functions that are linked to the block containing transaction data. Each hash has a chance of generating Bitcoin. The maximum amount of Bitcoins that can be generated is 21 million and at the time of writing there are about 2,386,343 bitcoins are left to be mined. When it comes to the number of BTC that are lost it is not possible to discover the exact number of lost coins. However, according to some resources, about 3-4 million bitcoins are already lost.
How to mine Bitcoin?
There was a time when bitcoin mining can be performed competitively using normal desktop computers. However, over time the miners realized that normal computers are not that effective. Then in 2013, they started to use devices that are designed specifically for mining cryptos. These are known as ASIC: Application-Specific Integrated Circuits.
If you’re thinking to mine crypto using desktop computers or GPUs or older models of ASIC, then you should make one thing clear in mind that the cost will be more than the revenue generated from it. So, it is better to mine bitcoin using new models of ASICs. However, there are still some cryptocurrencies that can be mined efficiently using GPUs like Monero XMR. (Add the link of how to mine Monero on Windows, Mac, Linux in 2021).
Also, know the current Bitcoin BTC Price
Also, read how to sell BTC In India?
