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How Does Bitcoin Mining Work?

How Does Bitcoin Mining Work?

Governments decide when to print and distribute securities, but bitcoin is not controlled by a central government.

Cryptocurrency producers are called miners, whose job is different from real miners who extract gold, silver, and other minerals.

How Does Bitcoin Mining Work?

Those responsible for mining bitcoins do all of their work using computers, certain software to solve math problems, and issuing a certain number of bitcoins to be traded.

The issuance of bitcoin creates an incentive for more people to participate in its production process, and the more people who issue bitcoin the more secure and difficult the network becomes.

Bitcoin mining start

In the early days of Bitcoin, miners were solving math problems using processors in their computers.

  • Those later discovered that the graphics card used in computer games; is considered a better way to mine bitcoin.

  1. These cards were faster, used more electricity, and generated more heat.
  2. The first commercial Bitcoin mining involved the production of chips, which were reprogrammed.
  3. These chips were faster to mine but required more power.

ASIC applications are specifically designed for bitcoin mining, and ASIC technology has made the mining process faster and used less power.

With the increasing popularity of Bitcoin, more and more people join the Bitcoin network to mine it, and people have more difficulty solving math problems.

  • To overcome this, miners have developed a method of working together in groups called pools.

These groups find solutions to math problems faster than individuals, and each group member is rewarded for the effort and time they put into mining.

  • Mining keeps the Bitcoin network stable and secure.

Block and Mining

Bitcoin uses a public ledger called the Blockchain or Blockchain.

  • Blockchain is a distributed ledger database that records all BTC transfers.

  • The "block" is a file containing read-only encrypted transformation data.

New bitcoins are generated whenever a user finds a solution to a new block, as the new block is added and published on the blockchain network.

The ideal average mining time is 10 minutes per block, or “block”, to ensure a generation rate of 6 blocks per hour, totaling 2016 blocks every two weeks.

  • Blockchain avoids the problem of “double spending”, which is a flaw in digital currencies that allows spending the same currency twice or more.

During the Bitcoin mining process, new transaction records are added to the blockchain.

Blockchain helps confirm previous transactions that have already taken place for the rest of the network devices.

The Hash

Bitcoin mining is a complex computational process that results in cryptographic arithmetic equations.

That's why miners use the "hash", which is a way to process cryptographic algorithms with intensive mathematical operations.

The higher the hashing ability, the greater the possibility of decrypting the code, and getting a number of bitcoins for it as a reward.

  • Bitcoin mining requires special hardware that has a different hashing power according to its price.

There are 3 devices for this and they can all be purchased from Amazon these devices are:

  1. "AntMiner S7", which has a mining power of 4.73 hashes per second, costs $479.95 and earns 0.1645 bitcoins per month.
  2. “AntMiner S9” has a mining power of 13.5 hashes per second, costs $1987.95, and helps earn 0.3603 bitcoins.
  3. “Avalon6” has ning power of 13.5 hashes per second, costs $499.95, and helps earn 0.1232 bitcoins.

Block reward

When a miner discovers a new "block", he is rewarded with a certain number of bitcoins agreed upon by the rest of the miners on the network.

This number is currently equal to 12.5 bitcoins, which have halved from the middle of the year when it was 25 units and will drop again with every 210,000 new blocks.

  • Miners are also rewarded with fees that users pay whenever they make transactions using BTC.

That fee is the incentive for every miner to want to incorporate transactions into their block.

Because the number of bitcoins will not exceed 21 million, the number of bitcoins available in each block will decrease in the future, and this fee will become a more important source of income in the mining process.

Question 01: Is bitcoin mining legal?

Reply: Yes, Bitcoin mining is legal in most countries including America...etc.

Question 02: How long it will take to mine 1 bitcoin?

Reply: In more advanced systems, it may take a single miner about 10 minutes to mine a single bitcoin. However, the average rate for most miners is month / 30 days

Question 03: How much do Bitcoin miners make?

Reply: In stats 2022, miners get more than 6 bitcoins for their activity. However, in 2024, the platform will reward them with 3.125 bitcoins. The reward is paid to the miner who solves the puzzle first.

Question 04: How much does a bitcoin miner make a day?

Reply: In 2022, a single Bitcoin miner (known as ASIC), like Whatsminer M20S, will generate between $10 to 12 in bitcoin revenue each day depending on the bitcoin price (its price is unstable)

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