How are Bitcoins mined?

Most people know how to buy and sell Bitcoin on a market, but “how are bitcoins mined” is a little more complex. The procedure of putting new bitcoins into circulation is known as bitcoin mining. Mining is done with high-tech equipment that handles a very difficult computational mathematics task. The mining cycle is restarted when the first machine solves the task and gets the next block of bitcoins. In addition, the mining procedure verifies and approves transactions on the bitcoin network and it’s an important part of the blockchain’s management and progress.

Bitcoin works as a decentralized financial database in which a history of transactions is stored in various locations at the same time and maintained by network participants. The blockchain is another name for this digital ledger. The blockchain, which stores information about Bitcoin transactions, is maintained by introducing new blocks of data to the network.

Initially, bitcoin mining was done on personal computers with normal CPUs for a small period. Consequently, the mining process was incredibly sluggish. Nowadays, enormous mining pools are distributed throughout different countries to create a cryptocurrency. Miners used their special bitcoin mining rigs which include high-speed CPUs to mine the bitcoins. Bitcoin mining rigs use a lot of electricity to mine the bitcoins.

Bitcoin mining is time-consuming, expensive, and only rarely profitable. Apart from these problems, bitcoin mining has a great attraction for many cryptocurrency stockholders because they are rewarded with bitcoin tokens in exchange for their efforts.

Requirements for bitcoin mining

There are three basic requirements of bitcoin mining which are crypto wallet, mining software, and hardware.

  • Crypto Wallet: A crypto wallet is a location where you may safely store the bitcoin that you have earned from mining. A wallet is a secure online account that lets you carry, send, and receive bitcoin and other cryptocurrencies.
  • Mining Software: Mining software is another requirement of bitcoin mining. They are available from different sources, which can be run on both Windows and Mac machines. Miners can start earning from bitcoin rewards after connecting mining software to proper hardware.
  • Mining Hardware: The hardware is the most expensive part of Bitcoin mining. Bitcoin mining process requires the most powerful computing hardware called a rig. A rig is a customized computer that includes the motherboard, RAM, ROM, and storage. This mining computer consumes a lot of electricity.

Bitcoin Mining Reward

Bitcoin mining reward became half after successful mining of every 210,000 blocks. This halving process takes almost 4 years to complete 210,000. Bitcoin reward for mining was 50 bitcoins per block at the start which is reduced now to 6.25 bitcoins.