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Bitcoin mining - what is it? A quick bitcoin mining guide

4 min reading

The concept of Bitcoin mining in the cryptocurrency environment has become increasingly popular. Find out what Bitcoin mining is and how it works.

bitcoin mining

Bitcoin mining basics

Bitcoin minning is just Bitcoin extracting. A concept that constantly accompanies and repeats on cryptocurrency themes. To better comprehend them, you need to briefly understand how the Bitcoin network works. So before the topic of digging is explored, the basics of blockchain will be presented. Block chain technology is very simply "blocks" with data arranged in the correct order. Each such "block" fits only in one place. Verification of data correctness is done by checking that all "blocks" are properly arranged. That's what "miners" do. They check and approve transactions. Thanks to this, the entire network can function properly, and "miners" in return receive cryptocurrency rewards.

What is Bitcoin mining?

Bitcoin minning is about solving a math problem. It is in the form of an equation in which one element is missing. However, this is a very complex equation and requires considerable computing power to solve it. In addition, the larger the bitcoin network, the more difficult the task. So you can find analogies to the gold mine. Searching for the solution of the equation is a monotonous search for gold among the earth, and the more gold we have already extracted, the older the mine, the more ounces it is much harder to get. That is why Bitcoin is called digital gold, and Bitcoin mining has been called mining.

How to mine Bitcoins?

Knowing how Blockchain works and knowing what bitcoin mining is, you can ask how to become a miner. Currently, there are several possibilities for mining Bitcoin:

Purchase of an excavator

The most cost-effective method is to buy a so-called Bitcoin miner, o mining hardware. Without going into the details, this is a device with great computational capacity aimed at solving equations in the Bitcoin network. It was once possible and profitable to mine Bitcoins using computers. The current size of the network and the complexity of tasks require the purchase of appropriate devices. However, now even excavators have too little power, so users connect and add their computing power to form cryptocurrency mines. Mining new Bitcon is faster and users get rewards in proportion to their computing power.

Rental of computing power

Instead of buying an expensive excavator, you can rent a calculation space on a so-called farm, where there are a lot of Bitcoin mining devices. Thanks to the purchased computing power, part of the excavated cryptocurrency is obtained. However, you should be careful and carefully check the companies offering this type of cooperation. A lot of scams have appeared on the market that physically do not have bitcoin mining hardware, and when they collect the right amount of money from users they disappear.

Mining Bitcoin using a computer or telephone

An alternative method is to install bitcoin bitcoin software on your computer or phone. Such a program will use computing power, computer or phone ram memory to mine cryptocurrency. However, it is currently an unprofitable undertaking, and one would have to wait for reasonable amounts of bitcoin for years.

What to look for during Bitcoin mining?

First of all, before deciding to become a "miner", you should calculate whether buying aa bitcoin miner or another method of mining is profitable. It is necessary to take into account the costs of purchasing an excavator or software and the costs of electricity that such a device consumes. It is a common mistake to calculate profitability assuming that the price of bitcoin will rise or reach a certain number. It is never certain.

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