What Is Bitcoin Mining & How It Works


Bitcoin created in January 2009 as a digital currency imitating the housing market crash. The name called Satoshi Nakamoto is an anonym, which used by the entity who invented Bitcoin to hide their identity. Below we’re going to give you a broad idea about Bitcoin. What is Bitcoin Mining and how it works?

13 October 2020 | AtoZ Markets – There is still a mystery who created the technology. Bitcoin requires a low transaction fee than other traditional currencies with less transaction period. Bitcoin operated by the decentralized authority, different than government-issued currencies. Though the digital currency like Bitcoin and others booming like a bubble, there is always remains a risk as it not issued by banks or governments,

What is Bitcoin?

Bitcoin is a kind of cryptocurrency. It’s able to be sent on peer-to-peer Bitcoin network from user to user, and there’s no need for any mediator. It’s a digital currency that decentralized and works without any supervision of a central bank or any single manager. Through cryptography, transactions confirmed with network nodes. Transactions are filed in a Blockchain which has a public distributed ledger.

In 2008, Bitcoin invented by an unknown group of people or an unknown person using the name Satoshi Nakamoto. Bitcoin started in 2009 after publishing its source code as open-source software. As a reward of a process named Mining, Bitcoins created for. Moreover, for other currencies, services and products Bitcoins can be permuted. In 2017, there were 2.9 to 5.8 million unique users using a cryptocurrency wallet with the maximum use of Bitcoin, estimated by a research of the University of Cambridge. Bitcoin has both repute of praise and criticism. Its high electricity consumption, price volatility, thefts from exchanges, and its use in illegal transactions have been marked by critics. Apart from this, including several aristocrat laureates and a few economists Bitcoin has been individualized as a speculative bubble. Though some regulatory agencies have issued investor alerts regarding bitcoin, it’s also used as an investment.

 

What Is Bitcoin Mining?

Bitcoin mining works by high power computers, which calculates and solves very complex computation math problems. The maths are so complex that a human cannot solve it. Even mining requires incredibly powerful computers to calculate. Moreover, to solve these problems, a computer required luck and work as well.

Besides, Bitcoin mining can give the outcome in double. First, a computer solves a complicated math problem on the Bitcoin network to generate new Bitcoin. Secondly, Bitcoin miner solves computational math problems. Besides, the Bitcoin payment network is secured and reliable because bitcoin miners verify its transaction information.

 

How Does Bitcoin Mining Work?

Bitcoins were published in circulation by the process called Bitcoin mining. Resolving computationally difficult maths is the requirement of disclosing a new block for adding to the Blockchain. Mining verifies and adds transaction records over the network for contributing to the blockchain. Miners receive a few bitcoins by blocks to the blockchain. And the reward is half of every 210,000 blocks. The block reward is currently 12.5 and was 50 new bitcoins back in 2009. The rewards for each block discovery came down to 6.25 bitcoins by the halving, occurred in 11th May 2020. A few outturns higher rewards than others, while different types of hardware can be used to mine Bitcoin. More advanced processing units like Graphic Processing Units (GPUs) and particular computer chips called Application-Specific Integrated Circuits (ASIC) can help to achieve more rewards. These well-performed mining processors called “mining rigs.”

The smallest unit referred to as a Satoshi, and one bitcoin is separable to eight decimal places (100 millionths of one bitcoin). Bitcoin can eventually make divisible to even more decimal places if necessary, or the participating miners agree to the change.

Bitcoin Miners Incomes

In every four years, Bitcoin mining rewards halved. In 2009, when Bitcoin mined for the first time, you would earn 50 BTC per block mining. This halved to 25 BTC in 2012, and by 2016 it has halved to 12.5 BTC. In the current period of 2020, the reward size halved to 6.25 BTC. At the moment of writing, you can get 12.5 BTC for completing a block. The price per Bitcoin was about $9,300 back in November 2019. That means you could earn $116,250 (12.5 x 9,300) for a block.

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5 Best Bitcoin Mining Hardware

To become a profitable Bitcoin miner, you need the best Bitcoin mining hardware, the low buying price, and less energy consumption. Below we provided the best five Bitcoin mining hardware, to help you to decide which hardware suits you.

1. Bitmain Antminer S9i

Bitman Antminer S9i is the most popular Bitcoin mining hardware in the world. This mining hardware has completely sold out on the Bitman’s website. Though Bitmain Antminer S9i sold for only $499 in May 2020, its per second hash rate is 14 TH and the energy consumption is 1,320 Watts, which makes S9i the most efficient Bitcoin mining hardware in the world. This hardware is best for the beginners, who are looking for the low upfront cost and high efficiency.

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2. Halong Mining DragonMint T1

The Halong Mining DragonMint T1 has the highest hash rate of 16 TH 1/s than other BTC mining hardware. Its energy consumption has 1480 Watts, which reduces to a 0.075 Joules per Gigahash ratio. DragonMint T1 the most efficient and powerful BTC mining hardware on the market. Therefore, you will have to spend $2,729 to buy it as there’s a high demand for the DragonMint T1.

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3. Bitmain Antminer T9

The Bitmain Antiminer T9 is less capable and efficient than Antiminer S9i. Its hash rate is 12.5 TH per second with an energy consumption of 1,576 Watts, but it’s trustier to the miners. Antminer T9 has a high-class chip than S9i, so it does not burn out as fast. The expected rate of Bitmain Antminer T9 around $500. This is a good option for expert miners who wants long-lasting mining hardware.

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4. Avalon6

Avalon6 is the cheapest Bitcoin mining hardware, and it’s very easy to set up, which may cost you around $300. Its hash rate is 3.5 TH per second with less efficiency and has a high energy consumption of 1050 Watts. Its electricity consumption is too high, so mining more Bitcoin with Avalon6 can cost you a lot.

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5. Pangolin Whatsminer M3X

Pangolin Whatsminer M3X is the most powerful hardware on the list, which may cost you around $1,022. Its hash rate is 12.5 TH per second and requires 2,050 Watts energy to operate. The M3X also more affordable hardware than other hardware in the market. It may help you to earn more profit than other hardware by compensating for high energy costs. This could be the best option for an expert miner with below-average electricity costs.

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Best Bitcoin Mining Software’s

The mining process needs dedicated hardware conducting high processing power along with software applications that manage these rigs. Here’s some of the best Bitcoin mining software and their best sides:

  1. CGMiner: Better than others
  2. MultiMiner: Easy to use
  3. BFGMiner: Can Customize
  4. BitMinter: Cross-Platform Usage
  5. Miner-Server: Good for Cloud Mining
  6. EasyMiner: GUI Front-End For Multiple Tools
  7. Awesome Miner: Centralized Mining Management

What Is Bitcoin Wallet

Though Bitcoin is a digital currency, you need a digital wallet to store it. Bitcoin can’t technically be stored, as it has no physical shape or form. So it’s the private keys that should securely be stored as you use it to ingoing your public Bitcoin address and transaction signatures. There are plenty of various forms of Bitcoin wallets out now in the market. You can choose the right one as per your requirements.

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Summary

Over the past 11 years, Bitcoin has changed the world’s economy and financial system by providing instant and hazardless transactions. Bitcoin came with the idea that you don’t need to store your money into a third party account as you’re your bank and owning your bank account by opposing the other banks and financial institutions. In addition, it’s just the beginning of a new era of the digital currency world. The Bitcoin still has a lot of miles to go.

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