About Bitcoin Mining and how it works?


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Uploaded on Jan 29, 2020

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About Bitcoin Mining and how it works?

About Bitcoin Mining and how it works? Bitcoin mining • Bitcoin mining is a decentralized computational process which confirms transactions in a trustful manner and creates new bitcoins in each block. It is painstaking, costly and only sporadically rewarding. bitdegree.com Benefits • The main benefit is that you can earn bitcoins without having to buy them. Miners receive bitcoins as reward for completing blocks of transactions. investopedia.com Rewards • The bitcoins rewarded to miners serve the sole purpose of legitimizing, supporting and monitoring the Bitcoin network and transactions. It also motivates more miners to take part in the process. coindesk.com What is their work? • Bitcoin miners have to basically verify transactions to keep the users honest and avoid the problem of ‘double spending’, in which the bitcoin owner could illegally make a copy of digital tokens. coindataflow.com Difficulty • However it is not so easy to earn rewards for bitcoin mining. You’ll have to submit a proof of work, that is being the first miner to solve a numerical problem, which requires luck and also you have to verify upto 1 MB of transactions. investopedia.com Mining hardware • In order to mine efficiently, miners will have to buy hardware which include powerful computer processors like Graphic Processing Units (GPU) or an application-specific integrated circuit (ASIC). investopedia.com Difficulty level • The current difficulty level for a computer to solve a blockchain hash is 13 trillion, which means there is only a 1 in 13 trillion probability of solving a hash, which is 44,500 times more likely the chance of winning a jackpot lottery. cryptonews.com Guesswork • Bitcoin mining is mostly a complex guess work involving millions of miners to guess a unique hexadecimal number which is now highly competitive and difficult to achieve. sebfor.com 21 million bitcoins • There are only 21 million bitcoins in total which can be mined, which is somehow similar to gold mines that are limited and finite. Now about 18 million bitcoins have been mined and only 3 million is left to be mined.