WHAT IS BITCOIN MINING?
Bitcoin mining involves the process of verifying and adding transaction records to the bitcoin’s blockchain ledger. The public has access to the blockchain. The underlying intention of bitcoin mining is that it exists so that it can confirm the transparency of transactions on the bitcoin network.
As a result, bitcoin miners earn a reward by unlocking a new bitcoin, an incentive that encourages people to assist in the primary purpose and process of bitcoin mining. The main use of bitcoin mining is to legitimize, support and monitor the bitcoin network and its blockchain.
What do bitcoin miners do?
For a bitcoin miner to earn a bitcoin, they must verify 1MB worth of transactions, but the hard part is that they must be the first one to come up with the right answer to a numeric problem.
The process of bitcoin mining to unlock a new bitcoin is not easy; it resembles the real mining of say gold or diamonds; hence the name bitcoin mining.
As a bitcoin miner, you have to solve a complicated math problem to come up with a 64 digit hexadecimal number known as a hash. The math is usually complicated; therefore, it requires high computing power to solve it. The resulting hash is generally equal to the target hash, so basically, it is guesswork.
The guesswork is the problematic part. The total number of possible guessworks that you can come up with is in the order of trillions, and you compete with people globally in coming up with the hash. That is why it is extremely arduous work.
For you to mine successfully, you need a high computing power so that you can come up with a high hash rate. The hash rate is measurable using mega hashes per second (MH/s), Giga hashes per second (GH/s) or Tera hashes per second (TH/s). That is a great deal of many hashes.
The difficulty in bitcoin mining changes from time to time. Earlier people were able to mine bitcoins using the regular desktop computer. However, that is not possible today.
For the bitcoin blockchain to run smoothly in its ability to verify and process transactions, the bitcoin network has to produce a new blockchain in every 10minutes or so. It is made possible by the fact that a million mining rigs are competing to solve the same hash problem; therefore, the bitcoin network gets a solution faster.
So, this means that to mine competitively, you need high computing power with the latest cutting edge technology for facilitating bitcoin mining. Graphics Processing Unit (GPU) and Application-Specific Integrated Circuit (ASIC) is the latest powerful computer equipment for mining bitcoins.
What people do is that they combine their mining efforts to create a mining pool. Bitcoin miners connect their computational resources over a network, and then they combine their efforts towards unlocking a block. When they are successful, they split the bitcoin reward among themselves.
For that reason, the bitcoin network automatically evaluates and adjusts the difficulty of mining every two weeks. Suppose there is more computational power working towards generating the hashes, the level of difficulty increases to keep block production at a stable rate. If the computational power is less, the level of difficulty then decreases.
The bottom line
By mining a bitcoin, you get to earn a bitcoin without putting down money for it. The bitcoin is a reward for completing a block of verified transactions that add to the bitcoin blockchain.