Bitcoin is often compared to gold and for good reason. Bitcoin was designed to function as gold, both as a form of currency and a store of value, but additionally it was designed to act like a scarce resource that has a limit so that people could not ‘print’ more bitcoin whenever it suited them. There is a limited supply of bitcoin (21 million) and in order to make it available for use, it needs to be ‘mined’ by Bitcoin miners. Unlike physical gold, bitcoin prospectors don’t need pickaxes to dig through dirt, instead, they use powerful computers to solve complex maths problems. Upon solving these problems they get rewarded in bitcoin blocks.
How does bitcoin mining work?
Bitcoin mining works in two ways, the first is using powerful computers to solve mathematical problems on the Bitcoin network in order to produce new bitcoin blocks (currently 12.5 BTC per block). The second is solving maths problems to verify transactions on the bitcoin network.
Bitcoin is not regulated by any government or central authority. It is backed by millions of computers worldwide which are called nodes. All transactions on the bitcoin network are stored by nodes and the transaction data is publicly available for everyone to access.
Bitcoin transactions, which are movements of bitcoin from one bitcoin address to another by buying, selling withdrawing or depositing, are documented and stored in blocks on a public record called the blockchain.
It’s bitcoin miners jobs to make sure new blocks of transactions are added to the blockchain and that those transactions are accurate and not duplicated. Bitcoin miners are rewarded in bitcoin for verifying these transactions.
How long does it take to mine 1 bitcoin?
This depends on the computing power available to you. Bitcoin mining difficulty is adjusted every 2016 blocks to keep the rate of mining consistent. The more bitcoin miners trying to solve the math problem, the more difficult it is to solve. However if if computational power decreases then mining becomes easier. Many bitcoin miners join mining pools in order to increase their chances of earning bitcoin in a shorter time frame.
Is bitcoin mining still profitable?
Yes, it can be profitable if you have the upfront investment to invest in bitcoin mining equipment so that you have powerful computing power. Alternatively invest with Bitcoin mining companies such as NGS Crypto who already have a lot of computing power is the easiest way to get involved and start earning without having the bitcoin mining expertise.
What do you need to start mining bitcoin?
In order to mine bitcoin yourself you would need:
To read up on bitcoin and find out how it works and how to profit from it before spending any money. Then once you know how it works you would need to purchase bitcoin mining hardware such as ASIC chips, download free bitcoin mining software such as CGminer and BFGminer, join a bitcoin mining pool and then set up a bitcoin wallet to receive the bitcoins you mine.
Choosing to mine yourself could be difficult as a new-comer so investing with established bitcoin mining companies may be the best option.