Mining is essentially the process involved in authorizing and recording Bitcoin transactions on a distributed ledger. The mining process results in producing new bitcoins while decentralizing the network’s security. This article is a thorough introduction to mining Bitcoin. Bitcoin mining is a very profitable business as the miners are paid for authorizing transactions of users.
The Process of Mining Bitcoin
The process of mining bitcoin involves the following; all the authorized transactions are stacked into a single block and the mining computer must solve a complex cryptographic puzzle for it to get the privilege of adding a new block to the Blockchain network. The reward of solving the complicated puzzle and adding the block to the blockchain is 12.5 bitcoin in bounty. Over time, the bounty decreases and for every 210,000 blocks, it partially shrinks. A Bitcoin miner is, therefore, the individual earning money by mining bitcoin with his computer.
There is a large cost incurred during Bitcoin mining from payment of mining rig to the electricity bill. There are many online Bitcoin mining calculators available to help you find out how much you can get when mining Bitcoin. There are also company rigs that can do the mining for you, all you have to do is sign a contract which states that you will pay them for two years of mining and your coins will be given to you periodically.