Bitcoin Profit Secrets 12

Bitcoin Mining – Everything You
Need To Know About Bitcoin Mining
In this guide, we’ll cover everything there is to know about Bitcoin mining so
you can find out if this is something that you would like to do so you can get
your fair share of bitcoins.
Bitcoin has been in the news a lot nowadays, and its current price is a
source of interest to a lot of people around the world. A few years ago,
many people labeled Bitcoin as a scam, but now it is seen, along with other
cryptocurrencies, as the future of money.
Cryptocurrencies, as virtual or digital currencies, have no physical
properties and need to be ‘mined’ electronically.
Before we go into details, we’d like to define first the most common terms
used in Bitcoin mining so you can easily understand how this highly
technical process works.
Bitcoin Mining Terms You Should Get To Know
Block: The data related to transactions is stored on a page known as a
block.
Bitcoins Per Block: This is the number of bitcoins rewarded to miners for
every block mined and added to the blockchain. The initial reward per block
was 50 bitcoins but every 210,000 blocks, the reward is divided by 2.
Currently, the reward sits at 12.5 bitcoins per block.
Bitcoin Difficulty: With an increasing number of miners, Bitcoin mining
also increases in difficulty. The ideal average mining time defined by the
network is 10 minutes per block.
Electricity Rate: To calculate how much you’re earning, you need to check
your electric bill. This can help you judge how much electricity is consumed
by your mining computer in return for your bitcoin earnings. Are you making
a profit, breaking even or losing? These are important questions all miners
need to ask themselves.
Hash: In Bitcoin mining, a hash can be seen as a problem related to
mathematics. The mining machine needs to solve it to earn rewards.
Hash Rate: The time it takes to solve these hash problems is called Hash
Rate. Hash rate increases with the number of miners on the Bitcoin
network. MH/s (Mega hash per second), GH/s (Giga hash per second),
TH/s (Terra hash per second) and PH/s (Peta hash per second) are some
of the units that are used in measuring hash rates.
Pool Fees: Miners join a pool for mining known as a ‘mining pool.’ Like
natural mining, miners here mine together as it helps them solve those
complex hash problems faster. You have to pay fees to the pool so it can
continue its operations. When bitcoins are finally mined, they are
distributed to miners with respect to their hash rates.
Power Consumption: Not every mining machine consumes the same
amount of electricity. So before buying yourself an expensive machine, you
must check first how much power it will consume.
Time Frame: This is a duration that you need to define yourself to see how
much you’re mining. For example, you define a time frame of 45 days. This
means that after 45 days, you’ll calculate how many bitcoins you’ve mined
during this period. Defining a time frame can help you see if you are
producing more or less than your fellow miners.
Bitcoin Mining Hardware Commonly Used By Miners
CPU (Computer Processing Unit):
In the beginning, bitcoin mining was incredibly easy and could be easily
mined on regular desktop CPUs. However, as the number of miners
increased, bitcoin mining on CPU became more difficult and caused
computer hard drives to fail.
GPU (Graphical Processing Unit):
With a surge in the number of miners on the network, the use of GPUs
started to gain popularity when people realized they were more efficient for
bitcoin mining.
Some advanced GPUs even allowed miners to increase their mining
productivity 50-100 times better in comparison to CPU mining. People also
started altering their BIOS settings to maximize their rewards. Nvidia and
ATI’s cards shot to popularity as a result.
FPGA (Field-Programmable Gate Array):
FPGA is an integrated circuit created with the objective of performing
bitcoin mining. GPU mining was turning out to be not so profitable for
everyone because of rising electricity costs. FPGA was designed to
consume less power, and so miners moved from GPUs to FPGAs.
ASIC (Application-Specific Integrated Circuit):
With the arrival of ASIC technology, FPGA was overtaken as the primary
hardware used in bitcoin mining. ASIC is a computer chip that is used
solely for mining of cryptocurrencies like bitcoins or other coins that use the
SHA-256 algorithm.
Unlike other mining hardware, ASICs cannot be used to do tasks other than
mining. Right now, this is the gold standard which miners swear by as
these powerful chips solve more problems in less time while consuming
less electricity as well.
The Role Of Mining In The Creation Of New Bitcoins
You can own bitcoins using a few methods. The easiest way is to buy some
bitcoins on a Bitcoin exchange platform though, of course, bitcoin prices
are so high now that you’ll need to make a sizeable investment.
The other method is not to use any money and instead simply mine bitcoins
using computer hardware.
It’s important to note here that the main and integral purpose of mining is
the creation or release of new bitcoins which can be then available on the
network.
Currently, about 16 million bitcoins have already been mined out of the
possible 21 million bitcoins that can ever be created.