Anyone interested in Bitcoin must have heard the term “BTC mining.” Unlike coal miners, crypto miners don’t need to carry tools or work outside. Instead, they can start mining with a computer or a mining rig at home. That said, what exactly is BTC mining?
In short, BTC mining is a process of record keeping.
Bitcoin is a blockchain-based system collectively maintained by computers distributed around the world. By providing his/her hashing power anybody could contribute to building this ecosystem. To make sure its normal operation, the network needs the deployment of specialized computers to function as nodes. They create new blocks by certifying transactions in the Bitcoin network and keeping records on the blockchain. This can be thought of as a bookkeeping process, with the blockchain acting as the ledger and participants acting as bookkeepers.
Every 10 minutes, the BTC network generates a new block. The network rewards bookkeepers (participants who gain the authority to update blocks) with the bitcoins generated in the new block to attract more players. The procedure is known as "BTC mining," The people who execute the calculations are known as "miners." The block reward for mining a new block was initially fixed to 50 bitcoins. Satoshi Nakamoto (the Bitcoin creator) specified that the block reward would be half every 210,000 blocks to manage the market circulation of Bitcoin (about four years). The BTC block reward was reduced to 6.25 bitcoins in 2020.
Mining is essential for the BTC network.
BTC mining employs a consensus mechanism known as PoW (Proof of Work), which allows the first person to process data to update blocks and get BTC rewards. Minersgather and verify transaction information regularly (every 10 minutes) and then bundle it into a block. Miners must overcome cryptographic difficulties after packaging the block to become the only miner allowed to upgrade it. Only the first solved blocks will be added to the blockchain and duplicated by other nodes in the BTC network, ensuring that the blockchain remains unique.
The benefit of PoW is that any malicious act necessitates the greatest amount of network hashing power. In other words, until the attacker controls more than 51% of the total, he cannot tamper with any data in the BTC network. Therefore, the higher and more distributed the BTC hashrate is, the more secure the network will be.
Miners keep the entire BTC network secure while receiving BTC rewards through mining.
Meanwhile, mining is also one of the primary means to acquire bitcoins.
How to participate in BTC mining?
Step 1: Purchase a high-quality BTC mining setup.
The hardware used in mining, known as mining rigs, has three primary parameters:
electricity price, hashrate, and power usage.
The hashrate impacts the overall potential energy of mining rigs, whereas power
consumption controls how much electricity is consumed when they are running.
Step 2: Locate a secure mining spot to house your rigs.
Miners centralize their mining rigs for simpler maintenance and control in places with cheap electricity, such as Africa and Kazakhstan, to cut mining costs. A mining site is created by combining many mining rigs. As we all know, BTC mining sites are facilities that house dozens, hundreds, or even thousands of mining rigs for mathematical calculation (mining).
Step 3: Decide on a wallet.
The next stage in bitcoin mining is to create a BTC wallet or use an existing BTC wallet to get your bitcoins. Copay is a wonderful BTC wallet that works on various operating systems. Hardware wallets for Bitcoin are also available.
Bitcoins are sent to your Bitcoin wallet using a one-of-a-kind address that only you have. The most crucial step in setting up your Bitcoin wallet is to protect it from potential dangers by enabling two-factor authentication or storing it on an offline device without an Internet connection. You can get a wallet by installing a software client on your PC.
Step 4: Choose a mining pool
A mining pool pools the hashrate of miners in a virtual environment, dramatically increasing the likelihood of a block. The income is then divided among the miners based on their hashrate shared. A mining pool's most crucial job is allocating assignments, tracking work, and distributing revenue.
Step 5: Get the mining program on your computer.
Amining program connects your rigs to a mining pool, allowing for a more efficient operation.
Step 6: Monitor & maintain your mining rigs.
To reduce the mining cost, miners centralize their mining rigs for easier maintenance and management in places with cheap electricity, such as Africa and Kazakhstan. The practice of pooling multiple mining rigs forms a mining site. AS WE KNOW, the BTC mining sites are facilities that bring together dozens, hundreds, or even thousands of mining rigs for mathematical computation (mining).