Bitcoin Mining how to, remains an intriguing topic for most people. Some of the most fundamental questions about the topic revolve around the token itself. The internet search engines have encountered lots of queries about security, value and the history of the flagship cryptocurrency. It all boils down to one question; where did Bitcoin originate from?
Bitcoin is not your ordinary traditional currency. Whereas traditional currency is minted in central banks, bitcoin is mined by BTC miners.
Miners are network participants who perform specific extra tasks. The participants order transactions chronologically and include them in the Bitcoin blocks they find. The service prevents users from spending the same BTC twice.
The Bitcoin Mining How To Process
You must be asking yourself, how do you bitcoin mining? The mining process itself can be a bit technical. Well, here’s how it operates in general:
Finding a block is like winning a lottery. An attempt to find a new block is basically like a random guess for a lucky number. Just as increased attempts increase your chances of winning a lottery, powerful computational power likewise increases your chance of winning.
Now for every random guess, a tiny amount of energy is consumed. Attempts fail most of the time and the miner ends up wasting energy. But once every 10 minutes, a miner somewhere succeeds in adding a block to the blockchain.
The Proof Of Work Consensus
Anytime a miner finds a valid block, he must have burned more energy in all the failed attempts. This is what is known as proof of work.
The proof of work prevents miners from creating Bitcoin from thin air. Miners have to burn energy to earn them. And most importantly, the proof of work ossifies BTC’s history. What does this mean?
If an attacker was to change a transaction that happened in the past, they would have to redo everything. That means catching up with work done since and establishing the longest chain. This is practically impossible, that’s why miners are said to ‘secure the network’.
The Mining Reward
The reward for securing the network and the ultimate objective of the miner is to win the lottery price. It serves as the incentive for burning energy. Each new block includes a special transaction that awards miners’ new Bitcoin. And that’s how Bitcoin first came into circulation.
At the launch of Bitcoin, miners were awarded 50 Bitcoin each. The amount halves every four years with the current reward being 12.5 new Bitcoin for each block. The upcoming halving in May will halve the reward to 6.25 new Bitcoin.
Mining has become an increasingly difficult task. The job and has been left to professionals with specialized hardware running on cheap electricity. You also need to be willing to invest significant time and resources as well.