Bitcoin Mining is defined as a process with which computing power is provided for the needs for processing, protection, and synchronization of transactions, of all users on the network.
The Mining is a type of decentralized Bitcoin data center that consists of miners that come from all countries.
There is no single person that has control over the network. This process is called “mining” in the same way as gold mining.
Bitcoin Mining, unlike bit checking, provides rewards for services that are useful. The payment for the respective bitcoin shares is based on the available computing capacity.
In traditional Fiat currency systems, as well as governments if needed, simply print more and more money.
On the other hand, at Bitcoin no money is printed – it is “scourged” itself or in the cloud (cloud mining). All around the world, computer calculators (bitcoin calculator) bitcoin and compete with each other.
How does Bitcoin Mining work?
Over the Bitcoin network, people often transfer around the clock Bitcoins, but even if all transactions are recorded, no one would have the ability to see who paid what.
The Bitcoin network does this by merely collecting all of the transactions of a particular period and placing them together in one list which is called block.
It is the job of the prospector (miner) to confirm these transactions, as well as to enter them in an “account book.” For this, he is paid in bitcoin (the bitcoin transaction fee).
Creating a hash.
The “account book” is a long list of all blocks, which is also called blockchain.
The blockchain is used in Bitcoin Mining to have the ability to trace all transactions at any period.
Whenever there is a new block is created, it is added to the blockchain, resulting in an endless list of all transactions.
The blockchain is also visible to everyone, so each of the users can see which transaction is being performed. However, you are not familiar with who is doing that transaction.
Thus, bitcoin is transparent, as well as anonymous at the same time.
But, a general ledger has to be trustworthy, and the entire process is digitalized.
So, how can we be sure that the blockchain will remain intact and never manipulated? The “miners” then come into play.
When a block of transactions has been generated, they let the miners go through a process.
Then, you see the information and apply a mathematical formula which converts the transaction.
After that, the transaction is something much shorter, actually only a string of letters, as well as numbers which are also called hush. This hash is kept (in the block) as the end of the blockchain.
Hashes have some interesting features. It is fairly easy to get a hash from the information of Bitcoin, but it is almost difficult to see what it was earlier.
Since it is fairly easy to create a hash of a large number of records, each of the hashes is unique. If only just one of the characters in the blocks is changed, the entire hash will also change.
To create a hash, the miners use not only the data of the transaction in the block, but they also use some other additional data. Part of the data is the hash in the last block of the blockchain.
Since each hash of a block uses the hash of the previous one, a kind of wax seal will be created. He also confirms that the current block and the before is valid, as if manipulated, it would notice everyone.
When sometimes someone tries to manipulate some transaction by changing the block that already exists in the blockchain, then he/she would also have to change the hash.
When someone verifies the block’s authenticity with the hashing function, he/she will directly notice that the hash does not match the one which is in the blockchain.
The block will immediately be recognized as a forgery.
Since each of the hashes of a block is used to generate the hash of the next block in the blockchain, manipulation will also manipulate the hashes that follow.
What do we need in order to mine Bitcoin?
There are different ways of bitcoins to mines. On the one hand, one can do that with Bitikins from so-called ASIC Miners themselves from home, and it can also be operated on the other Cloudmining.
In the cases of cloud mining, the software, as well as the hardware components that are required (miner) is rented by an external company for a fee in a “cloud,” and the scaled bitcoins or altcoins (monero, zcash, ether, etc.) are credited directly to the cryptocurrency wallet.
Bitcoins are mining themselves.
If you want to mine Bitcoin directly from your own home, you will need the following hardware and software components:
The right Bitcoin Miner hardware is critical.
First of all, you will need a computer with a powerful graphics card. Or, you may also use Bitcoin – Miner which is specially designed for bitcoin mining via USB.
As an alternative, you can also use Raspberry Pi3 microcomputer instead of the computer, to run an external miner. This will save energy costs compared to a computer running 24/7.
Bitcoin Mining pool.
Together, we are much stronger: This is precisely the motto of the mining pools. After all, if you are all alone, you will need to find some new blocks.
It is almost hopeless since the required computing capacity would be much too great.
By the so-called mining pools, a remedy is provided.
The required computing capacity that all the users need to have is bundled, and one is scrambling in a community.
So, one may have the ability to find some new blocks much more quickly, and the remuneration in Bitcoin will be divided according to the rendered computing capacity of the individual users