What Is Bitcoin Mining?
Bitcoin mining is the process that solves highly complex computational problems using high-powered computers which cannot be solved on hand. The result of bitcoin mining is twofold that is one results in mining a new coin and the other results in high security for bitcoin transactions.
Transaction means when someone sends their coin to someone else. A transaction that happens in bitcoin stores in a network called blockchain. It is stored by clumping them together into a block. The blockchain is a public record.
Why Bitcoin should be Mined?
Bitcoin cryptocurrency India is a totally digital currency stored in digital records, which has a high-risk rate of making a copy, counterfeit, or double-spend the same coin more than one time. So the solution to all these problems is mining, it makes it difficult to hack or fake transactions by making it expensive and resource-intensive, and also it is a more cost-effective process.
Bitcoin Mining Process
CPU Mining
The first 50 bitcoin batch mined using CPU on Jan 3, 2009, by Satoshi Nakamoto. It mined in his personal computer. Mining bitcoin was so easy in the early stages. It is said that during the early days it was possible . Hundred bitcoin can be mined in a week.
GPU Mining
As algorithms become more difficult it was harder to meet the speed needed to mine.
Ordinary CPU’s no longer used for mining with the design of bitcoin rewards halving. Hence, they developed a specific software design in 2010 using computer graphics cards. Many people started to switch to GPU as one GPU card is equivalent to dozens of CPUs. This made mining efficiently easier.
FPGA AND ASIC Mining
FPFA mining – Field Programmable Gate Array: the first equipment manufactured in the year
2011 by Nangeng Zhang from china. Whose nickname is “Pumpkin Zhang” hence the application is called “pumpkin miner.” However, it only lasted for six months in the market due to high power consumption.
ASIC called butterfly miner, released in the year 2012. Soon it became the 3 rd generation of bitcoin miners as the computing power is about 200 times of graphics card mining. Many miners started showing interest in chip technology from 110nm, 55nm, 28nm, all the way up to 14nm.
How Mining works
The top cryptocurrency in India, Bitcoin miners compete to solve incredibly difficult math problems that demand the use of expensive computers and massive amounts of electricity in order to properly add a block. Miners must be the first to discover the right or closest response to the query in order to finish the mining process. Proof of work is the technique of determining the correct number (hash). By quickly and randomly generating as many guesses as they can, miners attempt to predict the target hash, which needs a lot of processing power. More miners joining the network only makes things harder.
Application-specific integrated circuits, or ASICs, the necessary computer hardware, can cost up to $10,000. ASICs use a significant amount of electricity, which has come under fire from environmental organizations and reduces miners’ capacity to profit.
A miner will be rewarded with 6.25 bitcoins if they can successfully add a block to the network. Every 210,000 blocks, or roughly every four years, the award value reduces in half. 6.25 bitcoins were worth $125,000 as of September 2022, when the price of one bitcoin was around $20,000.
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