- What is Bitcoin Mining?
- How Are Hash Functions Useful For Bitcoin?
- Who Are Bitcoin Miners?
- How do I get involved?
One of the most common analogies that people use for mining Bitcoin is that it’s like mining gold. Similar to the precious metal there is a limited amount, and as it is mined, the more difficult and resource intensive it is to find more. Apart from that, Bitcoin actually works quite differently and it’s actually quite genius once you can get your head around it. One of the major differences is that mining doesn’t necessarily "find" the bitcoin. Bitcoin is given to miners as a reward for validating the previous transactions. So how do they do it?
Bitcoin mining requires a computer and a special program. Miners will use this program and a lot of computer resources to compete with other miners in solving complicated mathematical problems. About every ten minutes, they will try to solve a block that has the latest transaction data in it, using cryptographic hash functions.
With hash functions, it is practically impossible to predict the outcome of input, so they can be reliably used for proof of work and validation. Bitcoin miners will compete to find an input that gives a specific hash value (a number with multiple zeros at the start). The difficulty of these puzzles is measurable. However, they cannot be cheated on. This is because there is no way to perform better than by guessing blindly. So that's what specialized mining rigs do - they guess millions of combinations be the first computer to find the 'proof of work' hash and get rewarded with bitcoin.
Whoever wins the block will get a reward of 12.5 bitcoins (as long as it becomes part of the longest blockchain). The winner doesn’t technically make the bitcoin, but the coding of the blockchain algorithm is set up to reward the person for doing the mining and thus helping to verify the blockchain.
Initially, bitcoin miners were just cryptography enthusiasts. People who were interested in the project and used their spare computer power to validate the blockchain so that they could be rewarded with bitcoin. As the value of bitcoin has gone up, more people have seen mining as a potential business, even investing in warehouses to set up large-scale mining operations.
For the average person, it is enough to run a computer at home and join a "pool" of miners. Pools work similarly to an office lottery wherein everyone involved shares the winnings. You are rewarded commensurate with the computing power you give (the number of hash-guesses your computer makes).
We are highly experienced with this process and have access to one of the mining pools which can assure a fixed payout of bitcoin daily, weekly, and monthly. Depending on how much you invest in your mining hardware, you can make potentially hundreds of dollars worth of bitcoin a day!
Our Bitcoin Mining Consultation will clarify exactly how to get started, including what is the right hardware, software, network and physical setup you will need to get started.
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