Bitcoin has been in the news a lot lately. You may have heard of it, but you may not know what it is. Bitcoin is a digital currency that is created and held electronically. Any government or financial institution does not control it. To become a Bitcoin miner, you need to understand it and how it works. We will discuss the basics of Bitcoin mining and how you can get started.
1. What is Bitcoin Mining?
Bitcoin mining is how new Bitcoin is released or “mined” into existence. You mine Bitcoin by running extremely powerful computers (also called ASICs) that race against other miners in an attempt to guess a specific number. The first miner to guess the number updates the transactions’ ledger and rewards newly minted Bitcoin. Mining is very competitive, and today it requires specialized hardware to have a successful mining operation.
2. Why Does Bitcoin Need Miners?
Bitcoin transactions are gathered into “blocks” protected by digital signatures. Only miners can verify these transactions and sign (with their private keys) the blocks to authenticate them. This process is called mining because it requires significant processing power (CPU or GPU) and it verifies or secures all Bitcoin transactions which take place in the Bitcoin network. A limited number of transactions per second can occur in the network, so this process must be quick. Blocks are made up of lists of all the most recent valid transactions.
3. What Do You Need to Mine Bitcoins?
To start mining for Bitcoin, you will need things like a moderately fast internet connection. It’s recommended to have at least two megabits per second, but it can work with lower speeds as well. If your Internet speed is too slow, it may take a very long time before you receive any payment from anyone. You will also need a reasonably powerful computer. This is an essential requirement. 4 to 6 GB of RAM should be enough, but more would be recommended if you plan on simultaneously running multiple computers for mining. Nowadays, you cannot mine with any run-of-the-mill computer; you need ASIC miners. They are specially designed for this task. The good news is that you don’t have to build the ASIC yourself; buy it.
4. How Does Bitcoin Mining Work?
When you connect your computer to the network, it becomes a ‘node’ and starts receiving messages from other nodes on the web asking if its ledger is up to date. After doing so, it updates the Blockchain and communicates with other nodes again to let them know that its ledger is up to date. This process is vital for the system to run; the network wouldn’t exist without miners.
Conclusion
By now, you should have a basic idea of what Bitcoin is and how it works. Different people use Bitcoin for various reasons, but the bottom line is that its users believe that Bitcoin will continue to increase in value over time. So, if you do, too, then investing in mining hardware could be a profitable way to get your hands on some Bitcoins.
