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A Comprehensive Guide to Bitcoin Mining

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In this era of advanced technology, no one is unaware of the importance of cryptocurrency and its effects on our lives nowadays. Cryptocurrency includes different kinds of digital currencies, but bitcoin is the most famous currency among them. It is a digital currency kept in digital wallets in a person’s cloud or the computer system’s hard drive. To invest in bitcoin, a person has to purchase bitcoins using traditional currency or other cryptocurrencies. But here are few alternatives to increase your bitcoin assets without using money. Selling your products using bitcoin, writing articles or blogs through bitcoin, and mining are examples of owning bitcoin without making a purchase. Follow the link to this link to know what bitcoin is and how to earn money through it, as it is among the most trusted sources and bitcoin platform.

What is Mining

Mining is a process in which one can increase its bitcoin assets without investing more money in it. One has to solve complex mathematical problems on the computer system and get bitcoin points as a reward. After solving one problem, one has to solve more complicated issues in the next step, and it increases the number of bitcoins they own. Till now, 16 million bitcoins are owned by people while there are only 21 million bitcoins available. Once it reaches its limit, there will be no more bitcoins available to purchase or mine, and bitcoin owners could only trade.

Some Other Ways of Mining

Here are some other techniques for mining. You have to perform a certain number of transactions to earn a bitcoin. The history of those transactions and bitcoin rewards is shared on blockchain, i.e., the public chart that contains the record of all the transactions made using bitcoin, but it keeps your details private. Some people also do mining by offering their services to bitcoin, i.e., They have to keep an eye on all the transactions being made on blockchain and check if there is any fraud being made. As a reward, they get bitcoin. Verifying 1 MB of transactions will reward you one bitcoin. One MB could cover one transaction or maybe more transactions. It merely depends on the number of bitcoins in those transactions.

Circulation of Currency

Due to the process of mining, the circulation of new bitcoin currency is made possible. Otherwise, there would be only those bitcoins that were introduced in 2009 by Satoshi. All the bitcoins that came into being after 2009 are due to people who do mining. If miners stop working, bitcoin would function the same, but there would be no addition to bitcoin from now, and the currency would remain the same forever. With time, the process of mining is becoming more complex and complicated. It has reduced the number of bitcoins being added; it is said that it can take more than a hundred years to reach the maximum number of bitcoins.

How Much One Can Earn By Mining

In 2009 when mining was done for the first time, mining one block was 50 bitcoins. But it is said that the reward is reduced by every day passing and after every four years reward is lessened to half. In 2012, four years after 2009, the premium for mining one block was halved to 25 bitcoins. And in 2016, after the same interval, that reward was 12.5 bitcoins per block. In 2020 it reduced to 6.25 bitcoins. But in comparison to the actual price one bitcoin costs, this reward is still pretty much.

How Much it Costs to Mine a Bitcoin

Mining a bitcoin, of course, is not as free as it seems. It costs your time, power, and brain. You can not simply perform it without having an exemplary computer system for mining, which costs you money while purchasing it. As it consumes more time to solve those mathematical problems, your system will require electricity, and you have to pay heavy bills for that.  After performing all necessary calculations, it has been said that mining one bitcoin costs you between 7 thousand to 11 thousand US dollars. Suppose we compare it with the actual price of bitcoin, which is 56 thousand US dollars currently. Mining still proves as an economical way of having bitcoin.

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