What is Bitcoin mining ?
If you’ve ever wondered where Bitcoin comes from and how it goes into circulation, the answer is that it gets “mined” into existence. Bitcoin mining serves to both add transactions to the block chain and to release new Bitcoin.
New bitcoins are added to the system about every 10 minutes through many Bitcoin Mining companiesand individuals. This involves using computing power to verify bitcoin transactions across the network by solving cryptographic problems called “hash puzzles.” As the number of bitcoin miners on the network grew and the difficulty of mining increased, hardcore bitcoin fans turned to ever-more powerful and specialized servers called bitcoin miners. At first, these were GPU-driven, but now they’re increasingly using field-programmable gate arrays (FPGA) or application-specific integrated circuits (ASIC).
How Bitcoin Mining Works ?
Before you start mining Bitcoin, it’s useful to understand what Bitcoin mining really means. Bitcoin mining is legal and is accomplished by running SHA256 double round hash verification processes in order to validate Bitcoin transactions and provide the requisite security for the public ledger of the Bitcoin network. The speed at which you mine Bitcoins is measured in hashes per second.
Here is a complete Bitcoin mining guide, this is a technical video that shows how Bitcoin operates.
Bitcoin Mining Hardware for 2016
The bitcoin wiki’s Mining hardware comparison page is a good place to go for rough information on hash rates for different hardware. You may also want watch an updated overview on bitcoin mining.
For now, ASIC technology is basically the “end of the line” in terms of mining power, according to We Use Coins. ASIC-based bitcoin miners might be incrementally improved in terms of hashing power or power usage, the site notes, but no other disruptive technology appears to be on the horizon that could make mining either exponentially more powerful or more energy-efficient.
BITCOIN MINING reward system
The mining reward is halved after every 210,000 transaction blocks to ensure that no more than 21 million bitcoins in all will be generated over time. (This hard limit is expected to be reached in 2140.) As of 2013, the mining reward is a batch of 25 bitcoins; this is scheduled to drop to 12.5 bitcoins in 2017.
What is Bitcoin pool mining?
Pool mining “pools” all of the resources of the clients in that pool to generate the solution to a given block. When the pool solves a block, the 25 BTC generated by that block’s solution is split and distributed between the pools participants.
What is Bitcoin Solo Mining?
Solo mining is when a miner performs the mining operations alone without joining a pool. All mined blocks are generated to the miner’s credit. In 2016 solo mining won’t generate enough revenues, but you can always try. It’s like playing loto 24/7 for free, there is no 100M reward though.
With increasing generation difficulty, mining with lower-performance devices can take a very long time before block generation, on average. For example, with a mining speed of 2310 Ghps, at a difficulty of 51076366303 (which was in effect at the end of July, 2015), the average time to generate a block is 1099.14 days.
To provide a more smooth incentive to lower-performance miners, several bitcoin pool miners, using different approaches, have been created. With a mining pool, a lot of different people contribute to generating a block, and the reward is then split among them according to their processing contribution. This way, instead of waiting for years to generate 25btc in a block, a smaller miner may get a fraction of a Bitcoin on a more regular basis (constant passive income as long as the miners are working).
A share is awarded by the mining pool to the clients who present a valid proof of work of the same type as the proof of work that is used for creating blocks, but of lesser difficulty, so that it requires less time on average to generate.
Get The Right Mining Bitcoin Hardware
Start bitcoin mining
For those who don’t want to make a major technology investment but still want to try mining, there’s another option.
Some mining companies offer you an opportunity to start mining Bitcoin or Altcoins without buying bitcoin mining hardware. This service is called cloud mining. With cloud mining services, there is no need for a bitcoin mining computer, no need for high electricity bills and also no need for bitcoin mining knowledge. Buying a cloud mining hash power takes care of all this for you.