What is Bitcoin Mining and how is it done?

What is Bitcoin Mining and how is it done?

“What is bitcoin mining and how is it done? How to remove a Bitcoin? How to produce bitcoin? What is bitcoin mining? What is bitcoin mining? Can I do Bitcoin mining too? “These questions began to be asked more frequently with Bitcoin’s big outing. Especially, I hear the Bitcoin rich in this issue and in the news, I often get interrogated by my friend and friends who are confused with what they read on the internet.

In fact, what everyone is trying to say is this; “I want to be rich by doing Bitcoin mining, but I do not know where to start …”

But the point is, if you are not really exceptional, you probably want to make Bitcoin mining / digging (which I think is a more accurate concept of mining) you are late.

Before touching on why this is so, briefly What is bitcoin mining , it is useful to take this one.

Bitcoin Mining – Searching for digital needle in digital hay stack …

In fact, Bitcoin is not much more about how mining is done; why he deserves a long essay on his own which is so important. Because it is Bitcoin that is so important technology and what makes a great invention One of the key points is Proof-of-Work known as the concept. In this article, I will protect the mental health of our readers who do not want to think too much about the technical part of the business, at least for now.

Before entering the topic, there is one thing I would like to draw attention to very briefly: Bitcoin extraction, ie mining Achieving bitcoin is not the only goal of mining . The Bitcoin miners are also trying to keep a decentralized account book called Blockchain, one of the features that makes BTC BTC, and why it is so and what it does is another matter of writing. For now, let’s just think of the mining concept as “finding / removing / printing bitcoin” …

Bitcoin mining, in fact, to summarize, your computer is characterized by a number of features that make you find and what makes this number very difficult to find, and finding it increasingly difficult.

Luck is not the reason why it is difficult and difficult. For this reason, while the Bitcoin protocol is being designed, Satoshi Nakamoto There is a security measure set by. This security measure (that is, it is difficult to find) is based on the idea that everybody can perform “Bitcoin push” (and / or manipulate Blockchain …).

Think of what is actually called mining as a chance game that you play with your computer, or a number of digits in a haystack of numbers, like I wrote above.

Suppose here that each search hammer you make is directly proportional to your processor power. In this case, the more processor power you put into this job, the more likely you will find a needle in the hay stack.

In the meantime, the concept will help you imagine that the digital stack of hay is huge and the needle is small. And it is not possible to “start looking at a corner of the haystack”, and in similar ways, use optimization methods to shorten your process / increase your chances. This will be a bad example, but consider that the needle is constantly and randomly displaced.

Another analogy used for mining is to draw lots of your computer. Though technically more correct, I did not opt ​​for it because it brought a “lucky winner” system to mind. The reason why you are not based on too much luck is that the lot being pooled is so big that the so-called “withdrawal” will constantly win those who put labor (processor power) in the amount of money that is only for the lottery.

In the current situation (at the level of difficulty and award that the BTC protocol has set for today) winning winner ” ) miner 25 BTC winning awards. This number was 50 BTC in the early days of Bitcoin, and it will decrease going [next reward step It is expected to start in 2017 and then the prize will be reduced to 12.5 BTC].
If you have come here till now, at least it means that you have some idea of ​​bitcoin mining. But to summarize; mining is difficult and requires a lot of processor power, the difficulty is getting bigger and the amount of reward is getting smaller.

Brief History of Bitcoin Mining

We have mentioned that bitcoin mining has been constantly challenging since the first day. For this reason, the number of people all over the world who are going to go, is starting to put more and more processor power into this business. In order to slow the spread of a large number of Bitcoins in a short time to the market and to maintain a rate of 1 block per 10 minutes, automatically adjusts the difficulty level.

What is CPU Mining? Processor (actually the central processing unit) about mining:

In the early days of Bitcoin, it is possible to mining with any computer (still possible, but not financially profitable because the cost is much higher than the revenue). We can even call the official Bitcoin client Bitcoin-Qt the mininge itself was being offered to the user clearly.

What we are referring to as CPU mining is the CPU of the computer being used, central processing unit taking advantage of the power to do the above mentioned mathematical operations on the computer and to obtain Bitcoin as a result.

But shortly afterwards, more and more people became acquainted with Bitcoin and became involved in the mining movement, which increased the level of difficulty by increasing the overall transaction speed of the network. But the end of the CPU mining cycle was not just about it. There is another factor that causes this …

What is GPU Mining? About video card mining:

Graphics cards solve the mathematical problems that are required for the mining of Bitcoin (and some other coins), and are more efficient than processors (CPUs). This is why graphics processing units (GPUs) must be more efficient in floating point calculations, and the processes required to extract bitcoins must use these calculations extensively.

To explain this, that is why the GPUs are more effective in the mining process than the CPUs; ” If GPUs are strong and fast mine workers, CPUs are more qualified, white-collar workers. CPUs are perhaps more educated and knowledgeable, but GPUs for mining are much more effective. ”

Anyway, in summary; After the widespread spread of the knowledge that GPUs, or graphics cards, work much faster and more efficiently in such processes, this is roughly equivalent to days when the efficiency of the CPU mining (due to the increased Bitcoin difficulty) has been diminishing. People have seen massive GPU mining rigs special computers for mining). GPU minerals have been experiencing golden days, with many of these graphics cards being connected to a computer and / or created with a pool of GPU power from many computers. This process can be From the end of 2010 to the beginning of 2013, we can say that it was very profitable. At least for large quantities …

Nowadays, Bitcoin mining is now the only level of difficulty that ASICs can achieve profitability …

( FPGA mining I am not talking about this at this point, because we can say that the broad masses do not reach much, and that ASICs are putting checkers at checkers, but I can still add a short update to this part of the article in the coming days …)

ASIC Mining – Application-specific integrated circuit mining:

If the ASIC miner nurse question is freaking out, we can get out of the mining worker example above and say something for an ASIC miner device; From the day of its birth, only the mining of mining, or even just the mining of a special material (coin) has been cultivated, consider a specialized worker in this direction.

Application-specific integrated circuits (ASICs) application-specific integrated circuits can be thought of only as processors specially manufactured for tasks that are expected to be fulfilled (and additionally devices consisting of minimal hardware such as power supply, casing, etc.) faster and more efficient than all other processor types (especially in terms of heat and energy consumption).

ASIC devices specially manufactured for bitcoin mining have begun to meet with users since the beginning of 2013 (from April to May) Bitcoin mining has changed irrevocably. If the GPU mining is faster and more advantageous than CPU mining, we can say the same thing for the difference between ASIC and GPU. As a result, the GPU and CPU minerals have become useless and cycle of ASIC devices It was. (You can still use CPUs and / or GPU mining devices to simulate altcoin, but some are more profitable, others are less profitable …).

Disadvantage of ASIC devices , if specific coins can not be used for a job other than mining. For this reason, if an ASIC miner loses the level of profitability for a coin, then operating that device is not profit but returns only as an electricity cost. But that’s another story I’ll discuss about profitability and bitcoin mining.

What is Bitcoin Mining and how is it done?

Photo sources: I Cnn.co

What will happen in the future?

For now it seems, ASIC manufacturers’ speed battle , will continue for a while. The producers announce their new products every 3-5 months and get the pre-orders and deliver the products to the customers after the month. An alternative is to rent mining shares of mining companies.

Apart from that, we will briefly mention that, personally, if you take any mining equipment and enter the BTC mining event, 99% will likely result in a financial damages infusion. But that does not mean that the same thing applies to all coins. You can choose other coins for mining.

Conclusion: It was a relatively long article, but we managed to dig up the surface of Bitcoin mining. I say the surface because, as you might guess, it’s a very, very much deeper issue. Another factor that adds depth to this work is the many different mining dynamics for many different coins. Although the process is similar, both the development of coins and profitability etc. There are big differences in the issues.

Facebook Comments