How does mining bitcoins
About ten years ago, an unknown developer from Japan Satoshi Nakamoto released an article devoted to the creation of a decentralized system of electronic payments, where the control operations implemented by the parties to the transaction, without the intervention of third parties. So there was a bitcoin Protocol that gave start to the development of cryptocurrency.
Whether Nakamoto is a real name of innovator who after the launch of the bitcoin network was eliminated from the job and disappeared? One is whether a person, or a pseudonym of a group of people? Today for unlocking these mysteries is already not running, but for getting profit with the help of the proposed technologies – how.
Laborious and not always straightforward profitable process of cryptocurrency mining is called mining.
Why do we need mining?
The economic meaning of the procedure – getting awards a certain number of bitcoins and its popularity ensured a rapid growth rate of the cryptocurrency. But mining is not only a way of earnings, it is necessary for the existence and improvement of this technology.
The mining process is the creation of chains of blocks, and they form the basis of the entire system. That is, if miners suddenly decide the time to retire, stop the car «minting» new coins cryptocurrency. The bitcoin will continue to exist at the expense of already in circulation units, but what is the fate of currency, the release of which will be considered officially completed?
The idea Nakamoto was known, that the controlled system itself. Blockchain, the technology behind it is based, assumes that creating of each following data block will only be possible after checking all the previous. Therefore, mining is also the way of system protection. The main threat for her – the appearance of cases of «double spending», it is possible to spend the same amount on several transactions. Translating into the language of everyday life – what to pay for the purchase of a high quality copy of the bill. The activities of miners in this key represents an ongoing verification carried out in the system transaction, because to support the participants desire again and again to create the blocks in the chain also in the interest of the technology itself.
How to earn bitcoins?
For this purpose, the miner needs to verify a certain number of transactions and the time before all of the other participants. The size of the data block that need to verify is 1 MB (this is typically several thousand transactions), and the process itself will consist in solving a mathematical problem. The purpose of the computation is the search for a certain value (hash). The complexity of the task is that the hash is a 64 – digit number in hexadecimal notation, and its search is random search.
That is, the miner must have a large computing capacity in order to succeed and get to 12.5 bitcoin – it is now the amount of the award. It is, incidentally, unstable and has a tendency to a regular decrease: from 50 bitcoins in 2009 to 25 in 2012, then in 2016 to the current value. As can be seen, each time the size is reduced by half, so after the next drawdown in 2020, the successful verification of the unit will be to bring the miner only 6.25 coins. Will then benefit in a lesson will depend only on bitcoins.
What equipment you need for mining?
Ideally, you will need ASIC is a specialized integrated circuit designed for a single task, and therefore able to carry out calculations very quickly. The range of the cost of such devices starts from five hundred dollars and mined tens of thousands, so that many miners find alternative to ASIC in the face of the GPU (graphics processors), collecting the installation of graphics cards. However, this method, although widespread, is considered to be more fun for enthusiasts. To provide serious earnings, will have to collect a pretty massive structure, which will consume considerable amount of power. And to get an acceptable hash rate yet (factor influencing the speed of the calculation) need to purchase video cards from an expensive segment.
To decide whether to embark on such a venture, you can use special calculators and calculate your possible profit. You need to know the planned hash rate, power consumption of the equipment and the cost of electricity.
How to increase your chances of getting compensation?
Not getting a productive mining installation all. Computing power solves everything, so if there is no possibility to increase its own forces, you should think about finding partners.
Often miners are combined into pools below summarizes the power of their devices to increase the chances of getting bitcoins. Extracted thus the coins are divided between the members of the group, the profit of which the result is significantly higher than that of the miners-singles. According to statistics, an overwhelming number of blocks in the chain is created by mining-pools.