Introducing new bitcoins in the network of circulation is called Bitcoin Mining, and by extension, Bitcoin Farming. The process also includes developing and maintaining the blockchain Ledger. High-end technologically sound computers perform very complex mathematical puzzles and that is the process of Bitcoin mining. In this blog, we are trying to gather knowledge about some of the factors that rotate around Bitcoin mining.
What is Bitcoin Mining?
The process of mining Bitcoins is extremely complicated and expensive, but rewarding too. Miners figure out blocks on a blockchain and solve complicated mathematical blocks to balance the credit and debit ledger of Bitcoins, by assigning specific transactions that have taken place. This whole process helps in the restriction of double-spending. That is when a Bitcoin is spent whether the transaction is randomly placed on a blockchain.
By clearing out the block, the miners make the transaction irreversible. This helps in maintaining a correct ledger of the cryptocurrency. The miner is rewarded a Bitcoin in lieu of the settlement and the sporadic success in solving the tough mathematical puzzle. For further knowledge, have a look at bitcoin wallet!
Here are a few things one should keep in mind about Bitcoin Farming:
- One can earn Bitcoins without investing for it, but by simply mining.
- The rewards are earned on a first come first serve basis. That is, the reward must be able to solve the computerized mathematical puzzle first. The odds are set amongst all the miners present in a particular network.
- For a fully operational mining rig, one has to put up either GPU (Graphics Processing Unit) or ASIC (Application-specific integrated circuit).
While considering the above, we must draw attention to the fact that miners are rewarded with Bitcoins. However, it has to be kept in mind that a Bitcoin owner doesn’t necessarily have to be a miner. Bitcoins can be bought using several other cryptocurrencies or can be earned and later redeemed by shopping, eating in a restaurant, writing articles for blog sites etc.
The concept of being rewarded with bitcoins often excites people to join mining which in turn helps in managing blockchains and maintaining the correct ledger of a network.
How to Mine Bitcoins?
The miners generally work as auditors. Their primary work to verify is the legitimacy of Bitcoin transactions in a Network. This solves the double-spending problem. For example, if I spend 3 Bitcoins for a bottle of shampoo and my transaction is unseen, I can take a full refund of the Bitcoins I have to spend while enjoying the product and of course, can reinvest those coins further. To stabilize such situations and to avoid such fraud, the miners assign the correct transaction behind each block and thus untangles the network.
The basic block each miner has is 1Mb. To complete verification of 1MB worth of transactions are rewarded with bitcoins.
Effort or Luck?
One of the most frequently asked questions is whether a miner should have the unparalleled effort or magical luck to be rewarded with Bitcoins? The answer is, you need both. As for the effort, one needs to verify a huge amount of transactions (1MB). The rest depends on your luck. As there are thousands and hundreds of miners in a network putting in the same effort, you have to be lucky to solve it no sooner than everybody else. The result is called Proof of Work.
What is the ‘Complicated Mathematical Puzzle’?
Throughout the article, it is mentioned the miners solve complicated mathematical puzzles. Are you wondering about what those puzzles are? There is a target hash set for each blockchain. The miners have to come up with the closest or exact target hash before anybody else. The target hash is a 64digit hexadecimal number. So, it is actually a guesswork. While that may seem easy, it has to be kept in mind that there are innumerable possibilities of guessing the correct target. It is quite a tough game. However, miners should have high hash rate and excellent computing powers.
In this article, we tried to give you a general idea on Bitcoin farming in general, as it is one of the most path breaking things that people are talking about today, which can bring about a substantial change. We hope this helps you, and wish you luck!