The concept of creating Bitcoin from your computer is known as Bitcoin mining. It is the process of updating the Blockchain ledger used for Bitcoin transactions. ASICs, extremely powerful computers are used for mining. ASIC is the abbreviation for the application-specific integrated circuit. It is used for any specific purposes like Bitcoin mining rather than intended for any general purposes. Don’t make your thoughts tangle up your head. At the end of this article, you will get an answer to all your floundered thought.
What is Bitcoin Mining?
Now Bitcoin has become one of the leading ways to invest money. Bitcoins are 100% decentralized and powered by complicated algorithms that run on powerful computers. The blockchain acts as the Bitcoin network. The network completes the tasks by collecting all transactional data created within a specific period and placing it on a block.
The role of Bitcoin miners is to secure this network and to process every Bitcoin transaction. They solve computational problems that allow them to chain all the blocks together. The main functions of Bitcoin mining are:
- To issue new coins
- To make transactions
- To secure accounts
Below given is the step by step process of Bitcoin mining.
Purchase Bitcoin Mining Hardware
To begin Bitcoin mining, you will need to have a good Bitcoin mining hardware. Custom Bitcoin ASIC chips are used now as it offers better performance than computer CPU or video processor card.
Download Bitcoin Mining Software
You can download Bitcoin mining software freely, once you had purchased Bitcoin mining hardware. CG miners and BFG miners are the most commonly used command-line programs for Bitcoin mining. Bitcoin mining software connects miners with blockchain and Bitcoin mining pools. The software delivers work to the miners and gives the completed work to the Blockchain and Bitcoin pools. It also monitors and displays general statistics like hash rate, the average speed of the Bitcoin miner, etc.
Join in Bitcoin mining groups or pools
Bitcoin pools are the groups in which Bitcoin miners work together to solve complicated puzzles and share its rewards. You can share your work rather than doing those complications alone. Bitcoin mining in pools began when the difficulty for the mining increased and it takes several years for slower miners to make a block. There are many good mining pools to choose from and it’s difficult to pick the good and efficient one. Always try to choose smaller and efficient pools.
Setting A Bitcoin Wallet
The next step is to set up a Bitcoin wallet. A Bitcoin wallet is a software program where Bitcoins are stored. There is a private key for every Bitcoin address that is saved in the Bitcoin wallet of the person who owns the balance. There are many forms of wallets like desktop, mobile, web, and hardware.keeping the Bitcoin wallets safer is the most important thing as hackers mainly target on the wallets.
Now its time to start mining. It is the process of updating the Blockchain ledger. It can be done on a computer that has basic software and specialized hardware. Bitcoin mining is a competitive process and can only be done by using most up to date ASICs computers.
Now here comes an end to your floundered thoughts about Bitcoin mining as we promised earlier. If you have any queries related to this please let us know them in the comment section given below.