A quick explanation of Bitcoin Mining
More details about Bitcoin Mining
Bitcoin Mining explained – Bitcoin operates as a Peer-to-Peer network meaning that everyone that uses Bitcoin is a tiny fraction of the “Bank of Bitcoin”. You are probably wondering where do Bitcoins come from?
Well, with paper money a government decides when to print and distribute more money. With Bitcoin there is no central government instead, miners use special software to solve math problems (verifying transactions and decryption of blocks of newly released Bitcoin) and issue a certain number of Bitcoins in exchange.
This forms a smart way of issuing the currency and creates more incentive for people to mine. Since miners are required to approve Bitcoin transactions, more miners mean a more secure network. The Bitcoin network automatically changes the difficulty of the math problems to ensure that the amount of Bitcoins mined per day stay constant.
In the early days, Bitcoin miners solved these math problems with the processors in their computers, but as the difficulty increased, miners started using more powerful processors to solve the Bitcoin math problems. Such as the graphics cards in their computers. Graphics cards consume a lot of power and generate a lot of heat. The first commercial Bitcoin mining hardware included chips that were reprogrammed for mining Bitcoin; these chips were faster but still power hungry.
ASIC or Application-Specific Integrated Circuit Chips are designed specifically for mining Bitcoin by making Bitcoin mining faster and using less power! As the popularity of Bitcoin increases, more and more miners join the network making it more difficult for individual miners to solve the math problems. To overcome this, miners developed a way to work together in pools. Pools of miners find solutions faster than their individual members and each miner is rewarded for its efforts proportionate to the amount of work they did.
Mining is an important and integral part of Bitcoin. It ensures fairness while keeping the Bitcoin network stable, safe and secure – To get your own S7 Bitcoin Ant miner, click here and start mining today. The golden rule of Bitcoin mining is – you should have started mining yesterday!