Everything you want to know about Bitcoin mining


    Currency or money, the central instrument in trade – local, national or global – always came in physical form. While their transmission with the advent of technology has gone digital, they continue to be rooted in the diktats of the respective central banks that issue them. The advent of cryptocurrency in 2009 has given the global economy digital currency that is not regulated by any central bank or a single administrator.
    Unlike regular currency that is printed, cryptocurrencies including Bitcoins are ‘mined’. This ‘mining’, unlike the normal activity associated with the term, is more of an intellectual pursuit than a physical one. The only similarity to real-world mining is that the more Bitcoins you mine, their supply dwindles (only 21 million bitcoins can be mined) and the more precious they become. And this bitcoin mining requires some serious hardware.
    Bitcoin mining in other words is a process where one adds transaction records to the crypto’s public ledger or blockchain, which has past transactions. It is a decentralized computational process. The term blockchain comes from the chain of blocks that this ledger of earlier transactions contains. This chain is a confirmation to the rest of those networked to it that a particular transaction has taken place.
    Bitcoin nodes use the chains to help differentiate an attempt to re-spend coins that have been used somewhere else already with a legitimate transaction.
    Blockchain prioritizes fraud prevention. The mining process ensures any transaction is added to the blockchain only after validation and helps prevent fake or fraudulent transactions. Due to steady growth in the number of miners and the increasing complexity of calculations, mining is no longer seen as just a means to make money. It has become a competition as only the first person to solve a block on the network receives cryptocurrency as a reward.
    The entire mining process has deliberately been designed to be resource-intensive. This level of difficulty in arriving at the number of blocks that are found each day ensures miners are at a steady level. With proof of work a must to be considered valid, each block must have such proof. Other Bitcoin nodes verify the proof of work when they receive a block and use the hashcash proof-of-work function.
    The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. While mining allows the introduction of Bitcoins into the system, those involved in it receive transaction fees as well as a ‘subsidy’ of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner and also motivates people to provide security for the system and prevents hacking.
    The average time taken to mine a new bitcoin is 10 minutes, but it also depends on the kind of mining power that one possesses. Given this challenge, competition among bitcoin miners is also intense. If this mining power is say five or ten ASICs (application-specific integrated circuit), a person might be able to mine 0.01 Bitcoin a day and would require 100 days to have mined a full Bitcoin. It is this level of difficulty that spurs each miner to give it his or her best in the process.
    While mining Bitcoins is definitely time and resource-intensive, trading in them is simple and secure, thanks to ZebPay. ZebPay lets you buy and sell cryptocurrencies, including Bitcoin, instantly and in a hassle-free manner.
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