Bitcoin.com.
Bitcoin mining is
the processing of transactions on a Bitcoin network and securing them
into the blockchain. Each set of transactions that are processed is a
block. The block is secured by the miners. Miners do this by creating a
hash that is created from the transactions in the block. This
cryptographic hash is then added to the block. The next block of
transactions will look to the previous block’s hash to verify it is
legitimate. Then your miner will attempt to create a new block that
contains current transactions and new hash before anyone else’s miner
can do so.
(Update: Bitcoin Core is less usable as money due to much higher fees
and delayed transaction times. The Core team has also expressed an
interest in keeping these fees high since they view BTC as a
“store-of-value” and not something to be transacted on a daily basis. In
contrast, Bitcoin Cash’s transaction fees cost pennies and payments can
be validated even with zero confirmations. These facts make BCH the
ideal cryptocurrency for sending and receiving money anywhere in the
world.)
Since the difficulty of Bitcoin
mining is very high now people will pool their miners together to have a
better chance of creating a block and having it confirmed before other
miners for a share of the current mining reward which is 12.5 BTCs, plus
any transaction fees. We will cover pool mining later in the guide.
The series of blocks is called the blockchain.
The blockchain is like your checkbook register or a general ledger of
transactions. The way that Bitcoin mining secures the blockchain makes
that ledger tamper-proof and immutable.
Each block once made into a block will be verified by nodes on a Bitcoin network.
This process is using Proof of Work. Proof of Work covers BTC transactions in a block and is what your Bitcoin ASIC Miner does.
Proof of Work explained:
“In order for a block to be
accepted by network participants, miners must complete a proof of work
which covers all of the data in the block. The difficulty of this work
is adjusted so as to limit the rate at which new blocks can be generated
by the network to one every 10 minutes. Due to the very low probability
of successful generation, this makes it unpredictable which worker
computer in the network will be able to generate the next block.
For a block to be valid it
must hash to a value less than the current target; this means that each
block indicates that work has been done generating it. Each block
contains the hash of the preceding block, thus each block has a chain of
blocks that together contain a large amount of work. Changing a block
(which can only be done by making a new block containing the same
predecessor) requires regenerating all successors and redoing the work
they contain. This protects the block chain from tampering.”
The process of Bitcoin mining while difficult on the technical side
to to fully understand can be easily mined by anyone. Miners secure the
network by using Proof of Work and creating a hash for each block that
is mined, so the blockchain keeps an immutable record of all
transactions taking place on the network.
Bitcoin mining is competitive, you want to solve or “find” a block
before anyone else’s miner does. Then you will get the block reward and
transaction fees from the block. During the last 3 years we have seen
an incredible amount of hash-rate coming online which made it harder and
harder to have enough hash-rate personally to solve a block thus getting
the payout. To compensate for this pool mining was developed. Bitcoin.com has launched it’s own mining pool with competitive pricing, which you can register for and begin mining today.
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