What is Bitcoin Mining ?

Bitcoin mining can also be referred to as the processing of transactions in the Bitcoin digital ecosystem.

Users (or often called miners) who provide the computational power for transactions to take place are rewarded bitcoin tokens for every transaction completed through their system.

For every successful transaction in the system, the mining power compute two different operation , the first is solve mathimatical problems to conform a transaction and the second operation results in a block getting added to an open and unalterable digital ledger of past transactions. This is why the ledger itself is referred to as the blockchain. The technology also refered to as the Blockchain Technology and it has been prooven to be integrated into many aspect of everyday activities aside its use as a utility token.

How Does Bitcoin Mining Work?

Bitcoin is not traditional money, which is created by central banks, Bitcoins are awarded to miners during the transaction process. Miners get rewarded with Bitcoin when they successfully process calculations that create new blocks.

Bitcoin’s blockchain, like many blockchains, requires complex mathematical problems to be solved in order for transactions to be made in a secure manner.

The Bitcoin system was designed to have only a finite number of Bitcoin that can be mined. Because of this, and to ensure the rate of transaction success is kept at a steady rate, the equations have been getting steadily more difficult because as new blocks are created and added to the chain, the next problem to solve becomes more complex and requires more connected nodes to ensure faster transations.

How Do You Mine For Bitcoin?

Frankly setting up a bitcoin mining system is a very expensive project to carry on because it is power consuming. However, there are also third-party cloud-mining services that allow people to mine Bitcoin without having to actually own the computing equipment itself.

Basically, a person will have to own a computer that they set up with software to run on Bitcoin’s blockchain network, thus availing that computer to the blockchain as a candidate for solving the mathematical problems

Many different computers are all instantaneously working to solve the same problem in the hope of creating a new blockchain block and winning some Bitcoin, This process is inherently risky. All the energy used on unsuccessful attempts at solving the problems is wasted. It is possible to start on your own personal computer if you choose to mine Bitcoin on your own equipment, though it is likely you will spend more on electricity than you earn in Bitcoins. Special hardware is now the option of choice for anyone serious about the pursuit of owning a bitcoin mining network.

These specialized Antminer computers cost several thousand dollars per unit, but they are much more cost-effective in the long run. The idea is to stack your bitcoin not spend it. You will of course also need a electric supply for this. power intensive process. A Bitcoin wallet, an encrypted digital wallet to store your Bitcoins, is also required.

If you choose to go for the cloud mining service company which is what most investor in the mining industry do, you will still need a wallet. You will also need to join a mining. pool service provider and pick a mining plan, To join a pool you often have to give some of your earnings, typically 3–8%. Some top miners don’t charge any fee but only the payout transaction fee to your wallet on the blockchain network.

How Much Money Can You Make Mining Bitcoin?

Following the collapsed of the bitcoin price in late 2017 and early 2018, leaving it at just a third of what it was at the peak and severely hobbling the ability of miners to profit from it. While Bitcoin prices have roared higher again in 2019, they could easily reverse again. On top of that, Bitcoin mining is still a crowded field, keeping it competitive. There is not much money for newbie small miners getting into the network but on the long run when the price soars high again. It becomes proitable. The goal is to HODL bitcoin not SPEND bitcoin.

Some companies are trying to make it as Bitcoin miners while some already found a space for themselves earlier in the network and are ahead.. Spectra Mining Farm network is an example of this, it operates one of the largest mining facility.

While the environment for individuals mining Bitcoin is challenging, Spectra Mining has been profitable. Because after making gross profit of $800 million in the first half of 2018, many blockchain investor has been interested in the pool and several partnership development going on which will be announced later this year.

Is It Legal To Mine For Bitcoin?

The short answer is yes. However, the legal framework is not the same in all countries.

In most countries, mining for Bitcoin is legal. The most notable exception is China, where cryptocurrencies in general have a legal status that is precarious at best — as in early 2018 their State Administration of Foreign Exchange declared they would be cracking down on Bitcoin mining.”

What Is The Future For Bitcoin Mining?

For big companies mining with deep pockets, the practice is not completely pointless. But if you dream of Bitcoin mining riches via your personal computer, you might not stack up to 1 BTC in your life time.

For Bitcoin mining specifically, there isn’t much of a future unless you’re running sizable operation of hundreds or thousands of mining units. The algorithms are only going to get more complex and the need for high demand of computing power as long as Bitcoin remains trending and popular.