How bitcoin mining works, things you need to know!

Are you interested in bitcoin and would like to find out more about mining In this article, I will explain how it works, but before getting into the details, it is important to understand what Bitcoin mining is.

What is bitcoin mining?

As you know, bitcoin is a decentralized digital currency. As a result, mining is a mechanism to maintain and secure this system decentralized.

How does bitcoin mining work?

If you want take part in updating the register of bitcoin transactions (called blockchain), you can.

Your goal? Guess a random number that solves an equation generated by the system.

So how does it work?

1. When a person performs a Bitcoin transactionis broadcast on the network.
2. Minors group these transactions into blocks.
3. Miners use extremely powerful computers (ASICs) to solve a complex mathematical problemThis problem consists of finding a number (called a "nonce") which, when combined with the block data, produces a "hash" that meets certain criteria.
4. The first miner to find the solution validates the transaction block and adds it to the blockchainThis block then becomes a permanent and immutable part of the transaction history.
5. In reward for hard workthe miner receives a certain amount of new Bitcoins (currently 6.25 BTC per block in 2024 and next change in 2028 at the next halving) as well as the transaction fees included in the block.

Sound simple? Wait until you read the rest.

What are the difficulties encountered when mining bitcoin?

Please note that it is very difficult to find the solution to the equation, even though it is very easy to validate. Let me explain.

It is important to note that Satoshi Nakamoto, the inventor of Bitcoin, established operating rules, including the difficulty of the mining process, which automatically adjusts to mining power accumulated on the network. So, if more miners join the network, the difficulty increases, and vice versa.

Remark : This difficulty automatically adjusts every 2016 blocks (approximately every two weeks) to maintain a block creation rate of approximately 10 minutes.

What do you need to mine bitcoin?

Currently, you need an ASIC (Application Specific Integrated Circuit). This is specific equipment, manufactured for the sole purpose of mining bitcoins.

ASICs are much more powerful than CPUs (computer processors), GPUs (graphics cards), or FPGAs (Field-Programmable Gate Arrays).

Is bitcoin mining profitable?

The profitability of bitcoin mining depends on several factorsnamely :

• The Hashrate: This refers to the computing power of mining hardware.
• Bitcoin reward: The amount of Bitcoins received per mined block is halved every 210,000 blocks (approximately 4 years). The last halving took place in April 2024, and the next will take place in 2028.
• Mining difficulty: As mentioned above, the complexity of the mathematical problem should not be overlooked.
• The cost of electricity: ASICs consume a lot of power.
• Bitcoin price: The value of Bitcoin has a direct impact on profitability.

In some countries where electricity is cheap (such as Kazakhstan or certain regions of the United States), mining remains profitable. In others, costs can exceed the revenue generated.

Is bitcoin mining possible at home?

Today, it has become very difficult to mine bitcoins at home with a simple PC or a good graphics card. For this to be profitable, you must :

• Investing in high-performance ASIC hardware.
• Access to low-cost electricity.

If you are interested in bitcoin mining, you will find all the detailed information on the site 99bitcoins.com.

In a nutshell, Bitcoin mining is a complex process that secures the network by validating transactionss and adding them to the blockchain.

However, it requires substantial investment in specialized equipment and access to low-cost electricity to be potentially profitable.