While Bitcoin mining is widely recognized as the main contributing factor towards the creation of new Bitcoin, as well as transaction validation, for the majority of users this process is quite obscure.
This part of the guide is designed to answer your questions about Bitcoin mining and related subjects.
What is Bitcoin Mining
General introduction towards Bitcoin Mining, explaining the possibilities for you to get started with it, as well as covering the basic concepts such as proof of work, incentive, and block rewards.
The Process of Mining
An in-depth explanation of the mining process and how it correlates to other aspects that comprise the Bitcoin network, such as nodes, blockchain and a summary of why this process ensures transactional safety.
In order to mine, you would need to use special bitcoin mining software which has the capabilities to generate “proof of work” hashes according to the authentic parameters for the bitcoin network.
Beyond software, you also need specialized Bitcoin mining hardware in order to be a competitive miner in the current environment. You can learn more about the main manufacturers of Bitcoin Miners and additional details about the technology they produce.
While you could buy Bitcoin mining hardware for yourself and set it up in your home, office, or mining farm, this process is incredibly expensive. Another potential solution is cloud mining, which means to purchase mining power from a farm and reap both the costs and rewards that your machine generates in the remote location.
Since the current mining difficulty is very high, some people choose to collectively mine Bitcoin and share the rewards based on the amount of work each individual miner provided into finding the hash for the current block. Usually, cloud miners are automatically enrolled in mining pools and not every company out there allows for complete control over your miner.
If you own your own mining hardware, you can manually choose which pool you want to participate in, if any.
That’s all we have about Bitcoin Mining for now. If you want to learn more about Bitcoin, you can go back to the Bitcoin Master Guide to look at other articles on the topic.
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