Since 2009, bitcoin has maintained the status as the best cryptocurrency on the internet today, and one of the best ways of getting them is through mining. Miners get paid a token for verifying bitcoin transactions as well as mining bitcoins. Depending on how much you are willing to spend, bitcoin mining can be a profitable venture. You can use a Mining Profitability Calculator to determine the number of tokens you will gain for the mining to be profitable.
Bitcoin mining is the process by which cryptocurrency transactions are added to a public ledger referred to as a blockchain. It is also the means by which a new bitcoin is released into a block. For individuals or groups with access to the internet and certain hardware, they can participate in the bitcoin mining process.
Bitcoin Mining Process
The process involves individuals or groups compiling recent bitcoin transactions into blocks then trying to solve a complex puzzle. The miner who solves the puzzle first places the next block on the blockchain, and they can claim the rewards. Mining difficulty is adjusted by the open source mining protocol after every 2016 blocks, which is around every two weeks. The adjustment of the difficulty ensures that the block discovery rate remains constant. This means that if the computational power increases, the mining difficulty adjusts upward and vice versa. The mining process entails:
- Verify the validity of the transactions
- Bundle the transactions in a block
- Select the header of the newest block and insert it into the new block hash
- Solve the proof-of-work problem
- When you find the solution, the new block is added to the local blockchain then propagated into the network
This is the method used to ensure that the information that is the new block was difficult to make; it was time intensive and costly. While the mining process was difficult for you, it is easy for other miners to check if you met the requirements.
In conclusion, as a miner, you will be awarded the fees paid by the users sending the transactions. As the number of miners allowed to create in each block reduces, the fees will become an integral part of the mining income.