What is mining? - Bitcoins

Mining

Mining

Mining is a process to create the structures necessary to operate cryptocurrency platforms. This process is organized on the appropriate equipment - miners, specially configured computers. The sale and maintenance of mining equipment are carried out by specialized companies, for example, Miner World. Miner owners are paid for activities that are beneficial for the operation of the cryptocurrency platform. Bitcoin is the most popular cryptocurrency today.

They often talk about mining about the creation of new blocks in the blockchain. Blockchain is a chain of blocks that contain specific information. At the same time, the blocks are ordered relative to the information they have - their list is connected. This means that if information changes in one block, the content of the following blocks also changes. This is a complex process because different blocks of information are stored on other computers. Therefore, such databases must be replicated, i.e., their data must be copied from one source to another and vice versa and synchronized. It is this database that is used in the Bitcoin system.

How to get bitcoins?

Bitcoins are electronic payment units generated in a database of the same name. It happens in the following way. Transactions are carried out in the system. When the information and signatures are verified, the trades are considered completed. Information about completed transactions is grouped into blocks that line up in a chain.

Each block consists of information about transactions recorded in it and its header. The header contains:

  • own hash - a data array translated into bits (binary system);
  • the hash of transactions included in it;
  • soup of the previous block;
  • service information.

Creating such a block is work for which its performer (miner) will receive a reward - a commission. Such a block is included in the overall system if the numerical value of the header hash is less than or equal to the value of a certain number. Its hash will be included in the headers of the blocks that follow it.

If the numeric value of the header hash is more significant than this number, the block should be rebuilt. To date, the values ​​​​needed by the miners are obtained only by random enumeration; therefore, to receive significant profit, the system equipment has to work for a long time.

The reward for creating a block consists of 2 parts - emission (issuance of a new batch of bitcoins) and commission (formed from voluntary commission deductions for transactions included in the league).

Features of working with bitcoins

  • The owner of bitcoins will never be able to tell how much they have in his account. The system stores only data on transfers of a certain number of payment units to or from his account. The balance (accumulation) is not calculated by the system. For the wallet owner to navigate its contents, he has to use notable clients.
  • Since mining takes place on networks where the equipment's power is known, the efficiency of obtaining bitcoins by an individual miner depends on his computer's ability. The more powerful the system, the more computational operations it can perform, and, consequently, the reward will be higher. Therefore, the equipment should be periodically updated and upgraded, which will significantly help on Miner world. On average, new blocks appear every 10 minutes, so even long-term work on a weak machine will most likely be inefficient.
  • You can use rewards as a means of payment after the generated block receives 120 confirmations. Statistically, this happens about 20 hours after its generation.
  • The maximum number of bitcoins that the system can generate is 21 million. This is expected to happen around 2031. The difficulty level in the Bitcoin system is recalculated every 2016 block. This happens about every 14 days. When the last bitcoin is issued, miners will only receive a commission for creating new partnerships.
  • The formation of blocks at different times is valued differently. Initially, the system paid as much as 50 bitcoins to create 1 block. After 210,000 blocks were formed, the payout was halved.

How to increase computing power?

To increase the efficiency of hunting for bitcoins, miners pool their computing power into pools. At the same time, they parallelize their computational processes as much as possible so that the resulting solutions are different and the parameters are not duplicated. The system perceives the pool as a single miner and awards him a reward every day. The remuneration received is divided among the pool members by the preliminary agreements.

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