Bitcoins have been in circulation for over a decade now. Many still think that these currencies are handmade or generated through some physical methods. But that is not the case. Bitcoins for example are made by the process of mining. All cryptocurrency is made through the process of mining. Does a common question arise as to what is mining? Is it safe? Can it be performed on every device? All these questions can be answered in this article.
Mining is how new bitcoins can be made and are allowed to be circulated in the market. Mining is done by using very complex hardware and uses AI to solve very hard mathematical algorithms. The person who finds the first block is awarded a block of bitcoins and the whole process continues forward. Mind you this whole process is mentally very careful and very costly. But at the same time once the whole process is finished the result is very fruitful. The only requirement is that you must be technologically advanced.
Mining and its effect on circulation of Bitcoin
The coolest thing about mining is that once you mine you not only earn money but also help in ensuring good circulation in the crypto market. The first block created by Santoshi Nakamoto led to the revolution and since then every single bitcoin created has been a remarkable achievement. Bitcoin is difficult to mint and thus the ratio of bitcoin to the population that wants it is very low. It is expected that by 2030 the total number of bitcoins mined would reach 50 million. Currently, there are approximately 21 million in circulation.
Earning capacity of miners
The amount of Bitcoin earned after mining a block always gets reduced to half every 4 years. When the first Bitcoin was being minted then mining of one block would be used to fetch fifty BTC. Now the same has been reduced to only 6.5 BTC. Still, the whole business is very profitable. Imagine today the price of one Bitcoin is around $50,000. Multiply it with 6.5 BTC. Despite the reduction still, this is a very good trade for mining just one block. If you are interested in Bitcoin and are looking for a platform to seek an early trading opportunity then one must consider https://bitcointrader2.com/ as it is safe, reliable and one of the emerging platforms providing bitcoin trade.
Why is it necessary to mine Bitcoins?
The obvious reason to mint bitcoins is to ensure that the bitcoin and in general the crypto industry keeps moving. But nowadays it is very difficult to mint Bitcoins because the technology has evolved and it is not an easy walk for anyone. The Bitcoin network is huge and to keep it expanding it is necessary to keep minting. The difficulty arises when millions of people mint bitcoins the algorithm becomes more complex and the mining becomes difficult. More the computing power, the more the level of difficulty. Plus, the problem is that these large computers are not like normal PCs. Miners need to now invest in powerful computer equipment like the GPU and other techniques like this. The cost of these computers ranges from hundreds of dollars to thousands of dollars. Thus, the problem is very complex but the solution also needs to be an easy one.
Disadvantage of mining
Mining certainly has its downfall such as this mining equipment requires a lot of investment and the result might lead to nothing. The biggest disadvantage of mining is the power consumption it takes and the impact it has on the environment. The regulation factor is another big downfall, many countries have no framework regarding crypto mining and thus you never know what you are getting into. There is a growing demand for adopting cleaner fuels so that the industry that is recently trying to emerge doesn’t shut down immediately.