Bitcoin compiles new transactions and adds them to the blockchain while maintaining the integrity and accuracy of the previous transaction history. The person who does this approval process faster will be rewarded with bitcoins.
This is likened to the gold rush phenomenon and is called mining. The person who performs the mining is also called a miner (miner).
Currently, the number of people mining is increasing all over the world, and mining is also being done by organizations and corporations using large-scale systems.
Bitcoin mining process is as follows.
- Bitcoin (BTC) organizes transactions into blocks.
- This block of transactions is approved by miners approximately once every 10 minutes.
- By mining, miners are rewarded with newly issued bitcoins (BTC) and fees.
Bitcoin Mining Reward Amount
Bitcoin mining rewards start at 50 BTC per block and decrease by half every 210,000 blocks, with the 6,929,999th block being the last mining reward.
The total number of bitcoins to be issued is approximately 21 million BTC, which is the maximum number of bitcoins that can be issued.
It will take approximately 132 years to excavate the 6,929,999th block, and the last block will be excavated around the year 2140.
Types of Mining
There are three types of mining methods
- Solo mining
- Cloud mining
- Pool mining
Solo mining is when you mine alone. You can earn a lot of money if you succeed, and you don’t have to pay commissions because there is no middleman.
Cloud mining is a method where you invest in a mining organization and they do the mining for you. You only need to provide funds, no special machine or knowledge is required, so it is easy to participate. The organizations that do the mining do it overseas, where electricity is cheaper, so you can keep your electricity bill low.
Pool mining is a method of mining in groups. The group that does the mining is called a mining pool. Because the group mines and distributes the rewards, it is a method with a high possibility of stable income.
The rewards of mining are very attractive, but you need to do a huge amount of simple calculations to find the exact number.
Since mining requires a special high-performance computer and a large amount of electricity, it is currently difficult for individuals to do mining.