Bitcoin has been a subject of discussion right from its unveiling till date. Many people have misunderstood what it is about especially the mining aspect of Bitcoin, but today, we’re going to clarify what Bitcoin mining means and how it operates. First of all, we shall find out the real meaning of Bitcoin.
Bitcoin is a type of currency that has no physical form but rather appears in an intangible form or digital form. This further means a type of currency that is not in paper form but instead can be reserved on a computer system in the form of numbers. That is the nature of Bitcoin, a currency which is a collection of numbers, and will always remain like that.
As we have established that Bitcoin is a type of currency we cannot touch because it is digital, it grows at assigned periods. By mentioning grow, that means that more of it is produced through a printing process, just the way paper money is generated, and it happens at set periods. This printing releases a batch of coins at intervals, and that is 10 minutes. Another word for batch, in this case, is “block.” Therefore a block of Bitcoins is introduced every 10 minutes.
The Joy That Comes With Every Block
Now, miners look forward to every block that comes into existence because from it will their reward come. As a new supply of coins follows every block, out of it will the miners involved in its release be compensated. This reward that goes to miners isn’t always stable; as a matter of fact, it experiences depreciation at the end of every four years. Only 21 million coins are permitted to be printed in total supply; this gave rise to the idea of delaying the frequency of minting new coins in order to elongate the reward opportunity for miners. If this is not done, transactions fees will be significantly increased by miners due to low profits available to miners.
Bitcoin Mining: What It Is All About
The term mining, with regards to Bitcoin, means to free these blocks. It is an act, a process which requires dedication. Unless the coins are unlocked, they cannot simply be released because it is not done automatically. Therefore, Bitcoin mining means the process of setting these coins free.
As previously stated, there is a process involved during the release of coins, and that is by solving complicated mathematical equations. A block is set free upon finding solutions to the encountered mathematical equations. This process is so complex that each block is encircled by mathematical equations and to break through them, an immense computational power is needed.
Mind you, the key to releasing the coins is not with every equation in existence; rather there is one that makes all the work worth it. Once this particular equation is solved, the coins will be released, and it could be the first, ten thousandth, the one-millionth equation to be tried. So this is handled one at a time by a computer and the equation solving will keep on going until the block unlocks. As a result, if you want a quicker solving, then a computer system with a powerful processor should be used.
Does Bitcoin Mining Have An Expiry Date?
Well, for mining activities to end, we should be looking at the year 2140 because that is when all Bitcoins are estimated to be completely mined. So, until that happens, mining activities should continue uninterrupted. Of course, laws of economics also applies to Bitcoin because it is, after all, a currency, which makes it prone to value depreciation.
Now, from the above explanation, would you say that Bitcoin is worth pursuing? Well, that’s up to you because you should be able to decide for yourself. One can only hope that you now have a better understanding of what Bitcoin mining is and what it’s not.