Friends, we have already known what is cryptocurrency?, and what is the importance of cryptocurrency in the finance sector. When we talk about crypto currency, we come across many questions and there are many difficult terms about which we do not know. And at the same time we face more difficulty in understanding this.
When we talk about crypto currency, we get to hear many terms in it, such as Blockchain Technology, Crypto Mining, Peer-to-peer, Decentralization. ) Exchange, Cryptocurrency Exchange, Crypto wallet, Decentralized Finance (DeFi) etc.
Today we are going to know what is crypto mining (bitcoin mining) and why do bitcoin mining? So without wasting any time let us see what is crypto mining or bitcoin mining. Before that we have to know what trading is.
what is trading
If you know something about cryptocurrency then you must know about trading. For your information, let us tell you that trading means buying something at a lower price, selling it at a higher donation and making profit from it.
We buy all the crypto currencies like Bitcoin, Ethereum, Shiba Inu Coin at a low price and hold them until their price increases significantly. And when it increases, we sell it. This question must have come in your mind that we have bought Bitcoin but how is Bitcoin made. So here comes the matter of Bitcoin mining, from where Bitcoin is made.
What is cryptocurrency and how does it work?
Cryptocurrency is a digital or virtual currency that uses cryptography for security. It is a decentralized currency, which means it is not controlled by any government or institution. Some examples of cryptocurrencies include Bitcoin, Ethereum, and Litecoin.
What is Crypto Mining (Bitcoin Mining)?
Bitcoin is made by mining bitcoin. Bitcoin is available in limited quantity and some people make money by mining it. People who do mining are called Bitcoin miners. And that is why they get some part of Bitcoin.
You must be aware of the mining term used in Bitcoin mining. Mining means extracting any natural resources available on our earth by digging them. Natural resources like coal, iron, gold etc. are available on earth in a limited quantity and we extract the same by mining. Similarly, Bitcoin is in limited quantity.
Some important things related to Bitcoin
- Bitcoin: A Cryptocurrency
- Bitcoin Market cap: >US$775 billion
- Code of Bitcoin: BTC, XBT
- White paper: “Bitcoin: A Peer-to-Peer Electronic Cash System”
- Supply limit: ₿ 21,000,000 (21 Millon Bitcoin total)
- Circulating supply: ₿ 18,925,000 (As 2022 January)
- Symbols of Bitcoin: BTC, ฿, ₿
Why and how to mine Bitcoin?
If we give you a simple example, if we send money to someone, then first a request goes to the bank of the person to whose bank account we send the money and the bank people process that request and send a particular The money reaches the account holder of that bank account. The bank charges some money from the user for this.
Just like when Satoshi Nakamoto developed Bitcoin, he made it a little better and different from our banking system. When we send money to someone’s bank account, the one who processes it takes some charge for it. And it is only in the hands of the bankers, that is why only a few people who work in the bank get its benefit.
Our bank maintains a record of our money transactions and that record remains only with the bank and the owner of the account in which the transaction takes place. But it is not like this in Bitcoin. When Satoshi Nakamoto developed Bitcoin, he did not appoint any selected people to maintain its records. Anyone can access it and it is called Blockchain System.
Miners who do Bitcoin mining have high-end computer devices and also have special software to do Bitcoin mining. With the help of which one can easily solve many complex mathematical calculations and do Bitcoin mining. Out of 21 million Bitcoins, 18 million Bitcoins have been mined till date. And according to special sources, 800 bitcoins are being generated every day. So that’s why we do Bitcoin mining.
Why is cryptocurrency mining necessary?
As you must be aware by now, cryptocurrency mining is used to create new coins as well as to validate existing transactions. The decentralized nature of the blockchain could allow fraudsters to spend cryptocurrency more than once at the same time if no one authenticates the transaction.
Mining reduces this type of fraud and increases user confidence in the coin. Cryptocurrency mining has two purposes. It creates new cryptocurrencies and it verifies the authenticity of existing cryptocurrency transactions on the blockchain.
A miner is reimbursed after completing the process of confirming a block of transactions. And in return they get newly created cryptocurrency.
Who can do crypto mining
Mining cryptocurrency requires computers that have special software to solve complex cryptographic mathematical equations. In the early days of Bitcoin it could be mined from a home computer with a simple CPU chip, but this is no longer the case.
Today this requires specialized software. It has to be connected to a reliable internet connection 24 hours a day. It is mandatory for every crypto miner to be a member of an online mining pool.
What did you learn today
Today we talked about what is crypto mining (bitcoin mining) and why and how to do bitcoin mining? And also saw what trading is. We hope that you liked this article very much. If you have any question on this then you can definitely ask us in the comments. If you want to give any other suggestion, you can also give it in the comment box. Have you ever invested in Bitcoin or other cryptocurrencies? Please give your feedback.
- Also Read This:- How do beginners invest in Bitcoins and make money?
- Also Read This:- How To Read Crypto Charts For Beginners
- Also Read This:- How To Buy Ethereum in india
- Also Read This:- Who owns Bitcoin and which country’s currency is Bitcoin?
Crypto mining is what verifies and adds new cryptocurrencies to the blockchain. To verify a transaction, an extremely complex mathematical equation must first be solved. All crypto miners are fighting for the opportunity to be the first to solve the puzzle.
How long does it take to mine one Bitcoin? It takes about 10 minutes to mine just one Bitcoin,
If you do this for Bitcoin, Litecoin, Ethereum or other currencies then you can also earn money.