How Exactly Bitcoin Mining Works and How To Do It?4 min read

Its history is connected to the basic characteristic of virtual currencies: decentralization. When the distribution of this new form of currency was assumed, the problem also arose of creating a system for generating the money itself which was both secure and not concentrated in a single server. The solution was to bestow Bitcoins and cryptocurrencies on those subjects, which are called miners, who contribute to the functioning of the system through mining.

It is important to consider that since we are talking about digital coins at the basis of the functioning of this system there is a specific technology that is called blockchain.

The cryptocurrency extraction process is therefore based on a real research since the miner, using a computer and very high computing power. It will try to find a resolution algorithm, intended as a procedure that involves creating any solutions which will lead to the correct hash string. The difficulty is that not only in the creation of the hash are a series of numbers added but also the value of the hash of the previous block chain is added to it.

Technically the computer receives numerical information from another system or from the network and through millions of calculations, carried out in a second; it elaborates the probable solution that leads back to the hash that verifies the operation.

Today cryptocurrencies have become a well-defined reality and more and more people are approaching mining, making this process more complex with an increase in the difficulties in being able to find the correct hash and a direct decrease in earnings. Understanding the individual phases of mining and how it is possible is important in order to evaluate whether to consider the mining activity as a valid investment. This can be done by just simple register on the online websites. You can try

Prepare the necessary equipment

Once you choose to take the mining route you will need to prepare the necessary equipment and tools in order to be able to operate as a miner. Below we list the main elements that underlie the extraction process:

Computers and hardware needed for mining

The hardware of a computer is a fundamental element for mining since it carries out the calculation activity 24h on 24h seven days a week, elaborating the possible attempts to find the correct hash and close the block. In the first years of the release of Bitcoins and other virtual currencies, it was sufficient to use the home computer too, but today, depending on the type of currency, it will be necessary to prepare tools that are performing and have a high computing power. It is important to consider that this tool will use all its processing power for mining calculations, for this reason it is advisable to prepare a device that is purely dedicated to this purpose.

If you intend to operate with cryptocurrencies through mining, the first aspect to consider is the reason why you decide to acquire the role of miner and dedicate yourself to the extraction process. Cryptocurrency mining can be a source of income, but it requires time to devote and economic resources to be used in technological equipment and energy consumption.

For this reason it can be considered both a source of livelihood and, if you believe the idea behind the creation of virtual currencies, a long-term investment.

It is also important to consider which cryptocurrency is to be subjected to the mining process. In fact, it is not enough to create a computer to dedicate oneself to the extraction, but it is essential to prepare the one best suited to the chosen virtual currency. In fact, if you want to research the hashing of a Bitcoin, the process will require very high computing power and the use of particular devices very different from those necessary to mine cryptocurrencies.

Finally, it is important to keep up to date with news and the introduction of new types of coins into the network so that you can enter a market with little competition and have the opportunity to return your investment immediately. One can get the latest update of bitcoin and related currencies on different news websites.

This is a sponsored post. As it’s related to crypto trading or cloud mining, you should also read our risk warning. Read more in our editorial policy.

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