What is Bitcoin Mining?
Bitcoin Mining is the peer-to-peer process used to secure and verify bitcoin transactions—payments from one user to another. Mining involves adding bitcoin transaction data to Bitcoin's public ledger of past transactions. Each group of transactions is called a block. Blocks are secured by Bitcoin miners and build on top of each other forming a chain. This ledger of past transactions is called the blockchain. The blockchain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the blockchain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
What is Bitcoin Proof-of-Work?
Bitcoin Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady over time. Individual blocks must contain a proof-of-work to be considered valid. This proof-of-work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses a proof-of-work (Pow) function to protect against double-spending.
How Does Bitcoin Mining Create New Bitcoins?
The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce bitcoins into the system. Miners are paid transaction fees as well as a subsidy of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system through mining.
What Are Bitcoin Mining Pools?
During the last several years an incredible amount of hashrate has come online making it harder for individuals to have enough hashrate to single-handedly solve a block and earn the payout reward. To compensate for this pool mining was introduced.
Introducing the Bitcoin.com Mining Pool
Bitcoin.com has developed its own modern Bitcoin mining pool which offers two different payout methods, Pay Per Share (PPS) and Pay Per Last N Shares (PPLNS). Start mining on pool.bitcoin.com today to take advantage of our competitive cloud mining contracts.
Bitcoin Mining Methods Comparison
|HARDWARE PRICING||Per Device|
|SHIPPING / CUSTOM COSTS||Depending on location|
|ELECTRICITY RATES||Home use, usually not efficient|
|DELIVERY TIMES||Can cost a lot of mining time|
|SYSTEM MAINTENANCE||Depending on setup|
|ADDITIONAL EQUIPMENT||Depending on setup|
|ELECTRICITY CONSUMPTION||Depending on setup & scale|
|COST OF COOLING||Depending on setup & scale|
|EXCESSIVE HEAT / LOUD NOISE||Depending on setup & scale|
|HARDWARE PRICING||Usually per MH/s|
|SHIPPING / CUSTOM COSTS||None|
|ELECTRICITY RATES||Usually low|
|DELIVERY TIMES||Usually instant|
|ADDITIONAL EQUIPMENT||Automatically solved|
|ELECTRICITY CONSUMPTION||Automatically solved|
|COST OF COOLING||None|
|EXCESSIVE HEAT / LOUD NOISE||None|
Learn more about Bitcoin Mining
- Bitcoin Cloud Mining, Is It Safe and Worth It?
- Calculating Bitcoin Mining Profitability
- What is a Bitcoin Mining Pool?
- What is Bitcoin Mining?
Your first task is to find a reputable cloud mining provider. One of the best ways to make sure you have a reputable service is to look on industry news sites, forums, and reddit sub-forums to check out lists of cloud services and customer feedback on them. Continue Reading ➞
The first set of data you will want to use for discovering if Bitcoin mining can be profitable for you or not is the following but not limited to: cost of Bitcoin ASIC miner(s), cost of electricity to power miner (how much you are charged per kwh), cost of equipment to run the miner(s), cost of PSU (power supply unit), cost of network gear, cost of internet access, costs of other supporting gear like shelving, racks, cables, etc., cost of building or data center if applicable. Continue Reading ➞
What a mining pool does is accept connections from miners anywhere in the world (if applicable and some are private) and pool their hashrate together thus mining with a higher total hashrate. In doing this the variance or luck of finding block is increased to the positive by having a larger total hashrate. Continue Reading ➞
Since the difficulty of Bitcoin mining is very high now people will pool their miners together to have a better chance of creating a block and having it confirmed before other miners for a share of the current mining reward which is 12.5 Bitcoin, plus any transaction fees. We will cover pool mining later in the guide. Continue Reading ➞