Bitcoin mining is the process by which transactions are verified and added to the public ledger called “blocks,” the connection of these blocks are also known as the Blockchain. This mining process involves assembling recent transactions into blocks and trying to solve a computationally difficult puzzle.
Following steps will explain how to mine bitcoins and potentially earn a fair amount of money:-
1. You have to purchase custom mining hardware
2. Obtain a Bitcoin wallet.
3. Secure your wallet.
4. Decide between joining a pool or going alone.
5. Download a mining program
6. Run your miner.
7. Keep an eye on temperatures
8. Check your profitability.
Also read: Why Are There Only 21 Million Bitcoins?
The concept of Bitcoin is very similar to Gold, you already know that gold must be mined out of the Ground; similarly, Bitcoins must be mined digitally. It means there are only 21 million Bitcoins that can be mined in total within 4 years. Once miners have unlocked this many Bitcoins, the planet’s supply will essentially be tapped out, unless Bitcoin’s protocol is changed to allow for a larger supply. Supporters of Bitcoin say that, like gold, the fixed supply of the currency means that banks are kept in check and not allowed to on the basis of random choice or personal whim, rather than any reason or system issue fiduciary media. But what will happen when the global supply of Bitcoin reaches its limit.
After all, the 21 million Bitcoins are mined, miners will depend upon the transaction fees in order to maintain operations. Gradually the increase in demand will increase the price of Bitcoin which will be enough for the miners to continue working on validation of transactions and creating blocks. Also if we go beyond today and look into several years to come, we can easily say that mining chips are bound to become small and highly coherent. This would considerably decrease the burden on miners and also allow mining to become a process with a lower threshold of early investments. Further, transaction fees will also increase, and this could help to keep miners afloat as well.
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