As the buzz around Bitcoin and cryptocurrencies begins to increase, more and more people are finding they have questions about how these currencies are mined. Spoken about in generalities, it’s often difficult to decipher what mining really entails. There are a lot of layers to the mining conversation and quite a few factors that are unknown to the general public. This article will look at some of the lesser-known facts about Bitcoin mining, what is happening in the space and how people are trying to change mining for the greater good.
What is Bitcoin Mining?
Bitcoin mining is essentially the rewarding of a crypto coin for allocating computer processing power as a resource to a decentralized network. Essentially, you are getting paid for adding power to this network making it more efficient and stronger. That’s a simple explanation and it goes deeper once you start looking at the blockchain and various methods for the actual mining process but see this as the bird’s eye view.
Now, let’s dive into a few things you didn’t know about the exciting world of Bitcoin mining.
1. There’s more than one way to mine Bitcoin
Bitcoin mining isn’t one size fits all. There are several ways to mine for cryptocurrencies. You can choose from mining with an Application Specific Integrated Circuit (ASIC). This is a costly device but it has one of the highest returns as it supplies the most power. An ASIC is a chip that has a sole designated purpose and when put towards Bitcoin mining can a add significant power increase to mining efforts.
Another type of mining is to use Graphic Processing Units (or Graphic Cards). Again, a pricey addition to hardware, it can add substantial power to Bitcoin mining endeavours. Next is the standard Central Processing Unit which is found in almost all computers. Although the most attainable it won’t have nearly as high of a return as an ASIC or GPU.
Mining doesn’t have to be a solo pursuit, although this is an option, many Bitcoin miners have found joining a Mining Pool or Cloud Mining to be beneficial. This often requires additional work in terms of determining payout structure but it makes it more likely to get Bitcoins.
2. Not every computer can mine for Bitcoin
As stated, having additional supports for your computer such as an ASIC or GPU makes your chances of mining Bitcoin much higher. That being said, these add-ons require serious computing power and electricity. Not any old laptop or PC can perform Bitcoin mining. There are a number of software and hardware considerations that are needed to ensure your computer can handle such intensive work.
3. Miners compete for coins using mathematical problems
Bitcoin was the first cryptocurrency to incorporate the Proof of Work concept. It was designed so that prospective miners couldn’t gamify the system and abuse the power of the decentralized network. Miners are asked to solve a mathematical problem, also known as generating a hash, that matches the numbers on that particular part of the blockchain. The first miner to get this string of numbers wins a coin reward. It’s a way to stop users from abusing the system and earning Bitcoin fair and square.
4. Bitcoin needs miners
If all of the Bitcoin miners (and other crypto miners) decided to stop mining at the same time, then there would be no new Bitcoin. The network relies too heavily on the power provided by these enthusiastic miners. By continuing to extract these Bitcoins, miners are essentially helping mint new currency- the system is mutually reliant on one another to keep going. Furthermore, successful miners are allocated voting capacity on any changes to what is known as the Bitcoin Improvement Protocol (BIP). That means by being part of the network, they also have some decision-making power.
5. Some mining companies are looking to make the process more environmentally friendly
It’s well known that crypto mining isn’t considered energy efficient but there are companies trying to change that. Groups like Gryphon Digital Mining are working to make Bitcoin mining a more environmentally sound process. Gryphon Digital Mining is working to create a negative carbon footprint when mining for Bitcoin. Leading the way in the industry, Gryphon has aimed their sites on running completely off 100% renewable energy. Creating a path for a greener future in Bitcoin mining will create a more sustainable industry for cryptocurrencies of all kinds.
Bitcoin mining is a fast-paced and exciting domain. With the right tools and setup, people from all walks of life can find themselves a part of the mining community. That being said, supporting those trying to make a difference in crypto mining should be a priority as the industry grows, so too will the need for those wanting to create a greener more sustainable future for Bitcoin and other currencies.
