We have all heard the stories about how you can turn your average desktop into a money making machine. However, is this the tale of triumph for entrepreneurs or is it another investment going belly up. In this article we are going to be covering Bitcoin Mining. What it is, How it works, and should you start your own Mining Rig to turn computational power into dollar signs? This vocabulary to the average person is like a NASA scientist trying to explain astrophysics to a child.
This gap of knowledge between the average person and the crypto world is what drives a lot of people away from the idea of cryptos. But just below we are going to be breaking down high level concepts into understandable bite size chunks.
The Beginning Bitcoin mining at its core is a network of nodes computers that complete algorithms in order to support the Bitcoin Network as a whole. What does that mean exactly?
Well to break it down even further in more basic bitcoin. Bitcoin Mining is essentially computers that dedicate computational power to solve algorithms, in order to facilitate the transactions of Bitcoin and to extend the Blockchain. After all, the blockchain mining really just an immutable public collection of transactional history of all Bitcoins to date. What Algorithms do Miners Solve? The reason Miners must dedicate computational power is because they must solve a rigorous algorithm.
What exactly is this algorithm?
How mining works
The SHA is a bit hash that computes 32 bit words. A valid block must contain 64 leading zeros in algorithm bit hash and the rest of the hash is randomized. When miners find a valid block they must publicize it to the network in order to have it validated. If they are the first miner to find a valid block then they receive financial reward currently But you will come to find out that finding a valid block is not mining easy as it seems.
Satoshi did not have some fancy Mining Rig like many people see today, all the mining was originally done on your basic desktop computer or laptop. This was the original vision that Satoshi had, for all the nodes to exists and operate instagram computers. However, as Bitcoin became more public and individuals saw the financial opportunity in Mining the evolution for faster and more efficient devices began.