How Does Bitcoin Mining Work? By Euny Hong Updated July 2, — 8: Nonetheless, mining has a magnetic draw for many investors interested in cryptocurrency. And if you are technologically inclined, why not do it? Well, before you invest the time and equipment, read this explainer to see whether mining is really for you. We will focus primarily on Bitcoin. What is Bitcoin Mining?
By mining, you can earn cryptocurrency without having to put down money for it. That said, you certainly don’t have to be a miner to own crypto.
Steem can then be traded elsewhere for Bitcoin. It is the only way to release new cryptocurrency into circulation.
In other words, miners are basically “minting” currency. Aside from the coins minted via the genesis block the very first block created by Bitcoin founder Satoshi Nakamoto himselfevery single one of those Bitcoin came into being because of miners. In the absence of miners, Bitcoin would still exist and be usable, but there would never be any additional Bitcoin.
There will come a time when Bitcoin mining ends; per the Bitcoin Protocol, the number of Bitcoin will be capped at 21 million. Aside from the short-term Bitcoin payoff, being a miner can give you “voting” power when changes are proposed in the Bitcoin protocol. How much can a miner earn from mining Bitcoin?
Bitcoin are mined in units called “blocks. When Bitcoin was first mined inmining one block would earn you 50 BTC. Inthis was halved to 25 BTC. In or so, the reward size will be halved again to 6. If you want to keep track of precisely when these halvings will occur, you can consult the Bitcoin Clockwhich updates this information in real time. How many blocks have been mined so far? What are miners doing that’s so important that they get free Bitcoin?
Miners are getting paid for their work as auditors. They are doing the work of verifying previous Bitcoin transactions.