Bitcoin mining is a great way to earn money for many early adopters of bitcoin. The early adopters got the chance to get the 50 BTC as a block reward every 10 minutes. If you have mined bitcoins in their early days, you might carry a great sum of money in your wallets. Bitcoin mining was started in 2009, and at that time, all miners require was a powerful computer and an internet connection, and knowledge of the mining process.
Today, it is not that easy to mine bitcoins, and buying bitcoin is an easy process. You can become a billionaire if you visit crypto nation pro and find ways to earn money with bitcoin.
Still, if you are encouraged to engage in the bitcoin world and want to learn about bitcoin mining, and want to mine bitcoin as a way to earn passive income, you are at the right place. This article will mention the basics of the mining process and learn how to earn money through bitcoin mining.
It is a fact that the mining process is the backbone of all blockchains that are based on the proof-of-work consensus method. There are three significant concepts of the mining process that are:
Proof of Work consensus method
Mining isn’t based on trust and is based on the proof-of-work consensus method. Each bitcoin mining software and hardware have to solve mathematical puzzles in a time of 10 minutes. The miner who solves the puzzles first and adds the transactions to a blockchain is rewarded with a block reward.
Each transaction is recorded on a blockchain ledger that is transparent to all the viewers. All the nodes participating in the blockchain network verify the transactions and are updated if any changes are made. The blockchain ledger is a public ledger that contains a record of every single bitcoin transaction.
Currently, the block reward is 6.25 BTC. The block reward was 50 BTC in 2009, but it is halved every four years. Along with block reward, the miners also earn transaction fees that they charge from users who prioritize their transactions to get processed first.
The mining process is repeated after every 10 minutes as the miners are given a time of 10 minutes to verify the transactions by solving mathematical puzzles. The difficulty of puzzles is adjusted according to computing power and miners engaged in the mining process. Network difficulty is determined by the amount of hashrate that contributes to the network.
Also Read: Learn from Where and How to Buy Bitcoins!
How to know if bitcoin mining is profitable?
Numerous variables are included in bitcoin mining, which is why buying bitcoin from crypto exchanges is always a preferable method to earn profit. If the mining process is done efficiently, it will be profitable, and miners would end earning more bitcoins through the mining process. The most prominent variable in the mining process is bitcoin’s price.
Because in today’s time the requirements for mining have been increased and people are likely to invest much on mining hardware, and other expenses and when they end up they could only cover their costs.
Bitcoin’s price majorly impact miner’s income as if the price is more, they can cover all their expenses or costs in that and save a little, but if the price of bitcoin is less, it could only cover the expenses. Many things can make the mining process profitable for miners, including a mining pool, competent hardware, low electricity bills, and other expenses.
The prices of electricity vary from city to city, and if at your place electricity prices are low then it can be profitable for you. Other than electricity, efficient hardware is required to mine bitcoins fast and earn block rewards.
If your hardware is efficient and provides high computing power, you will mine more bitcoins and earn block rewards. Also, hardware with high computing power often consumes less energy and will lower your bills of electricity.
You can also choose to mine bitcoins by joining a mining pool. There are thousands of machines in the mining pool with high computing power that is used to mine blocks fast, which results in the distribution of expenses and block reward.