What is Bitcoin Mining? How Does It Actually Work?
Bitcoin mining, is it suitable for you? Or just a waste of time? Details can be found in full from this post.
You may have heard the word bitcoin hundreds of times so far. Again, many of you know very well what Bitcoin is, and what it is used for. Again, many may have been mining bitcoin for a long time. Again, there are many people who have never heard of what Bitcoin is, and what it does, and how all kinds of things related to Bitcoin are done, and what the benefits are.
If you already have a good idea about Bitcoin and Bitcoin Mining or if you are an expert on this topic, then this post is probably not for you. Can you read the post to see if I said anything wrong? If there is any mistake in my writing, please comment. And if you already do bitcoin mining, you can share your opinion and your experience in the comments. And, if you have absolutely no idea about bitcoin and bitcoin mining, or if you don't know it well, you can read this article from beginning to end. Hopefully, after reading this article you will have at least some idea about this.
And yes, no fear! Those who are already mining bitcoin or earning bitcoin, they can read this post if they want. Because, I will not give any kind of referral link of my own here.
So, without further ado, let's get started. I assume you only heard the name Bitcoin. You know nothing more than that. If you know more about this, you can scroll down as you wish. And if you don't really know, read this post carefully.
What is Bitcoin?
Simply put, Bitcoin is a type of currency. Money is a currency of our country, US dollar is a kind of currency, Bitcoin is also such a currency. It is commonly called cryptocurrency and is often called cryptocurrency. So what is the difference between our country's money or the US dollar, Bitcoin or cryptocurrency? The difference is that Bitcoin has no physical existence. That means you can't see or touch it. It is a completely digital currency. That is, it is a currency dependent only on the Internet and computers. Bitcoin was first introduced in 2006 and the person or group that introduced the currency was Satoshi Nakamoto. Bitcoin is now created as a reward for mining. I will discuss this in more detail below.
No separate organization is required to conduct Bitcoin transactions. If you trade Bitcoin with someone, no one will ever be able to track your transaction. This is called a peer-to-peer transaction. This is why Bitcoin has become so popular in modern times. As a bitcoin transaction is fully processed and approved, new bitcoin is created. The new bitcoins that are created are halved every 4 years. And, the work of making new bitcoin will continue till 2140. No new bitcoins will be created after that. Stay tuned to my group and YouTube channel for more details on this topic.
And yes, the market price of Bitcoin goes up and down almost every day, much like the stock market. At the moment I am writing this article, the value of 1 bitcoin is equal to 5 thousand 6 US dollars. In other words, at present the value of 1 bitcoin is about 4 lakh 80 thousand Bangladeshi rupees. If you want to see or know how much USD Bitcoin is worth at any time, stay tuned with my group and page.
Now you or you may ask, what will happen with Bitcoin? Yes. There will be a lot more with Bitcoin. If you have some bitcoins, but if the price of bitcoin goes up after a while, you can sell those bitcoins at a higher price, from which you can get a good amount. In addition, various large e-commerce sites or online shops (such as Expedia) now accept payments in Bitcoin. So with Bitcoin you can do online shopping if you want. In addition, one of the most popular payment switches or e-wallets in Bangladesh, Payza officially supports Bitcoin. So if you want you can add funds to your Payza account by spending bitcoin and you can also withdraw it to your bank account.
What is Bitcoin Wallet?
How to open a Bitcoin Wallet account?
Where do we usually store all our money? Definitely deposit it in the bank and initially deposit it in our money bag or wallet for use from time to time. The Bitcoin wallet is used for the same purpose, but in the case of Bitcoin. We know what Bitcoin is. But if you want to deposit some bitcoins with yourself, you will definitely need a wallet or virtual bank where you can deposit all your bitcoins.
Coinbase and BlockChain are very popular for bitcoin wallets. If you have an account in either of these two, you will get a virtual account or wallet where you can safely deposit all your bitcoins. You can also send and receive bitcoin from one account to another. Much like e-wallet and online banking. In either case, you will find an unlimited bitcoin address. Bitcoin address is a personal address where you can receive all your bitcoins and send bitcoin from your wallet to someone else's bitcoin address if you want.
What is Bitcoin Mining?
Bitcoin Mining is simply about processing and approving bitcoin transactions. This means that when Bitcoin is traded between two people or two computers on both sides, the task of processing the transaction is Bitcoin mining. This mining is done by another machine or another computer. The question that may arise here is that when only the transaction is being processed, why is this process called Bitcoin "mining"? Because, as I said before, a new bitcoin is created as soon as an amount of bitcoin transaction is completed. This means that if you work to create a record of this bitcoin transaction and process this bitcoin transaction, it means that you are basically helping to create a new bitcoin and as a result you are getting some amount of reward from the newly created bitcoin. This is exactly why it is called mining. But if you think that the process of processing or approving bitcoin transactions is very easy, then you are wrong. Since this whole task is done by the computer, it may seem easy to you. But not really. Processing and approving a bitcoin transaction requires the computer or the hardware or machine on which the work is to be done to have sufficient processing power and a lot of time. This is because the process of processing this transaction is not as simple as simply marking the transaction as complete and creating a transaction report. To do this, your computer has to work through many complex algorithms and solve many complex math problems. Also, getting a new bitcoin reward by completing this transaction depends on the mining difficulty. The more complex the problem, the greater the reward for solving a transaction.
To do bitcoin mining you need a computer with strong enough hardware. People who used to work in bitcoin mining used to solve these math problems through the processing power of their computer processors. But gradually they realized that high end GPUs are much more useful for bitcoin mining and for solving these math problems than processors. So now GPU is mainly used in bitcoin mining. But in that case you will need a GPU powerful enough. In addition, various companies now make special hardware for bitcoin mining. For example, Asic (Application-Specific Integrated Circuit Chip) is specially designed for bitcoin mining. Using these high end hardware, you can easily do bitcoin mining without doing any work yourself.
But here comes another issue, that is electricity. Using these high-end hardware, you can mine bitcoin, but don't forget that you will need a lot of electricity or energy to do this. You may be wondering how much more electricity will be needed to run a computer? But no, your PC will need a lot more processing power when you do bitcoin mining. Your CPU, GPU and processor will then be working at almost 100% efficiency. As a result, your hardware will be much more power hungry than usual. Then your electricity bill is becoming another big deal. Well, let's be clear.
Suppose you have a high end PC or a high end setup for bitcoin mining. You do bitcoin mining there every day. Suppose, the bitcoin you earn every day from this setup is worth 5 US dollars, which is about 415 Bangladeshi rupees. In other words, the amount of bitcoin you can earn every month from this setup is worth 12,450 Bangladeshi rupees. But, let's say this high end setup consumes about 420 rupees worth of electricity per day. In other words, this setup of yours consumes 12,600 rupees of electricity every month. Now you have to think about how much profit you have made and if there is any profit at all.
This is the biggest problem of bitcoin mining in a country like Bangladesh. I have given only one example above. Yeah Al that sounds pretty crap to me, Looks like BT aint for me either. You might gain. But what you earn or how little you earn after paying the electricity bill may not seem enough to you. So bitcoin mining should be done in a place or in a country where the price of electricity is low. However, if you want to do bitcoin mining, you must calculate in advance how much you will spend per month on the hardware you are using and how much bitcoin you will earn per month is enough for you compared to your expenses. If you think that's enough, then do bitcoin mining.
And, bitcoin mining is not a very difficult task. You only need to install a trusted mining program on the computer on which you will be mining. E.g., NiceHash. Then you just need to install the program on the PC and run the software and give your bitcoin address. Then just keep running the PC and your program, as long as you want to do mining. As much Bitcoin profit as you get, it will be sent to your Bitcoin address from time to time.
Bitcoin Cloud Mining
The origin of cloud mining is to solve the problem mentioned above. Basically you don't mine in your own setup, you invest in bitcoin in any third party organization or company and website and they will mine bitcoin for you using their hardware and mining setup and give you a certain amount of profit. For example, if you invest বি 100 worth of Bitcoin in 1 year of contact with them, they will give you a profit of ১০ 10 per month for the next year. Which, of course, made the video an overnight sensation. It sounds good to hear, but it has a bigger problem. That is, scams.
Because, it is very difficult to find such a legit cloud minor site. 90% of such cloud mining websites are scams. They will take investment from you in Bitcoin and send you some light profit for a few days and then they will take more investment from you in the name of giving more profit and finally they will embezzle all your investment and scam you or leave the site down. As a result, if you invest, you will lose a lot of money. But this does not mean that all cloud mining sites in the world are scams. There are also a few legit cloud mining websites that you can trust. As such, HashFlare is quite popular as a cloud mining site. But that doesn't mean you can blindly believe them. Because, maybe they haven't scammed so far, but they can scam in the future. There is no guarantee that any cloud mining site will ever scam.
If you want to do cloud mining, know in advance about the website you are going to use and get feedback from other users. If in doubt, never invest. And if you can't be 100% sure about any site, don't go for cloud mining. Personally, I would not encourage anyone to do cloud mining.
Now you must have got some idea that your bitcoin mining should or should not be done and in some cases it is a waste of time and in some cases useful. If the matter is not clear to you yet, then again,
If you want to mine using your own setup, be sure to calculate in advance how much you will spend per month on the hardware you are using and whether the amount of bitcoin you will earn per month is enough for you compared to your expenses. If you think that's enough, then do bitcoin mining.
If you want to do cloud mining, know in advance about the website you are going to use and get feedback from other users. If in doubt, never invest. And if you are not 100% sure about any site, do not step towards cloud mining. Personally, I would not encourage anyone to do cloud mining.
Another thing to keep in mind is that the Bangladesh government does not support bitcoin. In other words, Bitcoin is legal in many other countries, but Bitcoin is not legal in Bangladesh. So if you have any problem with your mined bitcoin, you will not get any legal help.
I am ending here like today. I hope you like the post. If you have any questions or comments, please let us know in the comments. Stay well. Allah Hafez
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