Bitcoin mining is a very competitive form of commerce. Before going any further, you should know that most Bitcoin users do not mine. Unless you’re just mining for fun, you need to find a way to do it very efficiently so you can generate profits.
If you want to get bitcoins on the basis of accurate computing power but you do not want to buy the hardware yourself, you can buy a mining contract.
As we know about Bitcoin, there is no central bank that produces Bitcoin just like the printing press. In the case of the electronic currency, these are separate computers that belong to the same Bitcoin network and are remunerated for a service: they must make sure that the transactions are working properly. This is called Bitcoin mining.
Bitcoin Mining = Check Blockchain
What does “Bitcoin mining” mean? This involves providing technical resources to the “Bitcoin” network and verifying transactions between users that take place around the world. Whenever one person sends Bitcoins to another, the transaction is checked by the network and then recorded in what is called the “blockchain”. When a user sends money, it starts from his personal account (a wallet for example) which is called an “address”. A sending of money, therefore, corresponds to a transfer from an address A to an address B.
A block is a consolidated series of transactions that occurred over a period of time. We put them in a row and that gives the chain of blocks. On the site available via the link above, simply type an “address” to view all the transactions that took place with this account. And it is precisely this easy way to memorize and find transactions that currently fascinate banks.
How to Check the Chain of Blocks?
The people who put their equipment at disposal to check the blockchain install a software which itself ensures the proper functioning of this one.
The idea is, when a block is created, the miners review it and convert it to what is called a hash (number and letter sequence). It is then hooked to the block and integrated into the blockchain. It should be known that a hash is also calculated using the hash of the previous block, in other words, the chain is strongly linked.
How are Bitcoin Miners Paid?
It is precisely according to the number of hashes that the miner produces that he will be paid. Each “hash” earns him 25 Bitcoins. At the time, it even received 50 Bitcoins but the course of it was much lower. The provision of equipment, it has a cost. The payment thus makes it possible to encourage miners to continue to verify transactions and thus ensure the durability of Bitcoin. These 25 Bitcoins are then added to the existing Bitcoin mass, and this increases the mass in circulation.
Obviously, at this price, the competition is tough to validate the blocks: an independent miner has only a very small chance to validate a block, and that is how many miners decided to join in what is called “mining pools” that distribute money to all members when a block is validated by one of them.
How to Get into Bitcoin Mining?
Two possibilities: either you are a computer expert or you can try the adventure by investing in equipment (although, many experts have told us that it was really difficult to become a beneficiary with this method), or you opt for the Cloud Mining solution.
What is Cloud Mining?
It is a question of virtually buying computer equipment from a provider for a period of one year. It will allow you to be paid in Bitcoins and possibly to make a profitable investment. Nevertheless, know that today Cex.io is the world reference for that.