Everything about Bitcoin and the Mining process
Not surprisingly, and in line with the revolutionary technological development on the scene, holding coins and paper in your hand has become something old fashioned, because of the emergence and spread of e-banks’ on financial transactions. Not long ago, electronic currencies appeared to us. Let us learn together about what Bitcoin, the coin conquered world in a few years.
Before I start to tell the story of that currency, which has reached over $ 2,500 at one time for a single pet, let me tell you a simplified definition of it.
Bitcoin is a virtual currency that does not have a physical presence, it’s commonly used in encrypted financial transactions, illegal and criminal transactions, as well as its use to save money without personal information, which does not expose the owners of this currency to the seriousness of knowing their identity.
Recently, many countries have been forced to recognize and deal with this currency Officially in their interests and in the markets and companies and it became something recognized.
The most difficult thing for this currency and what makes it difficult to recognize by the states is that it cannot be regulated by the central financial institutions as they move up and down according to the policy of supply and demand from shareholders.
the beginning
Bitcoin was created by Satoshi Nakamoto, who published his research via mail on October 31, 2008 as an electronic financial system.
Nakamoto launched the system as an open source project in January 2009, but despite talking about Nakamoto in this way he is so far anonymous.
This is because it is the name of an unknown person, but the information that has been gathered about him is just speculation that he was a Japanese born in Japan on April 5, 1975.
Attempts to pursue Nakamoto have continued for years. The most famous of these attempts by journalists in 2014, when Newsweek magazine issue Dorian Nakamoto, a 64-year-old US-Japanese man, was issued as the system maker, He denied these allegations completely.
Craig Wright, an Australian who claimed to be the inventor of the Bitcoin system by writing and publishing a blog and through interviews with Wired, the BBC and the Economist in 2015 and 2016.
But it ended because of his inability to give evidence that he was the creator of the system and then he published an apology in which he said:
“I believed that I could do this. I believed that I could put the years of anonymity and hiding behind me. But, as the events of this week unfolded and I prepared to publish the proof of access to the earliest keys, I broke.”
Bitcoins are the currencies used in this system, and are symbolized by the BTC as an example of the “100 BTC”, a virtual currency that is transmitted online, but now it has a semi-physical presence through physical currencies traded with a linked number associated with Bitcoin Address.
FBI’s iPhone hack ended up costing an insane amount of money
This currency currently used by more than 12 million users, each with its own wallet. Each wallet differs from the other in terms of the advantages it offers. This is a quick comparison between the best wallets.
Mechanism of Action
The Bitcoin currency mechanism relies on hiding the identity of the sender and receiver of money. All transactions made by the Bitcoin currency are stored in what is known as Blockchain, a public ledger that is managed and held by users.
The limits of this ledger have been set by the system innovator with 21 million bitcoins. At present there are 14 million Bitcoins There is not much left to fill this ledger.
Of course, the more the number of Bitcoins available, the lower the price will be.
Each user needs to create their own box in the network by using powerful computers called mining, which we will talk about more in the following lines. This process allows the user to earn more coins by making his machine work continuously for days, weeks and even months.
Mining
We now turn to one of the most important paragraphs of the article, the Mining or Mining process, through which Bitcoin coins can be earned.
The mining process is the process by which Bitcoins transfer information is added to the Blockchain ledger.
The benefit of this Blockchain is that it confirms the operations to the rest of the network, so it becomes final that Person 1 has sent Bitcoin to Person 2.
Users are also prevented from retrieving or reusing Bitcoins they have sent.
The process of mining is very complex and requires very high specifications for the computers that perform this process because they are very complex calculations so that some thought that these processes is a solution of the equations need years to resolve.
The process is called mining because it is similar to conventional mining operations such as gold mining due to the length of time it takes to extract a single Bitcoin.
We can easily call the mining process as a process of solving complex mathematical equations by computers with supernatural abilities, and minerals are rewarded by Bitcoin coins.
Bitcoin changes the level of difficulty of mathematical equations, depending on the speed of their solution.
At first, the process relied entirely on central processors in the hardware, until the miners discovered that the process could be done by the graphics cards because they could perform these operations faster, but they use large electrical energy, thus generating very high heat.
A mining product was launched as an alternative to computers, but it also consumed a great quantity of electrical energy.
The first of these products is a chip known as ASIC or Application Specific Integrated Circuit designed specifically for the mining process, this segment of the mining process accelerated with lower power consumption.
To overcome the difficulty of mining more, Miners Pools have been created where miners meet to find solutions better than the miner can do on his own, and in the end each miner is rewarded as much as he works.
The mining currency needs to follow several basic steps:
First: Having a mining device
Many mining devices are available and vary in specifications, gear, performance and price.
The latest of these devices is the S8 Antminer which is very powerful and fast.
You can find out which devices are most suitable for you by using Bitcoin Mining Calculator. The site will ask you for several data and will tell you what you will get by using the selected device according to its specifications.
Second: Get a Bitcoin Wallet
As you mentioned previously, you have to own a Bitcoin Wallet so that you can save your money in it because the currency is a virtual currency only in the world of the Internet you must buy a wallet in order to save your currencies.
Wallets vary between each other so you can change your address every week and other features.
In the previous paragraphs, a compare between the best available wallets you will need to look at.
Third: Finding a Mining Pool
Now that you have got your wallet and your mining device you need to join the mining pool.
The Mining Pool is the place where the miners meet together to use their computers’ capabilities together to get coins and divide them according to each other’s efforts.
You will take a simple logarithmic assembly to solve it and then logarithms will start to increase the level of difficulty, and of course the more you can solve faster you will get more rewards.
Don’t forget to buy a good microphone and a headset to communicate with other miners.
There are several factors to choose from the Mining Pool you want to join:
- Bonus method if it is PPLNS or Pay Per Share or others.
- Charging and withdrawing cost.
- Their rate of finding logarithms and earning Bitcoins.
- How easy it is to withdraw profits.
- Stability of pool.
After you’ve answered all these questions to suit you, choose the mining group you want.
Fourth: Acquiring a mining program
After completing all of the above steps, we go to the software section. You need to select one of the mining programs that suits your computer and the system you are using, whether Windows, Mac or others.
There are several programs available including BitMiner and MacMiner for Mac OS, BFGMiner and 50Miner.
Just read more about each program and what features it offers and user feedback before you start using it so you do not waste your time and money.
Fifth: Start mining
Now you are finally able to start the mining process, you have assembled your device and obtained the wallet and the mining program and joined the Mining Pool, now enter the required information from you in the program you have selected after connecting the mining device to your device – usually through the USB port – The pool you joined, your address, and your user name and password.
The profit-making process depends on your choices for both the speed and the volume of profits.
Buy Bitcoins
There are lots of sites that enable you to buy Bitcoins through traditional payment methods, and you have the choice of either mining and digging yourself or buying currencies with simple steps.
Advantages and Disadvantages
continue the following lines and I advise you not to start anything before Reading it and think about it well.
First: Advantages
Bitcoin has several features including:
Privacy and Anonymously
The most important features of Bitcoin coin, which it had been made for it is privacy and hiding the identity of the sender and the receiver.
With your wallet, you can change your addresses, and your bank or anyone else cannot track you or know your real identity.
You can only be tracked if you use the same address for a long time but it remains just a probability.
Freedom of making payments
You can use Bitcoin anywhere you want, with no payment limits anywhere in the world without restrictions such as those represented by banks.
Less fees
Bitcoin payment fees are very few and cannot be compared to those imposed by banks.
Less risk to merchants
Bitcoin payments are secured by the system. They protect merchants from fraud and protect them from legal liability, unlike transactions with stolen credit cards, which have no bearing on how you get these currencies just receiving them.
Protect your personal data
Unlike other methods such as PayPal and credit cards, there is no harm to you if the merchant site you are purchasing from is hacked because you do not give any sensitive or personal data from you.
You can make your own money
A mining rig offers you the possibility of making a personal mon, which does not need to work for 8 hours or twelve hours to get it.
Second: Disadvantages
Accepting Difficulty
The main disadvantage of Bitcoin is the small number of stores that accept it because they do not trust them and they are rather modern compared to any other payment method, making the purchase order available only from a number of stores, which fortunately are increasing day by day.
Price volatility
Unlike the other relatively stable regular currencies, the Bitcoin currency – which is not under central banks management – is highly volatile. Its price may increase from $ 1,000 a night or go less than $ 100 per night.
That will put you at risk if you buy currencies and causes you losses if you have sold at a lower price than the next day is the reason why not invest many in this currency unlike the usual currencies such as the dollar and gold.
The possibility of government intervention
Many countries still prohibit the use of Bitcoin and even criminalize it, which may expose you to legal liability and may even put you in jail and make you pay a fine if you use this currency in one of the countries that criminalize it.
This is followed by a loss of everything you have lost, loss of your wallet and everything.
Difficult to keep
There is certainly no way to recover your wallet if it’s stolen because whoever steals it may transfer everything into his own wallet.
Unlike credit cards that you can stop immediately after being stolen through a phone call with your issuing bank to prevent using them.
Of course, stealing or hacking the site you use may be more likely than losing your credit card.
These were the most important disadvantages and advantages of the Bitcoin, but they still risked entering this area if you do not know everything and have studied everything that surrounds it well.
I have provided you with brief information about the currency of Bitcoin and its system and the mining process, there is still a lot to know about this process and the currency before you decide to start mining and use this currency.
Share what you know about this currency and the mining process and your experience of the matter in case you have tried in the comments section below to benefit me and the readers to prevent falling in mistakes.
[…] Also Read: Everything you need to know about Bitcoin and the Mining process […]