Bitcoin mining is the exact process of adding transactions to BTC network and updating it on the blockchain. The ledger of previous transactions is named as the blockchain as it is made up from a chain of blocks. The blockchain work to confirm transactions in the network once it happens.
Bitcoin nodes utilize the blockchain to extract legit BTC transactions from certain attempts to prevent respending coins that have already spent somewhere else for another transaction.
Bitcoin mining exists as a resource-intensive and hard task. The number of blocks found everyday by the miners remains growing. Every individual block should contain a “proof-of-work” also called POF to be counted as valid. POF is verified by other BTC nodes every time they resolve a block. BTC uses the hashing power proof-of-work functionality.
The main goal of mining is to let Bitcoin nodes to access a secure, tamper-resistant solid consensus. Mining is the mechanism utilized to introduce Bitcoins into the BTC Network. Miners are compensated with transaction fees other than a “subsidy” of newly mined coins.
Both serve the goal of disseminating new BTC in a decentralized way as well as encouraging people to contribute to the security of the system.
Bitcoin mining is very similar and resembles the mining of commodities such as silver and gold. It requires hard work, and it slowly makes the new mined coin available at the rate that resembles gold and silver from the ground.
What is Bitcoin Mining Difficulty?
BTC mining a block is though because the SHA-256 hashpower of a block’s header must be less than or equal to the targeted in order for the block to be counted by the network.
The issue can be quite simplified for explanation purposes: The hash of a block should start with a certain number of zeros. The chance of calculating a hash that starts with too many zeros is quite low, therefore most attempts should be made in a short period of time. In order to produce a new hash each round, a nonce is incremented. See Proof of work for more information.
Should You Do BTC Mining?
Bitcoin mining is accepted by many people as highly profitable. There were some solid reasons back in January 2018 while BTC value at $20k. Many miners were mining that time sold their mining equipment for the reason mining is not profitable anymore. In my opinion BTC mining has never been truly profitable.
There are better options such as investing in altcoins to build a longer term portfolio rather than dealing with the technical issues of BTC mining. It is of course an individual decision to start BTC mining or not. Nerd people tend to do mining no matter who profitable it is. If you are looking for a quick profit mining is definitely not the right option since it is not as easy as it looks.