Contact Us Bitcoin Mining Bitcoin is a modern enigma. This is largely because Bitcoin is not your typical currency. Nor are they regulated by a central bank or subject to monetary policy.
They exist only because people agree they do, as binary code, in cyberspace. The Serious Business of Making Bitcoins All conversations regarding the virtual currency known as Bitcoin inevitably come around to questions of origin. Where do they come from? How do I get them? Because there is no central bank with the power and authority to mint new bitcoins at will there has to be some other way to acquire them.
Acquisition methods currently include purchasing them on bitcoin exchanges like gdax. But while the first two acquisition methods are easy to understand the third, mining, is nowhere near as straightforward as it sounds. Digital Gold With Bitcoin mining there is no open pit, no endless labyrinth of underground tunnels worked by hardy souls with pick axes. No, Bitcoin mining is not a physical affair. It is instead a process carried out almost entirely by computers.
Bitcoins, however, do share one similarity with a precious commodity like gold: And just as it is with gold and oil the more scarce the supply of untapped bitcoins the more difficult it will be to harvest them. But just how does one go about mining bitcoins? Mining the Digital Seam Approximately every 10 minutes These calculations are based on blocks of code the blockchain that contain information about the latest bitcoin transactions.
These cryptographic hash functions ensure that there is no predictable way to resolve the complex mathematical problems generated by the Bitcoin blockchain. This means that computers are the only way to randomly generate enough potential proofs to make the endeavour worthwhile. In the simplest terms, as each batch of bitcoins joins the blockchain the ensuing problems become progressively more difficult and more computing power needs to be brought to bear on them.
This is done in order to restrict the number of blocks found on a given day so that the number remains more or less steady and the currency is allowed to grow in a stable manner. It also provides a fool proof way of validating both the new and the old block, which helps prevent fraud. How does it do That? Anyone who then tries to authenticate any of the affected blocks would discover that their hash was different than the one already accepted and stored with that block and the attempted fraud would be uncovered.
Miners work with and against each other to create a valid hash and once they do they are rewarded with bitcoins, the block is validated and things move on to the new block.
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It a process that requires increasing amounts of computational power as noted earlier but one with sufficient internal checks and balances to produce a reasonably stable cryptocurrency. When Will Bitcoin Mining End? As we mentioned earlier the supply of bitcoins is not infinite. There will eventually be 21 million in circulation but no more.