As reported by Bloomberg, the overall market value of cryptocurrency has surpassed the 2 trillion-dollar mark in 2021 and the continued success of Bitcoin is undoubtedly the catalyst. It is an immensely exciting time to join the finance revolution, and if you’re new to the arena, however, you may be wondering how exactly new digital assets are actually created. So we wrote this blog to introduce you to the world of Bitcoin mining.
So, what is Bitcoin mining?
The extraction of gold and other precious materials through mining processes has existed in the real world for many generations. In many ways, Bitcoin mining is a digital equivalent. It is essentially a procedure that results in new assets being added to the digital environment.
In its most basic definition, Bitcoin mining is the process of adding a block to the chain. Therefore, if you are unfamiliar with blockchain technology you may want to educate yourself on this topic first – and here’s an article on this subject!
Bitcoin mining is the lifeblood of cryptocurrency as it is needed to validate all transactions involving the digital assets. Miners – or rather their computer systems – work to solve complex mathematical equations relating to a ‘block’ of transactions. Once the solution has been found, the new block can be added to the ledger.
And what is the reward for the miner who does this? 6.25 Bitcoins. Or, as of November 2021, $375,000.
However, this reward – which was originally 50 Bitcoins in 2009 – does halve every four years. So, if you want to join the Bitcoin mining revolution, it’s better to do it sooner rather than later.
How is Bitcoin mined?
Once upon a time – Ok, literally just a decade ago but that seems a lifetime ago in the world of crypto – users could mine Bitcoin using standard computers. In today’s climate, Bitcoin miners require advanced machinery and constant access to power supplies.
As well as the hardware, Bitcoin miners need a crypto wallet so that they can be paid their 6.25 Bitcoins. Dedicated mining software that works to complete the mathematical problems will be required too. In short, it’s not a job that you can take on at home due to the outlay – not to mention the negative impact it would have on the carbon footprint.
Partnering with a dedicated organization like Mawson is the best solution. By using High-Performance Computing (HPC) and Modular Data Center (MDC) technology at our purpose-built blockchain facilities, the results are far better for the environment. And, more importantly, for your investment. On a side note, our experts can assist you with issues like tax implications.
To learn more about how Bitcoin mining can help you increase your wealth without having to trade the often volatile digital assets, get in touch with us using the form below.
