What is Bitcoin mining? How Bitcoin mining really works? What is Bitcoin cloud mining? Read this article and discover everything you need to know!
What is Bitcoin Mining and How Bitcoin Mining Really Works?
Bitcoin mining is a decentralized process which has 2 very important functions – it creates new bitcoins in each block and confirms transactions in a secure way when enough power or effort is devoted to a specific block.
The process goes something like this, it first verifies the transaction and confirms it is valid, then it bundles the transactions in a block and select the header of the block and insert it as a hash into the new block. After that, it solves the proof of work problem, and finally, when a solution is found, a new block is added to the blockchain and spread through the network.
You probably wonder what is exactly proof or work? Well, it is a method to make sure the information (the new block) is made. The process costs processing power which can be translated to hardware, time, and energy, however, it is quite helpful as it allows you to check if the requirements are met.
What is Mining Difficulty?
In order to better understand the bitcoin mining process, you should also know what mining difficulty really is. It is a measure of how challenging and difficult is to find a hash below a specific target value during the method proof of work. Usually, the target value is recalculated every two weeks or every 2016 blocks.
It goes something like this – when more miners join the network, the block creation rate automatically increases and the average mining time decreases. Please keep in mind that the ideal average mining time is 10 minutes per block. After that, the mining difficulty grows and block creation rate goes down. The average mining time restarts or goes back to normal.
What is Bitcoin Cloud Mining?
Now that you know more about Bitcoin mining, it is time to learn about Bitcoin cloud mining as well. Cloud mining allows you to buy mining capacity of hardware. It allows users to earn Bitcoinswithout managing electricity, hardware, software, bandwidth, and etc. The Bitcoin mining process is done remotely. In other words, it allows you to concentrate on your Bitcoins and not deal with any of the usual hassles encountered when mining Bitcoins, for instance, heat, hosting issues, electricity, and other troubles.