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What is Bitcoin? What is Bitcoin mining?

Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

Mining is the process of spending computing power to process transactions, secure the network, and keep everyone in the system synchronized together. It can be perceived like the Bitcoin data center except that it has been designed to be fully decentralized with miners operating in all countries and no individual having control over the network. This process is referred to as "mining" as an analogy to gold mining because it is also a temporary mechanism used to issue new bitcoins. Unlike gold mining, however, Bitcoin mining provides a reward in exchange for useful services required to operate a secure payment network. Mining will still be required after the last bitcoin is issued.

How does Bitcoin mining work?

Anybody can become a Bitcoin miner by running software with specialized hardware. Mining software listens for transactions broadcast through the peer-to-peer network and performs appropriate tasks to process and confirm these transactions. Bitcoin miners perform this work because they can earn transaction fees paid by users for faster transaction processing, and newly created bitcoins issued into existence according to a fixed formula.

For new transactions to be confirmed, they need to be included in a block along with a mathematical proof of work. Such proofs are very hard to generate because there is no way to create them other than by trying billions of calculations per second. This requires miners to perform these calculations before their blocks are accepted by the network and before they are rewarded. As more people start to mine, the difficulty of finding valid blocks is automatically increased by the network to ensure that the average time to find a block remains equal to 10 minutes. As a result, mining is a very competitive business where no individual miner can control what is included in the block chain.

The proof of work is also designed to depend on the previous block to force a chronological order in the block chain. This makes it exponentially difficult to reverse previous transactions because this requires the recalculation of the proofs of work of all the subsequent blocks. When two blocks are found at the same time, miners work on the first block they receive and switch to the longest chain of blocks as soon as the next block is found. This allows mining to secure and maintain a global consensus based on processing power.

Bitcoin miners are neither able to cheat by increasing their own reward nor process fraudulent transactions that could corrupt the Bitcoin network because all Bitcoin nodes would reject any block that contains invalid data as per the rules of the Bitcoin protocol. Consequently, the network remains secure even if not all Bitcoin miners can be trusted.

How does mining help secure Bitcoin?

Mining creates the equivalent of a competitive lottery that makes it very difficult for anyone to consecutively add new blocks of transactions into the block chain. This protects the neutrality of the network by preventing any individual from gaining the power to block certain transactions. This also prevents any individual from replacing parts of the block chain to roll back their own spends, which could be used to defraud other users. Mining makes it exponentially more difficult to reverse a past transaction by requiring the rewriting of all blocks following this transaction.

What do I need to start mining?

In the early days of Bitcoin, anyone could find a new block using their computer's CPU. As more and more people started mining, the difficulty of finding new blocks increased greatly to the point where the only cost-effective method of mining today is using specialized hardware.


BTC
Shut Down
Issue amount 21000000
24 hours volume 3.92M
24 hours turnover $ 77.29B
Market Direction Short
Panic Index 20 (Extreme panic)
Swap Rate 20.48%
Market Value Proportion 38.60%
market value $ 2,048.87 x 100 million
24 hour increase 0.24%
Computing power 222.66 EH/s
daily output 0.00000392 BTC / T
Halving time

The public chain will have a halving cycle to maintain the value of the currency, and the market will rise sharply after halving in history.

Completed
Earnings volatility

The computing power of the entire network is due to the increase and decrease of mining machines, which affects the average distribution of revenue. If the computing power decreases, the average revenue will increase, and if the computing power increases, the average revenue decreases.

+67.05%
ETH
Shut Down
Issue amount 121630728
24 hours volume 27.52M
24 hours turnover $ 37.37B
Market Direction Long
Swap Rate 22.46%
Market Value Proportion 17.18%
market value $ 808.87 x 100 million
24 hour increase 0.64%
Computing power 855.24 TH/s
daily output 0.00001549 ETH / M
Halving time

The public chain will have a halving cycle to maintain the value of the currency, and the market will rise sharply after halving in history.

No halving expected
Earnings volatility

The computing power of the entire network is due to the increase and decrease of mining machines, which affects the average distribution of revenue. If the computing power decreases, the average revenue will increase, and if the computing power increases, the average revenue decreases.

+372.30%
LTC
Shut Down
Issue amount 84000000
24 hours volume 11.23M
24 hours turnover $ 606.00M
Market Direction Short
Swap Rate 15.76%
Market Value Proportion 0.39%
market value $ 22.25 x 100 million
24 hour increase -0.45%
Computing power 485.80 TH/s
daily output 0.00001511 LTC / M
Halving time

The public chain will have a halving cycle to maintain the value of the currency, and the market will rise sharply after halving in history.

No halving expected
Earnings volatility

The computing power of the entire network is due to the increase and decrease of mining machines, which affects the average distribution of revenue. If the computing power decreases, the average revenue will increase, and if the computing power increases, the average revenue decreases.

-7.26%
DASH
Shut Down
Issue amount 18900000
24 hours volume 797.46K
24 hours turnover $ 33.90M
Market Direction Short
Swap Rate 7.29%
Market Value Proportion 0.04%
market value $ 3.68 x 100 million
24 hour increase -9.17%
Computing power 2.35 PH/s
daily output 0.00024754 DASH / G
Halving time

The public chain will have a halving cycle to maintain the value of the currency, and the market will rise sharply after halving in history.

Completed
Earnings volatility

The computing power of the entire network is due to the increase and decrease of mining machines, which affects the average distribution of revenue. If the computing power decreases, the average revenue will increase, and if the computing power increases, the average revenue decreases.

-58.77%
DCR
Shut Down
Issue amount 21000000
24 hours volume 37.92K
24 hours turnover $ 954.47K
Market Direction Long
Swap Rate 0.26%
Market Value Proportion 0.03%
market value $ 2.51 x 100 million
24 hour increase -5.24%
Computing power 85.24 PH/s
daily output 0.00000354 DCR / G
Halving time

The public chain will have a halving cycle to maintain the value of the currency, and the market will rise sharply after halving in history.

No halving expected
Earnings volatility

The computing power of the entire network is due to the increase and decrease of mining machines, which affects the average distribution of revenue. If the computing power decreases, the average revenue will increase, and if the computing power increases, the average revenue decreases.

-87.59%
ZEC
Shut Down
Issue amount 21000000
24 hours volume 1.37M
24 hours turnover $ 81.08M
Market Direction Short
Swap Rate 8.95%
Market Value Proportion 0.09%
market value $ 5.35 x 100 million
24 hour increase -7.05%
Computing power 9.71 GH/s
daily output 0.00028412 ZEC / K
Halving time

The public chain will have a halving cycle to maintain the value of the currency, and the market will rise sharply after halving in history.

Completed
Earnings volatility

The computing power of the entire network is due to the increase and decrease of mining machines, which affects the average distribution of revenue. If the computing power decreases, the average revenue will increase, and if the computing power increases, the average revenue decreases.

+61.30%
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