By mining, one can earn cryptocurrency without needing to put
By mining, one can earn cryptocurrency without needing to put down the money for it. Yes, that’s the truth!
Also, you can buy crypto with fiat currency; you can trade it on any crypto exchange; and even earn it by playing video games or publishing blog posts on platforms which pay its users in crypto.
Significance of Bitcoin Mining
In addition to lining the pockets of miners, mining plays a crucial role, since it is the only way to release new bitcoin or any other digital currency into circulation.
Apart from the coins minted through the genesis block, every single coin of those bitcoins came into being because of the miners.
There will be a time when bitcoin mining will come to an end. However, bitcoin would still exist, but there would never be any additional bitcoin.
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How Does A Bitcoin Miner Earn?
Bitcoins are mined in units called “blocks.” At the time of writing this post, the block reward for completing a block is 12.5 Bitcoin.
At today’s price of about $3636.26 per Bitcoin, this means the miner would earn (12.5 x 3636) = $45,450.
When Bitcoin was first mined back in 2009, then mining one block would earn you 50 BTC. in 2012, this amount was halved to 25 BTC. In 2016, this too halved to the current level of 12.5 BTC. In 2020, the reward size would be halved again to 6.25 BTC.
If you precisely keep the track of Bitcoin Halving, then you will get to know how this halving impacts the market.
What Do the Miners Do to Get Free Bitcoins?
Miners do the work of verifying previous bitcoin transactions. This convention is meant for keeping the bitcoin users honest, and was conceived by Satoshi Nakamoto.
By verifying the transactions, miners are actually helping to prevent Bitcoin’s double spending problem.
Now, what does double spending mean is that a bitcoin user is spending the same amount twice.
However, this isn’t an issue with physical currency.
“There is a risk that the holder could make a copy of the digital token and send it to a merchant or another party while retaining the original.”
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The Actual Mining Process
Let’s say that you had one legit $20 and a copy of the same. If someone was to try to spend both the real bill and the fake one, then someone who took the trouble of looking at both the bills’ serial numbers would see that they were the same number, and that one of them had to be false.
What a miner does is akin to that they check the transactions to ensure that users have not illegitimately tried to spend the same Bitcoin twice.
Once a miner has verified 1 MB worth of Bitcoin transactions, then the miner becomes eligible to win 12.5 BTC.
The 1 MB limit was set by Satoshi Nakamoto.
1 MB worth of transactions make a miner eligible to earn Bitcoin, not everyone who verifies transactions will get paid out.
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