Have you become interested in Bitcoin? Over the past several years, this mysterious cryptocurrency has captured the minds of many, and many would-be miners dream of the potential profits they can make. However, they do not always understand exactly how the system works and what the Bitcoin miners are solving in order to gain those profits.
The Problem and the Solution
At the core, Bitcoin miners are essentially solving math problems, but it is somewhat more complicated than that. Bitcoin has linked blocks in transaction records, and these records are a documentation of who has the Bitcoin and the history of the coin. The mining machines try to solve the hashes of a block using an algorithm called SHA256. The hash creates a repeatable string of numbers and letters that are irreversible, and the outcome is going to be a 256-bit string. For Bitcoin to work properly and to be secure, which is the reason for Bitcoin, the idea of mining was created. This ensures that no one can change the record of the blocks.
For the miners to produce a Bitcoin, they utilize software that can take care of the mathematical problems. Of course, because the calculations can be difficult, it can take quite a bit of time to solve those problems because they need to make sure that the hash that’s produced is lower than the Bitcoin network threshold. When that occurs, it will create a block that is deemed to be valid. If the hash is too high, then the miner has to continue.
When they do solve a block, they can receive a Bitcoin. When the block is solved, it will then be added to the blockchain. The block will contain the transactions that have happened within the Bitcoin network recently.
The Right Equipment
Fortunately, you will not have to solve this type of problem on your own. Those who want to get into Bitcoin mining will be using special hardware and software that take care of all of the hard work for them. In the past, it was possible to mine Bitcoin using a CPU or a GPU. However, the difficulties have increased, and there needs to be more power and speed when it comes to solving a block. Today, the best and most viable way to get into Bitcoin mining is by using an ASIC machine, such as the Antminer S9. These can solve trillions of hashes in a single second, all with the goal of solving the block.
Still, it is nearly impossible to solve on your own when you are using just one, two, or a handful of machines. For this reason, most of the miners today join pools. They combine their hashing resources to help solve these blocks faster. It can still take some time, certainly, but it is much faster and more efficient than trying to do it all on your own. The profits are split amongst the pool members. This can also provide for faster payouts, as the threshold is often low depending on the pool that you are using.
The most important thing to remember when it comes to Bitcoin miners and solving problems is the better quality the miner and the faster the miner the easier it will be to solve. This will equate to more overall profit, but it also involves a greater initial cost.
Understanding at least the basics of how the blocks and the blockchain works is important for those who want to get into this field. Take the time to learn how it all works and then find the equipment that will help you to start earning a profit.