Bitcoin (BTC) is the largest cryptocurrency in the market and everyone wants to have access to it. While most of us can acquire it, there is a group of people that would like to know how to mine BItcoin.
In this article, we will share with you how to mine Bitcoin, what is Bitcoin mining and more.
Bitcoin is the most popular cryptocurrency in the world. It was released in early 2009 and it has now a market valuation of over $687 billion. There are many economic activities related to Bitcoin. It is possible to send and receive BTC, hold it or use it to pay for goods and services.
In recent months, a large number of companies decided to buy BTC and become part of the market. In the future, more firms could get access to Bitcoin and the crypto industry. Another thing that can be done with Bitcoin is to mine BTC coins.
Bitcoin mining is an activity conducted by Bitcoin users and that allows transactions to be processed in the market. Miners use specialized computers that run on 24 hours and that help the BTC network verify and control the transactions that are processed in the network.
Considering this is a very energy-intensive activity, miners get rewarded for their effort. Moreover, the ASIC miners are very expensive and require low temperatures to run in an efficient way.
Bitcoin mining is one of the main economic activities connected to Bitcoin and cryptocurrencies.
When a person performs a Bitcoin transaction, it is broadcasted to the network. Miners need to confirm the transaction is valid. Bitcoin is a ledger where all the transactions have been registered. This is why miners can check the validity of these coins and confirm they are legit.
The BTC transactions are all of them grouped in blocks. Each of the blocks of 1 MB of space contains information about the transactions that were performed in the last ten minutes. Miners process all the necessary power in order to confirm the transactions.
When a miner or a group of miners find a block, they receive a reward. The current rewards are 6.25 BTC per block. But they will be reduced in the future. Moreover, the transaction fees paid by users are also rewarded to miners. Each Bitcoin block can be processed every 10 minutes.
This is how Bitcoin works.
The Bitcoin halving is an event that takes place every around 4 years and that reduces mining rewards by half. That means that miners will be receiving half of the BTC they were previously receiving for finding a block.
In the last years, Bitcoin experienced three halvings, in 2012, in 2016 and in 2020. The next Bitcoin halving is expected to be in 2024. The first halving reduced the BTC new issuance from 50 BTC to 25 BTC, the second from 25 BTC to 12.5 BTC and the third from 12.5 BTC to 6.25 BTC. The next halving event will further reduce the rewards to 3.125 BTC per block.
This could be one of the reasons why the market continues to move higher over time. A reduction in the new issuance of Bitcoin with an increase in the demand could certainly help prices to move higher. Moreover, several companies are now paying close attention to the market and want to get exposure to the largest digital asset in the world.
After every single halving event, Bitcoin holders and investors believe the price of the digital asset could grow even further. In recent years, Bitcoin has moved from $1,000 in early 2017 to over $37,000 in the first days of January 2021. This shows how the market has been growing and how the Bitcoin price moved higher.
Some analysts consider that the Bitcoin price could move even higher in the future. One of the most popular analysis includes the stock-to-flow model. This model predicts BTC to get closer to $100,000 in the coming months and year.
Other experts consider Bitcoin could be traded between $100,000 to $250,000. The estimations are certainly different and could help investors have an idea of how far BTC could move. JP Morgan, instead, believes that the largest digital asset in the world could eventually get traded at $650,000. However, there is no date for this to happen.
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