Don’t understand how Bitcoin works? Not sure what bitcoin mining is? Don’t worry you’re not an idiot and it’s a very complex process.
Bitcoin uses cryptographic hashing and special hardware to mine efficiently and with less energy use. There are even cloud mining operations some people decide to buy into.
keep reading to find out how to mine bitcoin, what the bitcoin mining process is, how long it takes to mine bitcoin, and even how many bitcoins are left.
What Is Bitcoin Mining?
Bitcoin mining is the process of using brute-force efforts to guess a key to a bitcoin block of transactions. If you were to do this by hand, it would take you years or decades to crack a single, easy hash.
A hash is where the “crypto” part comes from. If you take any string of numbers and letters, such as “I love cookies” and run it through a special algorithm, a unique 256-long string of letters and numbers will get generated. There is no other hash like it since it’s totally unique in the universe.
How Is Bitcoin Mined?
A computer with a GPU can run through hundreds or thousands of them per second. An ASIC machine, built specifically to do the mathematical formula for hashing on a hardware level, can do them even faster. This method of validation has the name “proof of work” or PoW.
The process goes like this:
- Transactions get verified as valid using a Merkle tree
- Transactions get wrapped into a block of a certain size
- The most recent block header gets used for the newest block as a hash code
- The mining computer does the PoW
- A new block gets added to the peer-to-peer ledger network
- The successful miner gets their reward
How Many Bitcoins Are Left?
If you’re wondering how many coins are left, it’s a combination of a few other questions. They are something like:
- How long does it take to mine bitcoin?
- How many bitcoins are left unmined?
- How many bitcoins are “lost?”
- How does Bitcoin halving affect the time it takes to get new bitcoins?
The question of how long it takes is tied to the difficulty setting of the hashing algorithm. The network automatically determines after a set number of hashes what the difficulty rating should be to keep the transaction time to roughly ten minutes.
There are a few reasons for this, such as bitcoin halving. This is when every 210,000 blocks (approximately every four years) the number of bitcoin rewards for mining is halved. This helps to increase the price of Bitcoin dramatically, but usually about eight months after the halving.
What Happens When Bitcoin Runs Out?
The number of total Bitcoins is 21 million, and it’s expected that the remaining nearly 2,000,000 bitcoin will be mined by about 2140. Although it may never actually happen if it keeps halving.
After all bitcoin that can be mined are mined, people will no doubt try to break individual accounts that are “lost.” Those are mining addresses that hold bitcoins from the start of the bitcoin boom, but have since gotten lost due to deaths or lost passwords.
It’s not impossible to “hack” an account, only excessively expensive. By the time that we reach 2140, the thousands of bitcoins in an account would definitely be worth the immense cost of breaking in.
How to Mine Bitcoin: The Wise Miner
Now that you know how to mine bitcoin, are you going to try to get into the market? If so, there’s more than one way to skin a cat or get the nonce for a hash. Keep browsing our articles for the best way to get into Bitcoin and other cryptocurrencies!