Hello, everyone!
Recently, has the term 'Bitcoin' been popping up in your social circle and news? It frequently dominates the screens with its volatile prices, leaving people dazzled. However, besides knowing it is 'valuable', have you ever been curious about where Bitcoin actually comes from?
Many people have heard of 'mining', but when they think of 'mining', do they imagine taking a shovel to dig stones in the mountains? That's a big misunderstanding! In today's article, we will unveil the mystery of Bitcoin 'mining' and explain it in the simplest terms so that you can fully understand it!
Step one: Bitcoin is not 'dug' out; it is 'calculated' out!
What we usually call 'mining' is actually more accurately referred to as 'calculating mining' or 'validating transactions'.
Imagine that Bitcoin is a huge, public ledger. Every time we buy or sell Bitcoin, it is like making an entry in this ledger.
But who keeps this ledger? Who ensures that these records are authentic and cannot be altered?
At this point, the 'miners' come into play!
Miners don't take shovels to mine; instead, they use specialized computer equipment (which we call 'mining machines') to perform complex mathematical calculations at breakneck speed.
What is the purpose of these calculations? It is to package and validate Bitcoin transaction information and record them onto the Bitcoin 'blockchain'.
Key point: The core work of miners = validating transactions + recording packages!
Step two: Why do these 'calculations'? And why are there rewards?
You might ask, what's the point of all this complicated computing?
There are two reasons:
For security and trust: Bitcoin is a decentralized system with no banks or third-party institutions managing it. Miners compete to calculate to ensure that every transaction is legitimate and valid, avoiding fraud like double spending (spending the same money twice). Their calculations act like a super complex 'lock' on every page of the ledger, making it impossible to tamper.
To receive rewards: Miners invest electricity and computational resources, so they naturally deserve returns! Miners who successfully complete calculations and record a batch of transactions onto the blockchain will receive two types of rewards:
Newly issued bitcoins:
This is the original way Bitcoin was issued; every time a 'block' (which can be understood as a page of the ledger) is successfully recorded, a certain number of new bitcoins will be awarded to the successful miner. This reward is halved periodically, which is also one of the reasons for the limited number of bitcoins.
Transaction fees:
Every Bitcoin transaction comes with a small fee, and these fees are also rewarded to the miners who package the transaction.
So, you see, 'mining' is more like a math competition; whoever solves the problems posed by the Bitcoin system the fastest and most accurately will receive generous rewards!
Step three: Is it still possible for newcomers to 'mine' now?
Seeing this, you might feel a bit tempted: I want to mine and make money too!
However, as a newcomer, let me pour a bucket of 'cold water' on you:
High professional threshold:
Current Bitcoin mining is no longer something that can be done with a regular computer. You need to buy specialized 'mining machines' (usually ASIC miners), which are quite expensive.
High electricity costs:
Mining machines run 24/7, consuming an astonishing amount of electricity. If your electricity bill is high, the costs of mining might exceed the profits.
Intense competition:
There are countless professional mining farms and miners around the world mining 24/7. The probability of an individual trying to mine with one or two machines successfully is extremely low.
Unstable profits:
Bitcoin prices fluctuate wildly, electricity costs and mining machine prices also change, making mining profits unstable.
So, for ordinary newcomers, entering the mining field now is really not a cost-effective choice.
How can newcomers 'participate' in Bitcoin?
If you are interested in cryptocurrency but find mining too complicated, then a more suitable way for newcomers to participate is:
Directly purchasing Bitcoin:
By using legitimate cryptocurrency trading platforms to directly purchase Bitcoin as an investment option.
Understanding cryptocurrency knowledge:
Paying more attention to industry trends, learning the basics of blockchain and cryptocurrency to improve your understanding.
Invest cautiously:
All investments carry risks; the cryptocurrency market is highly volatile, so be sure to invest rationally, within your means, and avoid blindly following trends.
To summarize:
Bitcoin mining is not really about digging stones; rather, it involves using high-performance computers to perform complex mathematical calculations to validate and record Bitcoin transactions, thus earning new bitcoins and transaction fees as rewards.
Although it sounds cool, due to high professional thresholds, high electricity costs, intense competition, and other reasons, for ordinary newcomers, direct mining is no longer the mainstream option.
