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Part 2; Do you wish to Mine Bitcoin??
- As prices of cryptocurrencies and Bitcoin in particular have skyrocketed in recent years, it’s understandable that interest in mining has picked up as well. But for most people, the prospects for Bitcoin mining are not good due to its COMPLEX NATURE and HIGH COSTS .
Here are the basics on how Bitcoin mining works and some key risks to be aware of🤔.
When computers on the network verify and process transactions, new bitcoins are created, or mined. These networked computers, or miners, process the transaction in exchange for a payment in Bitcoin.
Bitcoin is powered by Blockchain, which is the technology that also powers many other cryptocurrencies.
A blockchain is a decentralized ledger of all the transactions across a network.
Groups of approved transactions together form a Block and are joined to create a Chain. Think of it as a long public record that functions almost like a long running receipt.
Bitcoin mining is the process of adding a block to the chain.
How Bitcoin mining works👇
In order to successfully add a block, Bitcoin miners compete to solve extremely complex math problems that require the use of expensive computers and enormous amounts of electricity.
- The computer hardware required is known as application-specific integrated circuits, or ASICs, and can cost up to $15,000+.
ASICs consume huge amounts of electricity, which has drawn criticism from environmental groups and limits the profitability of miners.
To be continued..............
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