Bitcoin mining has one main purpose. This is to create new Bitcoin transactions as blocks from the previous transactions on the blockchain. Bitcoin miners do this by approving and confirming transaction details by solving transaction-related algorithms to produce ‘proof of work’. They then get a set number of bitcoins for their efforts. In the following sections, all the details like the process and risks will be explained so you can learn everything you need to know about bitcoin mining and what it can do for you.
‘Proof of work’ is what bitcoin miners use to refer to the end-goal of solving a complex computation. This is to confirm and approve the information stored in a blockchain. In return, bitcoin miners are given a certain number of bitcoins. However, it’s not as easy as it sounds.
Bitcoin mining is highly taxing for a number of reasons. It needs:
If a miner is lacking one, mining becomes incredibly difficult. Because of this, a variety of special hardware has been created for bitcoin mining. One of these is the ASIC or Application-Specific Integrated Circuit chips.
Although there are dedicated digital farms worldwide for mining, the risks that come with it grow as well.
In August 2019, a Ukranian nuclear power plant’s security was breached because of mining. It is said that employees were using the plant’s energy to mine bitcoin. Additionally, in October 2019, a mining farm in China run by Innosilicon burned down for unknown reasons. The fire claimed up to €8.1M in damages.
It was even stated in a 2018 study that bitcoin mining’s carbon emissions were dangerous. They would increase the world’s temperature by 2 degrees Celsius in only two decades if bitcoin mining continued. As long as bitcoin mining efforts continue to be done haphazardly, its dangers can’t be avoided.
Bitcoin mining is necessary for bitcoin to survive. So, as long as bitcoin exists, mining won’t be going anywhere. Because of this, mining efforts can’t be avoided. Instead, they must be adapted to, so they don’t pose a threat.
While Bitcoin mining can be dangerous, there are also measures to keep it safe. Around the world, miners are finding new, eco-friendly ways to mine bitcoin. Bitcoin mining is incredibly beneficial to the digital ecosystem and market, so it won’t be going anywhere anytime soon. If you’re a current or aspiring miner, make sure to do it responsibly.