Bitcoin Mining Explained- Everything You Wanted to Know
Bitcoin mining entails using computers to solve complex mathematical equations and earning coins in return. Miners verify blockchain transactions to earn Bitcoin. Blockchain is a digital ledger that compares to a bankbook. This ledger keeps track of every Bitcoin transaction. Whenever a person solves a hash, they earn Bitcoin.
But solving complex mathematical equations requires computers to run non-stop. That means you need a machine with high processing power. Also, your computer will consume a lot of electrical power. Some people are hacking other people’s computers, using them, electricity, and resources to mine Bitcoin. After that, a hacker can cash on the mined Bitcoin.
How Bitcoin Mining Works
The Bitcoin mining process’ complexity is the main reason why most people opt to use platforms like BitQT to buy and sell this cryptocurrency. With such crypto exchanges, you invest a small amount of money and start trading Bitcoin.
However, you can still try Bitcoin mining. With this process, you earn by verifying blockchain transactions. And this is what cryptocurrencies depend on to maintain their solvency.
Every Bitcoin transaction generates a hash-labeled ID. A hash on the blockchain is 256-bit encryption. Essentially, this is a password. Every computer within the blockchain network attempts to find out this password. And if even a single character is wrong, it means the computer has not solved the hash. All other computers within the network have to verify a computer’s solution authenticity to be declared a winner. And the reward for every correct solution is a Bitcoin.
Solving a hash might not be that hard for some computers. However, a miner needs a fast computer to solve a problem before all the other computers. But, being fast in solving a problem is not the only requirement. The central operating system of a computer tries to provide a solution as quickly as possible. As such, it consumes a lot of electrical power within a short period.
To prevent the burning up of the computer, you have to run powerful fans constantly. That means you might end up spending more money on electrical bills than you can reap from your Bitcoin mining activity.
Is Bitcoin Mining Risky?
In itself, Bitcoin mining is not a risky activity. However, hackers are always looking for ways to mine Bitcoin without incurring the high expenses involved. For instance, a hacker can install cryptocurrency mining malware on several computers and then divide their work among all of them. Thus, the hacker uses all the computers to verify transactions and then earn Bitcoin.
Bitcoin mining requires very high computing power. Therefore, your computer hardware requires constant cooling using unique fans. An average laptop or desktop computer doesn’t have these fans. As such, the CPU will keep overheating and eventually burn up if hacked and used to mine Bitcoin.
How to Avoid this Risk
Secure your computer correctly to ensure that hackers do not use it for Bitcoin mining purposes. Don’t forget that a hacker can use your device to launch attacks on the other devices in your network. Here are simple yet effective ways to secure your device when it comes to Bitcoin mining.
- Avoid using public Wi-Fi networks
- Secure your computer with antivirus, personal VPN, and firewall
Bitcoin is among the most popular cryptocurrency today. Miners generate Bitcoins through a mining process that requires powerful computing and processing power. Unless you strongly believe that the Bitcoin price will keep increasing, you may not recover the amount you invest in mining equipment and electricity. Nevertheless, Bitcoin mining is a safe activity as long as you protect your computer from hackers.
This article has been published in accordance with Socialnomics’ disclosure policy.
