Bitcoin mining:Â New bitcoins are entered into circulation or come into the market through bitcoin mining. But it is also a critical component of the maintenance and development of the ledger. It is performed using very sophisticated computers that serve extremely complex math problems or algorithms.
I am sending bitcoin to another person which is anywhere in the world. So the transaction will be verified by a person that is called a miner. Anyone in the world can be a bitcoin miner. But mitcoin mining is not an easy task.
It is very difficult because along with the transaction, extremely complex math problems also come through. So the miners used to solve that complex math problem. And after the transaction is verified, Bitcoin miners receive the coin as it gets back and some bitcoins they receive as a cashback or reward. So this process is called Bitcoin mining.
And this is how the new coins come into the market. Anyone in the world can be a Bitcoin miner, but you will need a higher performance computer and also 8 GPU means graphics processing unit. You will require an application-specific integrated circuit.
In order to set up your Bitcoin mining process, you will require a good power supply along with fast Internet.
Risk of Bitcoin Mining
The risk of mining is often that of financial risk and regulatory one. One could go through all the efforts of purchasing hundreds or thousands of dollars worth of mining equipment that only to have no return on their investment.
This risk can be mitigated by joining mining pools. If you are considering mining and live in an area that is prohibited, you should reconsider. It may also be a good idea to research your countries and regulation and overall sentiment towards cryptocurrency before investing in mining equipment.
So this is very risky to invest in cryptocurrency. One more potential risk from the growth of mining is the increasing energy use as required by the computer systems running in the mining algorithms. While microchip efficiency has increased dramatically for it.
