Bitcoin Mining

When Bitcoin was first introduced to the financial industry, there were mixed feelings about its relevancy and potential as a currency. Just over ten years later, its various digital applications are simply a part of everyday life for many individuals worldwide. As popularity has grown, so too has the need for mining Bitcoin, and this process has some worthwhile potential for those with the time and know-how to earn their own coins.

What is Bitcoin mining?

In the simplest terms, the process of mining involves complicated mathematical puzzles that are solved via specialized computing systems (referred to as Proof of Work, or PoW). Bitcoin miners compete to decode equations, and the first to do so is awarded a set amount for their efforts. Transactions are subsequently confirmed on the crypto’s network for a secure contract.

In many cases, it takes around 10 minutes for the winner to obtain their reward – and this can come in the form of what’s known as a block reward (newly minted Bitcoin) or the fees that have accumulated from transactions in the puzzle’s block.

Why is mining necessary?

It’s no secret that Bitcoin can easily be bought and traded, so why do people opt to mine it instead? First of all, the cost of these coins is predicted to reach a staggering $90,000 by 2025, and trading can be both costly and complicated in its own right. With this in mind, mining has a host of benefits, such as:

  • Mining fees are low
  • Transactions are recorded and secured against hacking and counterfeit issues
  • Privacy is paramount
  • Transactions are instant

Cloud mining solutions

There are several methods for Bitcoin mining, and one of the simplest and most easily accessible is cloud mining. Where the standard approach involves using a Bitcoin mining computer or application-specific integrated circuit, ASIC, or hardware (usually a chip), cloud mining is taken care of remotely via a dedicated platform.

Those hoping to mine in the simplest way possible may want to opt for this solution, as all it will take is a quick sign-up process to rent online mining equipment. For a small fee, users will be able to automatically mine Bitcoin 24/7 (there is typically a contract period for mining of 1-2 years). Cloud services are cost-effective, as there’s no need for specialist hardware or software or electricity and bandwidth, and they can reduce the time and effort when mining manually, too.