What is Bitcoin Mining? Thorough Explanation Of Methods Used For Bitcoin

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methods used for bitcoin

Bitcoin is a virtual currency and is considered the first virtual currency in the world. As the general term “virtual” currency indicates, the currency itself does not exist, it is made up of a collection of transaction records such as “A sent 1 BTC to B”, and these transaction records By collecting data in chronological order, it has become clear that “Mr. B owns 1 BTC”. (“BTC” is a notation for Bitcoin.) These transaction records are grouped into “blocks” that are generated at regular intervals, and each block is linked in a chain to record all transaction details. I will do it. This is the method called “blockchain”. The transaction records recorded by the “blockchain” theoretically cannot be rewritten retroactively in time series, so there is no risk of tampering. The reliability of such transaction records is very important as one of the reasons why bitcoin has come to function as a currency. Use the wealth matrix to make money.

By the way, bitcoin is sent and received over the Internet, but its communication method is a little different from browsing websites and sending and receiving emails. When browsing websites and sending and receiving e-mails, these communications are handled by the client, which is the terminal that browses and sends and receives, and the server, which manages data etc. The terminal requests the server terminal to “display this website’s data,” “send this email,” etc., and the server executes it to handle various communications. (These communication methods are generally referred to by the names such as “client / server model”.) However, this “client / server model” is not used for sending and receiving bitcoin, and communication is called “P2P”. Method is used. P2P is an abbreviation for “peer to peer”, which is a communication format characterized by peers communicating with each other. In this communication method, the roles of client and server do not exist, and the terminal that sends bitcoin (bitcoin) and the terminal that receives bitcoin (bitcoin) directly communicate with each other.

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Due to these characteristics of sending and receiving, bitcoin does not require an issuer or administrative body such as a state or central bank, unlike legal currencies such as the Japanese yen and the US dollar. I explained that bitcoin manages transaction records using a blockchain, but how can anyone prove that these transaction records are correct without the issuer or management organization? Is it? “Mining”, which is the main subject of this issue, appears here.

What is bitcoin mining?

As mentioned earlier, Bitcoin manages its transaction records through a mechanism called “blockchain”. One of the reasons why bitcoin is valuable is that this “blockchain” ensures the reliability of the transaction records, so when transaction records are added, past transaction records are also added. Transaction records must also be verified for integrity and kept consistent. A calculation method called “hash function” is used as a method for maintaining the consistency, but this requires a huge amount of calculation.

To handle this calculation, bitcoin therefore employs a method of borrowing excess processing power from a volunteer computer connected to the network. Participating your own computer in the calculation process is called “mining”. The reason why it is called mining (mining) is that the computer that performed this calculation is actually issued with a new bitcoin as a reward. In addition, bitcoin has the feature that the maximum number of issuance is set at 21 million. It is called “mining (mining)” because it is similar to minerals such as gold in that the mechanism of such rewards and the number of issued cards are limited. Is called a “miner”.

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How to start mining bitcoin

I think that some people may want to start mining (mining) themselves because they heard that bitcoin can be received as a reward. So how can we start mining bitcoin?

What is needed for mining bitcoin Wallet?

A “wallet” is essential for handling bitcoin. A wallet refers to a “wallet” for storing virtual currency such as bitcoin, and there are various formats. When mining (mining) bitcoin (bitcoin), you also receive bitcoin (bitcoin) as a reward, so it is necessary to prepare a wallet that can store bitcoin (bitcoin).

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