Despite all the naysayers throughout the years, bitcoin has proven to be resilient, and above all, here to stay. This remains true, even if the cryptocurrency craze has settled down recently. And for those still wondering just what this bitcoin mining thing is really about, and if they can really make money out of it, then the short answer is, yes, you can.
Bitcoin mining is a tech activity that helps users earn some extra cash on the side, but not without a challenge. Fortunately, we’re here to give you some competitive advice that will set you on your way.
Understand That There Is Real Effort Involved
Mining bitcoins is certainly not a casual undertaking that you can indulge in over weekends. While the basic idea behind it is simple enough, the practice of bitcoin mining still takes a lot of work. There is the need from your side to invest a significant amount of money and time when first starting up. You also need to be willing to upgrade your equipment frequently, while constantly monitoring the conditions of the bitcoin market. That is just the beginning!
To earn anything worthwhile while mining bitcoins, you simply must work at it. What’s more, earning money via bitcoin just became even more difficult now that the monetary reward for mining bitcoins has been all but cut in half, a process that is supposed to occur every four years.
So, what is bitcoin mining essentially? Put simply, it is the process of authenticating and legitimising bitcoin transactions. Think of it as being a bitcoin bank teller. Each time a new transaction comes along, it needs to be added to the final bitcoin ledger, or what is known as the blockchain, which serves to record every bitcoin exchange.
Transactions are added up until they reach ‘block’ status, and the block is then set to miners. The miners then employ specialised hardware and data referred to as ‘nonces’ to encrypt the block of transaction data into a hash, or an identification sequence including the block data. The hash is then added to the block, authenticating it and the block is officially added to the blockchain.
When Do Bitcoin Miners Get Paid?
While miners are usually paid when they complete a block, the rate of work can fluctuate based on the number of people around the world making bitcoin transactions. Mining obviously benefits those who are already experienced in the tech world, especially when it comes to encryption and computer hardware.
Without this background, mining will consume even more research and work to keep up with. While newcomers are always jumping into the fray, it’s definitely not a fire-at-will process. This basic introduction to bitcoin mining is just the tip of the iceberg, and if you intend to give it a serious go, you’ll do well to study the intricacies of mining more in depth.
About the author: Louis Stevens
Louis Stevens is part of a team of freelance digital copywriters who works hard to keep his readers on top of the latest finance and business topics so that they don’t have to. Writing about all things of interest to the financially savvy South African, he also works on stories for local businesses focused on BEE consulting.