By Malak Sabra
Most of us know what Bitcoin is. Some of us know what mining is, but do all of us know what Bitcoin Mining is? Not all of us, so let’s give you a little insight of what Bitcoin mining means and what the hype is all about.
Let’s start off with the protagonist of our little story, Bitcoin:
Bitcoin is the first cryptocurrency to hit the market and is still today the best-known cryptocurrency among 5,000 others in existence today.
Bitcoin is a decentralized computerized currency that you can purchase, sell and trade directly without a go-between like a bank for example. Every single Bitcoin exchange that is at any point been made exists on a public record open to everybody, making exchanges hard to reverse and hard to counterfeit as well. Basically, whoever buys or sells through Bitcoin can never be traced. That is due to the core to their decentralized nature. Bitcoins aren’t upheld by the government or any other higher authority, and there’s nothing to ensure their worth other than the verification prepared in the core of the framework.
Since its debut in 2009, Bitcoin has risen significantly in value. What was once sold for 150$ a coin, is now sold at a whopping 56,000$ since its supply is limited to 21 million coins.
The way Bitcoin works
The Bitcoin network is a peer-to-peer instalment network that operates on a cryptographic protocol. Clients send and get Bitcoins, the units of cash, by communicating carefully marked messages to the organization utilizing Bitcoin digital currency wallet programming.
Exchanges are recorded into a circulated, recreated public database known as the blockchain, with agreement accomplished by a proof-of-work framework called mining.
Imagine the blockchain as literally an actual chain, anyone can come and add a small piece but the majority already in the chain needs to approve of the new one. Once approved its added and can be edited by anyone in the blockchain.
Messages are communicated on a best effort premise, and nodes can leave and re-join the network freely. Upon reconnection, a node downloads and checks new squares from different nodes to finish its nearby duplicate of the blockchain.
Basically people are able to edit every blockchain, a blockchain doesn’t belong to one node, and it’s open to everyone. While the idea that anyone and everyone can edit a blockchain sounds risky, it’s actually what makes Bitcoin so genuine and secure.
In order for a block to be added to the Bitcoin blockchain network, it needs to be approved by most Bitcoin holders, and the unique code used to perceive clients’ wallets and exchanges should conform to the correct encryption design.
I know this is a lot to understand and albeit, complicated, but once you get the hang of it it’s not as big-worded as it seems.
Bitcoin Mining and how it functions
Bitcoin mining is the process of adding new transactions to the Bitcoin blockchain. People who chose to participate in mining use a process called proof of work which means they deploy computers in a race to solve mathematical puzzles that verify transactions.
To keep people interested in mining, the code used for Bitcoin rewards miners with new Bitcoins each time they complete blocks of verified transactions which are added to the blockchain. With this process, new coins are created, and new blocks are added to the blockchain, creating the loop and the process that people are so invested in today called mining.
If you were to mine Bitcoin in the earlier days, it would have been much simpler than it is now since the Bitcoin code is designed to make solving its puzzles more and more challenging to solve over time, requiring more power and more resources to be successful.
The main takeaway from the entire process of mining is the fact that at the end of each transaction, you get rewarded by a certain amount of Bitcoin, why else would anyone want to invest so much time and money into a project anyway, right?
Of course there are other ways to get Bitcoin, buying it. That’ll cost you around 56,000$ or 84,682,538 LBP if you’re up for it. Essentially this is why mining exists, it gets work done and it reward people with Bitcoin, so you spend significantly less on the resources you need to mine and get rewarded the big bucks in the long run. Miners have to verify 1MB worth of Bitcoin transactions, or a block, to become eligible to be rewarded in return. So you might not get rewarded at all. Why? Here’s why:
1. You need to verify approximately 1MB worth of transactions. Fair enough.
2. You need to have the closest answer, and be the first miner to arrive to the correct answer to the numeric problem. This is the process we mentioned before called proof of work.
How efficient is Bitcoin in Lebanon today?
Going into the mining industry, you will have to have the best resources and a lot of money saved to be able to start mining yourself. Once you get that done you need to go through the steps of becoming eligible to be rewarded and that’s how you get your hands on some cryptocurrency, but how effective is this cryptocurrency in Lebanon?
Like we mentioned, any cryptocurrency like Bitcoin do not have anything to do with the government. It’s more or less an independent currency that allows free reign of how the holder decides to use it and where. Whether to spend it online or save them, to the people who invest in Bitcoin, it’s become more stable than the local currency therefore it’s become the main source of income for many. Convert it into dollars and you have yourself some fresh money right from your home, mind you to make enough you need a while so sit back and get comfortable.
Bitcoin is a tricky subject for most and we understand if it takes you a while to wrap your head around what Bitcoin mining truly is. After all this is just the tip of the iceberg into the world of cryptocurrency.