Bitcoin mining is the process which new Bitcoin are released into the network circulation. People who participate in the Bitcoin mining process are Miners. Bitcoin is achieved by solving a very complex mathematical process to validate transactions in the Bitcoin network.
Bitcoin miners are rewarded with the newly added Bitcoin. This is an enough incentive for people to participate in the mining process. With the increasing value of Bitcoin, this is a very decent source of income for the miners. On the Bitcoin white paper, Satoshi published every aspect of how the Bitcoin network would work, including mining.
Satoshi, the Bitcoin creator/s, encoded 21 million Bitcoin on the Bitcoin source code. This means, there will only ever exist 21million Bitcoin as the maximum supply. AT Bitcoin inception in 2009, each successful mining reward was worth 50 BTC. Although to control, the supply of the Bitcoin in circulation, miners reward is halved approximately after every four years. There has been only 3 halving since 2009, currently the mining reward is at about 6.25BTC. Up to date, about 18.7 million Bitcoin have been mined, making it approximately 90% of the total Bitcoin supply. The next halving will happen in 2024
The solving of the complex mathematical problem for a successful mine is referred to as Proof of Work, which is defined as a consensus mechanism used in by miners to validate transactions in the Bitcoin network. The mining process get more and more complex as the Bitcoin network grows.
Proof of work requires a high computing power; this is why the mining process with a large pool of mining hardware combined, to generate high computing power. It was not as hard the early years of Bitcoin. Just a small set up would get the work done. Right now, as more people joined the mining process it became more and more complex to achieve it with a small mining set up. It requires a very big set up which can be very costly to set up. This large mining pools or centers have the advantage of a high computing power. This high computing power facilitates very high Hash Rate. Hash Rates are the number of guesses the computing power can generate per second. The higher the Hash Rate, the higher the chance to come out as the victor of the mining process. Biggest mining centers can consume energy that can cost up to about $1M per month. This makes mining favorable to countries with cheap electricity, with other countries resolving to green energy.
As more nodes join the Bitcoin network for the mining process, the Bitcoin network becomes more robust. It is a win-win situation for Bitcoin. Even as the Bitcoin miners join the network with an incentive of the Bitcoin reward, they also have a moral obligation to protect the network. The Bitcoin network is hard to compromise, since one will need to control 51% of the Bitcoin network, which is impossible.
How to become a Bitcoin miner.
Bitcoin is an open-source network. As of such anyone can download the Bitcoin source and join the Bitcoin network by adding a node to it. The original Bitcoin source code can be downloaded from https://bitcoin.org/en/
Once you have the Bitcoin source code, you will also need a mining hardware. Which are the most expensive components in the mining setup. It is advised to pick a hardware that is designed for mining for example the ASIC hardware, https://www.amazon.com/ASIC-MINER/s?k=ASIC+MINER , is a pre-built mining rig. While choosing to be a miner, you need to consider that it is not easy to out mine mining firms and mining pools. Mining pools like Foundry USA, accounts to roughly 23% of Bitcoin mining Hah Rate, about 47 EH/s – 47 million TH /s.
You will need am mining software which are free to download and are available for various operating systems. While there are many options for mining software, there might be just a slight or no differences that impact your mining operation.
You will also need a Bitcoin wallet to store your Bitcoin
Optionally since the mining process have become very competitive, people join mining pools where they combine computing power and work together to mine.
The profit is shared proportionally to the amount of work each address was able to contribute to the process.
Bitcoin mining has become a very complex process that might not really favour a small-scale miner but people tend to join the mining pools to participate in the mining process.