Bitcoins can be purchased using real money, but they can also be generated or "mined." Users generate bitcoins by having their computers solve difficult mathematical algorithms that help verify the creation of new bitcoins in the blockchain — the encrypted ledger that records and registers all Bitcoin activity — and the transfer of bitcoins between users. The algorithms become progressively more difficult over time.
Blockchain hosts keep track of all transactions and broadcast new transactions across the host network, incrementally adding to the blockchain. Computers that are participating in the network communicate and agree on updates to the blockchain.
About every 10 minutes, a blockchain host whose blockchain updates have been approved and packaged into a block earns 12.5 bitcoins. When Bitcoin first came into being, the reward was 50 bitcoins, but the reward amount halves with every 210,000 blocks registered, equivalent to about four years.
The total number of bitcoins that can ever be mined is 21 million. The cap prevents anyone from flooding the market and devaluing the bitcoins already in circulation. According to Blockchain.info, which provides real-time updates on bitcoins, at the beginning of 2018, there were just shy of 17 billion bitcoins in existence, or about 80 percent of the total number possible. The projected date by which all 21 million bitcoins will have been mined is 2040.
Bitcoin miners. Credit: Bitcoin.comMining Bitcoin can be lucrative, but it requires up-front investment in robust computer-processing hardware and is not easy. Gone are the days when you could use an old computer.
Some Bitcoin miners rig up chains of high-end graphics cards normally used for computer gaming, but perhaps the best current method is to use a Bitcoin-mining application-specific integrated circuit (ASIC), which is a generic term for a computer chip designed for a specific purpose. (The "system on a chip" in your smartphone is another type of ASIC.)
Each mining ASIC is measured by its power efficiency and price per computation. Mining ASICs can cost anywhere between $400 to a few thousand dollars per unit. Higher-end models will generate bitcoins more rapidly.
Energy usage has become a major issue in Bitcoin mining. According to the cryptocurrency website Digiconomist, the electricity used for the creation of one Bitcoin blockchain block could provide a day's worth of power for 11 average U.S. households.
Once you have the hardware to mine Bitcoin, it would probably be most efficient to join a Bitcoin mining pool, in which a group works together to solve a block. You can work alone, but it will take longer and be less rewarding. To be awarded bitcoins, miners must be able to verify 1MB of transactions and be the first to compute a 64-digit hexadecimal number. Working in a pool increases the possibilities of receiving an award, even if it is shared.
For beginners or those who see mining as a hobby, it may be more worthwhile to mine for other cryptocurrencies that have lower hardware requirements than those for mining Bitcoin. Mining lesser-known cryptocurrencies, which will be discussed later in this article, can earn you the equivalent of a couple of hundred dollars a month.
Source : https://www.tomsguide.com/us/what-is-bitcoin,review-5061.html615