Bitcoin Mining

BTC Coins
BTC Coins

To help with auditing the transaction process of sending and receiving bitcoins, bitcoin miners come into the picture. The generation of bitcoins are done by super computers dedicated towards processing mathematically complex calculations. Miners must invest computer processing power and electricity to mine bitcoins and are currently awarded 25 bitcoins every 10 minutes by the bitcoin network.

The protocol is designed in such a way that the mathematical problem will get more and more difficult over time. Analogous to how gold mining gets more difficult over time, so does bitcoin mining. The overall difficulty of bitcoin mining on the network self adjusts every 14 days.

The people who engage in such activities are known as miners and the process itself is called mining. To mine today you need asic (application specific integrated chips) hardware, a very reliable internet connection and considerable electrical power requirements. The other option is to participate in bitcoin mining by purchasing mining shares issued by various miners or sellers of those shares.

The coins generated in this fashion are awarded to the miner. The total coins generated to date through mining is nearly 11.5 million and that is the total number of coins available for circulation today. The coins awarded to miners are halved every 4 years. When bitcoin was first introduced back in 2009, miners were awarded 50 coins every 10 minutes until the end of 2012. Today, miners are awarded 25 coins every ten minutes. In the year 2017 it will reduce to 12.5 coins every 10 minutes. This will continue in this fashion up to 2140 after which the total coins in existence will be 21 million. The mining operation will be yielding a negligible amount of bitcoins (something like 0.000001 every 10 minutes).

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