Mining: what is it?

Unlike traditional currencies printed by banks, cryptocurrencies, the most popular of which is certainly Bitcoin, are mined. The objective of mining is to secure the transaction chain against a few fragments of Bitcoin.

Solving complex computational problems is how computers are used in Bitcoin mining. Solving these issues then allows transaction blocks to be created all the way down the blockchain.

This chain of blocks is at the heart of Bitcoin and makes it possible to store and secure information transactions in a decentralized manner. The blockchain contains the complete history of all the exchanges made and since it is decentralized and not governed by a central authority, everyone can confirm their integrity.

Thanks to the power of their server farms, the miners’ mission is to seal these blocks to secure them and register them within the chain which therefore appears to be an open accounting book. In fact, the work of miners ensures the proper functioning of the blockchain. For this reason, they are paid.

Mining is no longer profitable for individuals

The Bitcoin mining model is no longer profitable for individuals. In particular, this generates significant expenditure in terms of electricity. Only industrial sites today are capable of efficiently producing Bitcoins.

While in 2019, solving one of these complex calculations to close a block in the chain resulted in 50 Bitcoins reward, this figure was halved in 2012 to 25 BTC, then by two again in 2016. at 12.5 BTC then again in 2020 at 6.25 BTC.

It must be said that the competition is tough and above all, the total number of Bitcoins is limited to 21 million. It is estimated that the last Bitcoin will be produced – mined – around 2140.

But what will happen after the creation of the last Bitcoin? Since miners ensure the proper functioning of the blockchain, one can legitimately wonder why they would keep their server infrastructure after the creation of the very last Bitcoin. So what would they have to gain?

On the contrary, minors should continue to ensure the operation of this chain. Indeed, each of Bitcoin’s transactions comes with a commission. It is therefore part of this commission that will be paid to minors. Also, since a limited amount of Bitcoins will be in circulation, they will increase in value, as will this commission.

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