As the world sees more and more interest in cryptocurrencies, it can be hard to stay in the know about the origins and methods in which digital currencies, like Bitcoin, are created.
One of the first cryptocurrencies to be established in the world was Bitcoin, but you might be asking yourself how is Bitcoin created?
Bitcoin is found in an elaborate process called Bitcoin mining. Bitcoin mining is a process in which certain users “mine” for Bitcoins by solving complicated digital puzzles, and adding each Bitcoin found to a publicly traded Bitcoin ledger on the blockchain.
You might still have some questions, so in this piece, we are going to take a deep dive into X facts about Bitcoin mining that you probably didn’t know. Read along and find out what you need to know about the mining process!
Bitcoin Mining Requires Powerful Computers
The process of Bitcoin mining is extremely taxing on a computer. This is why users who mine for Bitcoin must have extremely capable computers with multiple processors and extremely capable amounts of RAM.
When Bitcoin was first introduced to the world, it was possible to mine with a regular at home computer, but now that the world is filled with mining operations, a standard computer will often turn up nothing.
Due to the complexity of the “puzzles” or mathematical computations in the mining process, along with the sheer numbers of miners, in order to complete the mining process first, you need extreme computer power.
The network of miners now is so large, that standard computers simply are not fast enough to solve these puzzles with enough velocity.
In addition to powerful base units, Bitcoin miners are running extremely fast and powerful graphics cards, or GPUs, on their mining set ups as well as application-specific integrated circuits or ASICs. This will give them additional processor power to get them up to the speeds needed to mine for Bitcoin.
There is a Finite Number of Bitcoins to Be Mined
One of the biggest reasons why Bitcoin holds such solid value in the market and gives it long-term viability over other cryptocurrencies is the fact that there are a finite number of Bitcoins that will ever be able to be mined.
The number of Bitcoins that will be able to be mined is capped at 21 million. Currently, there are a little under 19 million Bitcoins in circulation, but this number changes by the minute.
Although only approximately 2 million Bitcoin remain, the future still is bright for miners. According to sources, it will take until approximately 2140 for all of the Bitcoin to be mined. This is due to the fact that the rewards for miners that post to the blockchain is halved every four years.
For example, in 2012 a miner received 25 Bitcoin per block, 12.5 in 2016, and 6.25 in 2020. This number will continue to go down in 2024 and so on. While the reward will diminish for Bitcoin mining, the financial reward is still there as the overall price of Bitcoin has skyrocketed in recent years.
The Value of Bitcoin Has Exploded Over Time
The concept of Bitcoin was derived in 2009, at the time, there wasn’t much known about cryptocurrencies, and many people had not heard of them. Fast forward to 2022 and the price of Bitcoin has skyrocketed.
In 2010, after Bitcoin’s inception, 1 BTC was worth about $0.09 on average. By 2014 the average price of a Bitcoin had gone up to $770.44 per BTC. In 2018 was the first huge jump in which Bitcoin rose to $13,412.44 per unit. If you think that is crazy, in 2022 to date the average price of a Bitcoin is a whopping $47,743!
It doesn’t stop there however– many cryptocurrency experts are forecasting that Bitcoin could rise to over $100,000 per BTC within the next five years. This is due to the scarcity that the finite number of Bitcoins in circulation has created.
It comes down to basic economic principles, the demand for Bitcoin has skyrocketed and is outpacing the supply.
There are some reservations however, as regulatory agencies around the world are scrambling to figure out some way to reign in on cryptocurrency and figure out ways to ensure proper taxation on crypto income. This could have an adverse effect on crypto value.
In addition to regulation, the regular halving of Bitcoin could also come into play in the crypto’s market value.
If you’re looking into Bitcoin, we hope that this piece shed some light into a few things that aren’t as widely known about the painstaking process of Bitcoin mining.
While it can be extremely lucrative, it’s simply a process that not everyone is equipped to do. If you are thinking about getting into the world of mining, we recommend researching as much as you can about the process.