Bitcoin mining has always been an important part of the crypto world. This process is innovative in itself because it resolves the double-spending problem associated with virtual currencies, and it is also the backbone for the decentralization of cryptocurrencies. But as the technology evolved over time, there are essential trends of Bitcoin mining that affect the growth of the virtual currency. That being said, let's take a look at the latest trends in Bitcoin mining.
What You Should Know Bitcoin Mining
Bitcoin mining is a process that encompasses adding new blocks of transactions to the distributed ledger and verifying the blocks of transactions for their legitimacy. Another outcome is the development of new Bitcoin tokens in the network.
Namely, whenever a new block of transactions is added to the blockchain network, new Bitcoin tokens are generated. This means that the mining process holds an important position for the safety of the entire network because it resolves the double-spending problem for the cryptocurrency, and it is also a way for the miners on the network to get compensated.
Actually, when they solve the hash puzzle on the network, they get a block reward in addition to the transaction fees. Overall, the mining process represents one of the most significant aspects of the blockchain network, thanks to its peer-to-peer-based structure. This is a completely decentralized system that relies on the motivation as well as equipment, and computing power of the miners to add the blocks of transactions and verify them.
Moreover, the block reward, which is related to the Bitcoin mining process, is undergoing a change every four years or after 210,000 blocks are included in the network. More specifically, Bitcoin halving cuts in half the block reward of the miners in order to keep the rate at which new Bitcoin tokens are produced on the network stable.
This is one of the crucial reasons why there is a rise in popularity of online trading sites because a lot of users find them accessible for beginners and for anyone that quickly wants to invest in BTC or exchange it for other currencies.
On the official Bitcoin Prime website, for example, you can start trading just by making a deposit of $250. This is a highly advanced automated trading system that is based on machine learning and artificial intelligence algorithm.
Trends in Bitcoin Mining
The rise of the cost of mining and the small block reward are the main reasons why the solo miners were motivated to join forces in mining pools. In the mining pools, the miners work as a group and combine their computing power in order to gain a better competitive status in the network and quickly achieve better results.
They also can share the costs and rewards as well. But, the greatest competition on the blockchain network are mining farms around the world that not only consume a lot of power but also are able to quickly achieve better results just because they work on a larger scale compared to mining pools; some are even registered as a corporation.
However, due to the increased traffic in the blockchain network, we expect more mining pools to work together in order to beat the competitors, and the same is expected for mining farms.
We expect, as the technology evolves over time, for the miners to get access to better equipment. In comparison, mining was facilitated at the beginning on personal computers, which is not a realistic option today.
Today miners have access to high-end hardware, specifically application-specific integrated circuits (ASIC). As we said, mining is a time-consuming and energy-consuming process, and this needs to be taken into consideration whether you're looking to join the blockchain network as a solo miner or as a group in a mining pool or farm.