BITCOIN: a new-age Digital Currency

What is Bitcoin?

Bitcoin is new-age digital currency used as medium of exchange which uses cryptography to control its creation and management. It’s decentralised in nature i.e., no central authority or institution controls its network and allows the users to spend the money anonymously. It involves transfer of currency by sending an e-mail or text message to a person using a wallet app and typing the details of recipient. It is called as cryptocurrency as it uses a different encrypted code for every single transaction. Cryptography is an art of writing and solving codes. Thus, each letter or word or any component of the language can be mapped to arbitrary characters, letters, pixels and numbers so that it is not readable without the proper key. One can use real money to buy bitcoins. Let’s understand bitcoin mining now.

What is Bitcoin Mining?

Bitcoin mining is a complex computing and mathematical process by which the bitcoin miners bring new bitcoins into the world and it is also a process of verifying and adding bitcoin transactions to the public ledger i.e., blockchain. The bitcoin mining process involves assembling a block of recent bitcoin transactions and attempting to solve computationally tough puzzles.

Mining software uses power and resources and computes numerous mathematical algorithms. It provides a reliable algorithm to the ledger to solve the complexity of maintaining it. The blockchain is kept consistent and complete by mining which repeatedly groups newly broadcasted transactions into a block, which are further broadcasted to the network and verified by recipients.

Requirements to Begin Mining Bitcoin

To start mining bitcoin, the following are required:

  1. Competitive mining computers (rigs)
  2. Low-cost power supply
  3. Mining software
  4. Mining pool membership

Observation

Things to consider before beginning bitcoin mining process:

·   In the Bitcoin network, Bitcoin halving is a necessary event that reduces the payout you will receive every four years. Let me share the previous historical data of Bitcoin halving incidents to make things clearer. In the first Bitcoin halving case, the amount of the payout received halved from 50 to 25. In comparison, it halved and in 2016, the incentive was just 12.5 BTC. The payout was also halved last year to 6.25 BTC per mining block of 1 Bitcoin. After four years, it will decline further to 3.125 BTC and begin thereafter.  Ok, how does it affect the miners of Bitcoin?

You will get just 6.25 BTC for mining 1 block of Bitcoin in 2021. Also, 21 Million bitcoins can be extracted out of which 18 Million Bitcoins has been extracted till date. As the competency grows in bitcoin mining, the mathematical algorithm will become more complicated which will result in less profit from mining.

  •     High Processing Device for e.g., Antiminers is another vital factor to consider. If you don’t have the set up for mining Bitcoin, you have to invest a lot of money because buying a single ASIC or GPU device cannot quickly solve them. So, if you don’t have a long-term plan, you can join a mining pool instead of investing in buying new devices. A mining pool is a collective group that crypto miners combine their mining resources to a single network to increase their computational power. The reward will also be divided based on the capacity you contribute to the mining pool.
  •   Power Consumption - You need to keep an eye on electricity consumption before considering Bitcoin mining. Since you need high processing devices for mining Bitcoins, they will consume more electricity.
  •    As we know, Central Government is finalizing a bill which will be tabled in parliament soon to ban cryptocurrencies (Including bitcoin) and they are going to introduce their own digital currency, they can impose fine to Individual and Corporates for using cryptocurrency.

Conclusion

The general interest in bitcoins as an investment and payment mechanism has risen several times in recent times, as bitcoin is the world's first cryptocurrency and is simple to exchange and manage. There is no central entity or trader that regulates or controls bitcoin mining or bitcoin transfers, rendering bitcoin an unsecured payment method. The blockchain platform is impressive and has the ability to improve the digital ecosystem under which the distributed ledger of bitcoin transactions is managed. Many nations have absolutely outlawed bitcoins, including bitcoins, but have adopted and used the blockchain technologies rather effectively with their digital transaction.

Rahul Raj

Comments

Post a Comment

Popular posts from this blog

Do We Need Women Reservation Bill?

                   This article was written by Deepika , Legal Associate at 24X7 Nyaya edited by Abhishek. Introduction: - Reservation policies are not a recent development. The issue of reservations for SC, ST, and OBC has come up on occasion from a number of particular groups. These groups believe that by obtaining reservations, they will be able to obtain representation for their class, but it is important to understand that reservations and representation are two distinct phenomena. Many people don't understand the significance of reservation and representation. Just having a reservation does not guarantee that your voice will be heard. The Women Reservation Bill and its potential to empower women in this country are the main topics of the current debate. Women's empowerment grants them the freedom to make choices, improves their capacity for participation, improves their output in their particular sectors, and supports thei...
Read more

Bilkis Bano Case

                                                                      This article was written by Deepika , Legal Associate at 24x7Nyaya and edited by Abhishek . Introduction: - This incident took place during the 2002 Godhra riots. The event happened after the Sabarmati Massacre, which took the lives of roughly 60 Hindus. They rode the Sabarmati railway, which carried them. They had a pilgrimage planned. When the train was in the Godhra district, it was set on fire. Hindu rioters rampaged throughout this tragedy. They were attributing the tragedy to Muslims. They attacked every Muslim living there and in nearby areas. This case is about a girl named Bilkis Bano, who belonged to the Muslim community. She attempted to flee with her family at the moment she was gang raped. ...
Read more

Article 370 of Indian Constitution

                                                          This article was written by Deepika , Legal Associate at 24X7 Nyaya edited by Abhishek .   Introduction: - Article 370 of the Indian Constitution was a temporary provision that allowances special status to the State of Jammu and Kashmir. This Article is Temporary in that the Jammu and Kashmir Constituent Assembly has the authority to change, omit, or maintain it. It was also regarded as Temporary only until a plebiscite was held to discover the public's preference. But there has recently been a heated argument over whether or not this Article should be considered transitory. The government and judiciary have asserted that these rules are unalterable on several occasions. The history of Article 370 and its current status under the Indian Constitu...
Read more