Bitcoin mining

Also found in: Dictionary, Medical, Financial.

Bitcoin mining

The process that adds new Bitcoin transactions to the distributed ledger known as the "blockchain." While there are thousands of nodes in the Bitcoin network that verify transactions and relay them to other nodes, a smaller number are also mining nodes. A newly verified transaction resides in the Bitcoin memory pool and waits until a miner retrieves it, adds it to a block and places that block on the blockchain. At that time, the transaction is confirmed, and when another block is added, the transaction is confirmed again and so on. At times, there can be traffic jams, and waiting for a transaction to be confirmed can take a while. See Bitcoin confirmation.

Miners Compete With Each Other
Miners compete to publish a new block of transactions by solving a mathematical puzzle. The puzzle takes a massive amount of calculations to solve and ensures that miners spend time and resources using specialized custom-designed hardware to perform trillions of calculations. Several years ago, anyone with a PC could participate. Today, it could take a regular desktop computer months to solve a puzzle, and it takes longer every year because the Bitcoin algorithm was designed to make it more difficult as time passes. Miners join pools to accomplish the task using specialized hardware known as "ASIC miners." Several pools are in China where electricity is less expensive, and as of 2020, the China-based Antpool processes a quarter of all transactions worldwide.

The first miner to solve the puzzle and provide "Proof-of-Work" (PoW) publishes the block and is rewarded with transaction fees and new bitcoins that are automatically generated. If two miners solve the puzzle at the exact same time, the miner that did the most computational work is the winner. The extra work required is what keeps fraudulent miners away, because they might as well do valid Bitcoin processing and glean the profits. See proof of work algorithm and Bitcoin miner.

The Maximum Number of Bitcoins Is 21 Million
The total number of bitcoins will be capped at 21M at some point during the year 2140. The Bitcoin algorithm ensures that the amount of new coins the miner generates for its own account slows down over time. Starting with 50 bitcoins in 2009, by 2013, there were 10.6M bitcoins in existence, and by 2020 roughly 17M. The first four years generated 10 million coins, but the subsequent five years only six million. After 2140, miners' revenue will come only from transaction fees. See block reward.

The Cap Is a Major Feature
Bitcoin proponents claim that the capped total of coins is what makes Bitcoin sound money, similar to having physical gold bars. Just like an ounce of gold, the market may change its daily value, but a devaluation cannot occur due to inflating the money supply. See Bitcoin and cryptojacking.
Copyright © 1981-2019 by The Computer Language Company Inc. All Rights reserved. THIS DEFINITION IS FOR PERSONAL USE ONLY. All other reproduction is strictly prohibited without permission from the publisher.
References in periodicals archive ?
Hut 8 is a cryptocurrency mining company with industrial scale bitcoin mining operations in Canada.
But a revival in bitcoin mining fortunes is happening according to blockchain research group Diar. After the worst months of the downturn, February's mining revenue was the lowest in the last 19 months at just $195 million 10 percent less than January.
Two technicians inspect bitcoin mining at Bitfarms in Saint Hyacinthe, Quebec, in this file photo taken on March 19 (AFP / MANILA BULLETIN)
More than 25 expert speakers from both countries will cover a variety of hot topics such as blockchain technology, startup investment, capital raising, ICOs, bitcoin mining, virtual currency trading, SEC compliance, legal and taxation, etc.
But one company is pushing to make bitcoin mining a bit more sustainable -- and William Shatner is among those at the helm.
He reportedly lured in investors with promises of hefty returns, assuring them of access to the bitcoin mining system.
The offering for Canaan, which claims to be the world`s second-largest bitcoin mining hardware supplier, is scheduled for July, the sources said.
At current levels, de Vries estimates Bitcoin mining uses at least 2.6GW of power per year, and that number could grow to as much as 7.7GW by the end of the year, an astounding half a percent of the entire world's electricity consumption.
I THINK that S T Vaughan ('Beware dangers of crypto mining', Birmingham Mail Talkback, May 3) was quite right to mention the serious issues of 'Bitcoin mining' and its impact on Iceland.
Bitcoin mining is the process of using powerful computer processors
With ample vacant industrial space, very low industrial electricity rates relative to other parts of the nation and cold temperatures effective at cooling machines, Montana is garnering an increasing amount of attention as a potential location amenable to bitcoin mining facilities.
The current Bitcoin mining method, known as 'Proof of Work' is currently very costly and wasteful.