In the past few years, cryptocurrencies have become more mainstream like never before. We all know Bitcoin has outperformed almost every other financial asset and investment during the pandemic period. With some investors getting lifetime gains in periods as low as ten or eleven months, there is no doubt that the digital currency is going to become bigger in the coming days.
“Bitcoin or any other cryptocurrencies come into being after a process referred to as ‘Mining’. The people who mine Bitcoin and other cryptocurrencies are known as miners.”
The term draws antecedents from gold mining, as both Bitcoin and gold, have been cumulatively taken to mean a store of value. In this article, we are going to look at some of the top facts you should know about Cryptocurrency Mining.
However, before we get to the facts list, let us first look at the meaning of cryptocurrency mining.
Cryptocurrency Mining: Meaning and Definition
When we hear the word mining, our mind automatically wanders off and picks up images of huge earth-moving vehicles, axes, men in boots, and so on. However, crypto mining is a bit different than traditional mining for precious metals.
When it comes to mining cryptocurrencies like Bitcoin and others, miners use heavy-duty computer hardware to solve complex mathematical equations on the network. The complications of the equations can be taxing on the computers.
Crypto Mining helps in two main things-
- It leads to the creation of new cryptocurrencies
- It helps in making the transaction network truthful
Miners are responsible for maintaining all the transaction histories as well. Whenever a new block of transactions is added to the Blockchain, it is the responsibility and duty of miners to ensure that the same is 100% accurate and without any issues. You can also read more here about mining-related issues and different modes of bitcoin theft.
List of 5 Top Cryptocurrency Mining Facts
China and Iran Leading the Crypto Mining Front
While many people think it is the United States, which is the world’s crypto mining hotspot, in reality, it is not. Even though there has been a lot of legislation against mining operations in China, the country continues to be one of the most preferred mining destinations. In addition to China, Iran is slowly attracting a lot of miners based on its cheap energy offerings.
A Block of Bitcoin is created every Ten Minutes
The solving of complex mathematical equations every ten minutes results in the creation of one Bitcoin Block. When the first Bitcoins were mined in 2009, Satoshi Nakamoto envisaged it to reward 50 Bitcoins. Every four years, the BTC reward was halved. It went from 25 in 2012 to 12.5 in 2016 and the latest May halving saw it fall to 6.25.
Bitcoin Mining requires a lot of Energy Consumption
According to a study done by Morgan Stanley, the total energy requirement of the Bitcoin mining network can power over 2 million homes in the United States! If you break this down, a single Bitcoin transaction requires about 215 kilowatt-hours of energy! This is also one criticism levelled against cryptocurrencies by many environmental groups.
Thousands of Individuals are involved in Mining
Just to give you a figure, according to data, there are nine or ten big mining companies, which have monopolized the world. There are more than 100,000 miners all over the world working in more than a hundred sister mining companies owned by the big 10. Poolin, BTC, and Slushpool are the biggest names in the crypto mining world.
16 Million of the entire 21 Million Bitcoins has already been mined
Like gold, Bitcoin was intended to be a limited asset. In the last twelve-odd years, Bitcoin miners have already extracted 16 million Bitcoins in the world. The remaining ones, around 5 Million are likely to be completed by 2030. With Bitcoin halving taking place every four years, miners have to pay attention to their investments and profits from mining.
The Final Word
There are many countries that seek to attract miners in a major way by offering cheap power and electricity. They do this with an aim of benefitting from taxation and generating employment opportunities in their districts. Can you add to the list of facts about Bitcoin mining? Let us know in the comments section below.