Bitcoin, as a virtual currency, has always attracted much attention for its unique mining method. So, what Bitcoin is mined from? Let's explore the mining mechanism of Bitcoin in depth and reveal the secrets.

In the world of Bitcoin, mining is not a simple act, but a complex and sophisticated calculation process. Bitcoin is generated by "mining", and the mining process is actually the process of confirming transactions and adding them to the blockchain by solving mathematical problems by computers. These mathematical problems are generated by encryption algorithms and require a lot of calculations to find the correct solution, so miners need to invest a lot of computing power and electricity resources.

The mining process of Bitcoin can be simply understood as a competition. Miners from all over the world use their computers to participate in the competition. Whoever calculates the correct answer first will have the opportunity to get a Bitcoin reward. This mechanism ensures the security and decentralization of the Bitcoin network, while also limiting the total amount of Bitcoin, making it scarce and valuable.

In addition to receiving Bitcoin rewards, miners can also earn income through transaction fees. Each Bitcoin transaction requires a certain fee, and miners will prioritize packaging transactions with high fees to obtain more benefits. This also prompted competition among miners, who would continuously improve computing power and efficiency to obtain more rewards.

It is worth mentioning that the Bitcoin mining process is not only profitable, but also involves certain risks and costs. With the development of the Bitcoin network, the difficulty of mining continues to increase, and more computing power and electricity input are required to obtain Bitcoin rewards. Moreover, the costs of equipment loss and electricity expenses in the mining process cannot be ignored, which requires miners to make a comprehensive assessment when considering the benefits of mining.

Although the Bitcoin mining process is full of challenges, for many people, it is an opportunity to invest and make money. Some people even specialize in setting up large mining farms to obtain more Bitcoin rewards through large-scale operations. They not only invest a lot of money and resources, but also need to keep up with technological development to maintain their competitiveness in the mining field.

In general, the Bitcoin mining process is full of opportunities and challenges. It is not only a way to obtain Bitcoin, but also a way to participate in the construction of the Bitcoin network. Through mining, people can understand the operating principles of Bitcoin, feel the charm of blockchain technology, and also get certain economic returns from it.

In this digital age, Bitcoin mining has become a new investment method and financial model. It not only changed people's perception of currency and value, but also promoted the development of blockchain technology. In the future, as Bitcoin becomes more popular and its application scope expands, mining will become more common and will attract more people to participate.

In the process of exploring the mystery of Bitcoin mining, we not only understand the way Bitcoin is generated and its operating mechanism, but also think deeply about the future development direction of digital currency. Bitcoin mining is not only a technical activity, but also a way of participation and sharing. Let us look forward to the future of Bitcoin and witness the glorious era of digital currency together!

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

According to market data, on the evening of December 16, Bitcoin broke through 20,000 US dollars. At 17:00 on the afternoon of December 17, Bitcoin rushed to 23,000 US dollars, breaking the historical record. At the same time, the total market value of global digital currencies was about 647.094 billion US dollars. BTC ranked first in the digital currency market, accounting for 66.64% of the market value. This has also made more and more people interested in Bitcoin in the market. In fact, in addition to purchasing through exchanges, Bitcoin can also be obtained through mining. So, what is Bitcoin and how to mine it? The following Coin Circle editor will tell you what Bitcoin is? And how is Bitcoin mined?

 What is Bitcoin?

The concept of Bitcoin was first proposed by Satoshi Nakamoto on November 1, 2008, and was officially born on January 3, 2009. The open source software designed and released according to Satoshi Nakamoto's ideas and the P2P network built on it. Bitcoin is a virtual encrypted digital currency in the form of P2P. Bitcoin does not rely on a specific monetary institution to issue it. It is generated through a large amount of calculations based on a specific algorithm, that is, mining, with a total of 21 million.

Compared with legal tender, Bitcoin does not have a centralized issuer. Instead, it is generated by the calculation of network nodes. Anyone can participate in the creation of Bitcoin, and it can be circulated all over the world. It can be bought and sold on any computer connected to the Internet. No matter where you are, anyone can mine, buy, sell or receive Bitcoin, and outsiders cannot identify the user's identity information during the transaction.

 How is Bitcoin mined?

Anyone can become a Bitcoin miner by running software on specialized hardware. Mining software listens to transaction broadcasts through the P2P network and performs appropriate tasks to process and confirm these transactions. Bitcoin miners can earn transaction fees paid by users to speed up transaction processing and additional Bitcoins issued according to a fixed formula for completing these tasks.

New transactions need to be included in a block with a mathematical proof of work to be confirmed. This proof is difficult to generate because it can only be generated by trying billions of calculations per second. Miners need to run these calculations before their blocks are accepted and rewarded. As more people start mining, the difficulty of finding valid blocks will automatically increase by the network to ensure that the average time to find a block remains at 10 minutes. Therefore, mining is highly competitive, and no individual miner can control what is included in the blockchain.

The proof of work is also designed to rely on previous blocks, which enforces the chronological order of the blockchain. This design makes it extremely difficult to undo previous transactions because the proof of work of all subsequent blocks needs to be recalculated. When two blocks are found at the same time, miners process the first block they receive and once the next block is found, they transfer it to the longest blockchain. This ensures that the mining process maintains a global consistency based on processing power.

Bitcoin miners can neither cheat to increase their rewards nor process fraudulent transactions that damage the Bitcoin network because all Bitcoin nodes will reject blocks containing invalid data that violates the rules of the Bitcoin protocol. Therefore, even if not all Bitcoin miners can be trusted, the Bitcoin network is still secure.

Currently, mining pools dominated by Chinese still have an advantage over miners in the United States and Europe. Chinese miners not only control most of the computing power, but their electricity costs are also generally lower.

On January 15, the difficulty of Bitcoin was raised by about 7%, mainly because of the recent significant increase in Bitcoin computing power. This is the second time that the difficulty of Bitcoin has been raised so far this month. On January 2, the difficulty of Bitcoin mining was raised by 6.6%. Since the second half of 2019, the increasing computing power has also caused the difficulty to continue to increase. Except for the exception on November 18, 2019 (the difficulty of Bitcoin was briefly reduced by about 7.1%), the difficulty of Bitcoin has been growing rapidly for most of the time.

According to the calculation formula of Bitcoin output, the output will be halved almost every 4 years, eventually reaching an extreme value of 21 million. And every time this happens, it will appreciate significantly. This currency without central bank control will continue to appreciate compared with the real currency that is constantly quantitatively relaxed. By 2013, about 11 million Bitcoins had been produced.

At the beginning, Bitcoin could be mined with CPU. Satoshi Nakamoto used his computer CPU to mine the world's first Genesis block. However, the era of CPU mining has long passed. Now Bitcoin mining is the era of ASIC mining and large-scale cluster mining.

Mining speed, professionally called computing power, is the ability of computers to generate hash collisions per second. In other words, the number of hash collisions that our mining machine can do per second is computing power. The macro principle of Bitcoin is just like gold. The total amount of gold on the earth is certain and relatively rare. It can be used as a general equivalent. Before the large-scale issuance of paper money, it has been used as a form of currency. The same is true for Bitcoin. The reason why Bitcoin can be used as a form of currency for buying and selling is also because its total amount is certain, and mining requires a lot of costs, mainly in terms of electricity consumption.

Proof of work, in simple terms, is a certificate used to confirm that you have done a certain amount of work. The entire process of monitoring work is usually extremely inefficient, and certifying the results of the work to prove that the corresponding workload has been completed is a very efficient way.

In fact, when miners choose Bitcoin mining machines, although computing power is the main condition, it is not the only condition. It also needs to be combined with the power of the mining machine itself, the specific electricity price, and the value of Bitcoin itself. These issues will affect the final income.