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How Does Bitcoin Mining Work? Is It Profitable in 2021?

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Bitcoin mining received a lot of attention when Bitcoin first made its appearance, and it remains a topical issue. Naturally, things have changed quite a bit since 2009, when Bitcoin first saw the light of day, and Bitcoin mining is certainly no exception.

As you may know, Bitcoin mining is the process used to generate new Bitcoins and add them into circulation, but that’s not all. Mining is also crucial to maintain and develop the blockchain. Bitcoin mining uses sophisticated computers that solve incredibly complex computational math problems. But how does Bitcoin mining work?

Key Takeaways

  • Bitcoin is the world’s first cryptocurrency; it’s a virtual currency as there are no physical Bitcoins, only balances kept on a decentralized ledger.
  • Bitcoin would not be possible without the introduction of blockchain; the decentralized online ledger records Bitcoin transactions on a network. All of the transactions on the ledger are transparent and cannot be reversed or edited. The approved transactions are grouped into a block and then tied together to create the blockchain.
  • As Bitcoin is a form of currency, its uses are numerous and include payment for online services and products. You can also trade Bitcoin for other cryptos, hold Bitcoin as an investment, or you can bet on your favorite sport at an online casino that accepts Bitcoin as a depositing method.

How to Mine Bitcoin

Miners effectively act as auditors that verify the legitimacy of Bitcoin transactions and receive newly-minted Bitcoin as payment. But it’s not as simple as that; to verify transactions requires an enormous amount of computational power, expensive hardware, and plenty of electricity.

Not all miners succeed in adding a block and earning Bitcoin, as the first miner to complete the mathematical problem will have the right to add the block to the chain and receive compensation.

Before you get started with Bitcoin mining, you’ll need to know how to mine bitcoins:

  1. First off, you’ll need to purchase specialized mining hardware. The best type of hardware is Application-Specific Integrated Circuits (ASICs), although graphics processing units (GPUs) also work for other types of cryptocurrency mining, especially if you get the best mining cards for Ethereum mining. » Read more

” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>Bear in mind that a new ASIC device is expensive and ranges in price from several hundred dollars to tens of thousands of dollars. But that’s not your most significant expense when mining – ASICs consume an incredible amount of electricity that’s sure to see your utility bill skyrocketing and soon overshadow the cost of the device using it.

  • You’ll then need to select Bitcoin mining software to connect to the Bitcoin blockchain and mining pools. You’ll be able to find free software and paid versions online.
  • Lastly, you’ll need a Bitcoin wallet where you can safely store the Bitcoin you mined. You have a choice between hot and cold wallets. The latter offers more safety as your Bitcoin wallet is offline, and you hold the keys on hardware, whereas hot wallets store your Bitcoin in the cloud.
  • Is It Hard to Mine Bitcoin?

    As previously mentioned, mining Bitcoin requires miners to verify Bitcoin transactions. Verifying transactions is done through a process of discovering the solution to a complex hashing puzzle.

    The hashing puzzle (proof-of-work) requires that a miner’s hardware and software rig (mining rig) comes up with a “hash” that’s less than or equal to the target hash. A hash is a 64-digit hexadecimal number with each digit capable of holding a value of 1-10 and a-f. The first miner to complete the puzzle is eligible for Bitcoin.

    To make matters even more complicated, those with the most mining power on the network are more likely to complete the puzzle in less time and receive Bitcoin than those with less mining power. The miner will receive 6.25 Bitcoins for every block mined, but if your mining rig only contains one mining card (GPU), you’ll account for less than 0.001% of the network’s mining power.

    That’s why many miners join mining pools to add their resources to a group, and if that particular group completes a puzzle, they’ll share the Bitcoin earned between all the pool members.

    You’ll need to be familiar with the blockchain before you’re ready to mine, and then you’ll need to spend a considerable amount on a ming rig that’s capable of handling the intensive computations. A reasonable GPU mining setup that you can build yourself consists of:

    • A motherboard, approximate cost $450
    • A CPU (central processing unit), approximate cost $125
    • RAM (random access memory), approximate cost $65
    • An SSD for storage, approximate cost $95
    • A PSU (power supply unit), approximate cost $100
    • A PCI-e Riser, approximate cost $60
    • A GPU (graphics processing unit) ranges in cost from $550 to $1,100.

    This mining rig only features one GPU, and you’ll be looking at an average cost of around $1,695. However, you won’t get far with only one GPU, as most mining rigs use a maximum of 19 GPU’s, driving the price up to around $21,000.

    If you opt to purchase an ASIC instead of a GPU mining rig, you’re still looking at a minimum price of $2,000 up to five figures. Plus, one ASIC won’t suffice if you’re planning to mine on your own.

    Is Bitcoin Mining Dangerous?

    The main risk of mining Bitcoin is that your income won’t be able to cover your expenses. For this very reason, it’s advisable to use a mining calculator to see if you’ll recoup your initial and ongoing costs before you get started. Your electricity costs will also be extremely high as mining rigs use plenty of processing and electrical power.

    You’ll also have to ask yourself the question, “is bitcoin mining legal in my country or jurisdiction?” as several countries prohibit blockchain mining due to financial regulations and restrictions, not forgetting Bitcoin mining’s environmental impact.

    Are Bitcoin Miners Worth It?

    Bitcoin mining is a highly specialized industry, and it’s unlikely that you’ll be able to earn Bitcoin alone; that’s why a mining pool is a viable option. But profit is not guaranteed as a mining rig’s profit share may be accepted or rejected based on several factors.

    Several factors play a role in earning a profit, and many people opt to purchase Bitcoin after discovering the financial implications of mining. If it were that easy to earn 6.25 Bitcoins at the current price of $36,200 per Bitcoin, individual miners would be able to make $226,407 every ten minutes, but they certainly don’t.

    Wrapping it up

    Within this article, we looked at various questions ranging from “how does Bitcoin work?” to “how to mine cryptocurrency?” We highlighted that mining Bitcoin is a resource-intensive operation with high start-up costs and that there aren’t guarantees that your mining rig will be able to compete with pools that boast more mining power. So how do you get bitcoins, and how to make money with cryptocurrency? The simple answer lies in purchasing crypto on an exchange; you can choose to hold or trade your investment from here. But remember that, like Bitcoin mining, investing in crypto is a high-risk affair, and there are no guarantees in this volatile market.

    Coinsmart. Beste Bitcoin-Börse in Europa
    Source: https://www.newsbtc.com/news/company/how-does-bitcoin-mining-work-is-it-profitable-in-2021/

    Blockchain

    El Salvador’s historic bitcoin law will go into effect on Sept. 7.

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    According to the Reuters report, El Salvador’s President Nayib Bukele announced in a national address on Thursday that the recently passed law making bitcoin legal tender will take effect on Sept. 7, noting that its use will be optional. As reported earlier, El Salvador’s Congress already approved Bukele’s proposal to embrace the world’s leading cryptocurrency, making El Salvador the first country in the world to adopt bitcoin as legal tender.

    “The use of bitcoin will be optional.”

    “The use of bitcoin will be optional, and nobody will receive bitcoin if they don’t want it… If someone receives payment in bitcoin, they can choose to receive it in dollars automatically,” said the 38-year old president Bukele. Salaries and pensions will continue to be paid in U.S. dollars, Bukele added, without specifying if that included salaries paid to state workers and private sector employees. Earlier, Athena Bitcoin said it plans to invest over $1 million to install some 1,500 cryptocurrency ATMs in El Salvador, especially where residents receive remittances from abroad. According to Athena Bitcoin’s website, the ATMs can be used to buy bitcoins or sell them for cash.

    El Salvador’s President unveils the official digital wallet ‘Chivo.’

    El Salvador has announced that it will release an official digital wallet for BTC and other currencies, according to a local media report published on June 24. The new digital wallet is called Chivo, and it will form the basis for everyday use of the currency. President Bukele, who led the effort to authorize bitcoin as legal tender, said that the government would give away $30 worth of BTC after users download the app during a conference.

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    Source: https://chaintimes.com/el-salvadors-historic-bitcoin-law-will-go-into-effect-on-sept-7/

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    Blockchain

    Crypto Price Analysis & Overview June 25th: Bitcoin, Ethereum, Ripple, Cardano, and Polkadot

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    This week was a complete rollercoaster in the cryptocurrency market. Unfortunately, things failed to turn out for the better and the majority is trading in the red.

    friday_cryptopost

    Bitcoin

    Bitcoin is down a steep 11.7% this week as it currently trades beneath $34,000. The cryptocurrency started the week by dropping into support at $31,185 (downside 1.618 Fib Extension) on Monday.

    On Tuesday, it took a brief dive beneath $30K for the first time since January 2021. It dropped as low as $28,800 before the buyers regrouped and quickly pushed BTC back higher. In total, BTC did not spend more than 3 hours beneath the $30k level.

    Since rebounding above $30K, BTC created the first three consecutive bullish candles since the mid-May price capitulation. It did reach as high as $35,500 today. However, it was unable to close above resistance at $34,760 (downside 1.414 Fib Extension) and has since dropped.

    Looking ahead, the first support lies at $33,520. This is followed by $32,465, $31,185 (downside 1.618 Fib Extension), and $30,000. Added support lies at $28,800, $27,750 (January 2021 lows), and $36,840 (downside 1.414 Fib Extension).

    On the other side, if the buyers can climb above resistance at $34,760, the first resistance lies at $36,000 (20-day MA). This is followed by $38,000, $39,490 (early-June highs), $40,000 (50-day MA), and $42,000 (January 2021 highs).

    btcusd-jun25
    BTC/USD Daily Chart. Source: TradingView.

    Ethereum

    Ethereum fell by a very steep 201 over the week as it trades at $1888 – support provided by the 200-day MA and a .886 Fib. The cryptocurrency fell beneath $2200 on Monday and crashed into the $1888 support.

    On the Tuesday spike lower, ETH dropped to $1710 but quickly rebounded to close the daily candle above the 200-day MA. Since then, ETH has been unable to reclaim the $2000 level and has returned to the 200-day MA.

    Looking ahead, if the sellers break beneath the 200-day MA, the first support lies at $1710 (mid-March support). This is followed by $1625 (downside 1.272 Fib Extension), $1500, and $1425 (January 2021 highs).

    On the other side, the first resistance lies at $2000. This is followed by $2160 (bearish .382 Fib), $2300 (bearish .5 Fib & 20-day MA), $2500 (100-day MA), and $2600.

    ethusd-jun25
    ETH/USD Daily Chart. Source: TradingView.

    ETH is also in trouble against BTC after dropping from 0.063 BTC on Monday and heading beneath 0.06 BTC on Tuesday. It continued to run lower as it broke below support at 0.0569 BTC today.

    It is currently trading at 0.056 BTC, but the bearish momentum is still likely to drag it lower in the coming days.

    If the sellers push beneath 0.056 BTC, the first support lies at 0.0541 BTC (April 2018 lows & 100-day MA). This is followed by 0.0513 (downside 1.272 Fib Extension), 0.05 BTC, and 0.0473 BTC.

    On the other side, the first strong resistance lies at 0.06 BTC. This is followed by 0.0628 BTC, 0.0648 BTC (20-day MA), and 0.068 BTC (50-day MA).

    ethbtc-jun25
    ETH/BTC Daily Chart. Source: TradingView.

    Ripple

    XRP fell by an even steeper 25% over the week. The cryptocurrency dropped from $0.781 resistance on Monday to reach $0.6.

    It continued on Tuesday to hit the support at $0.55 provided by the 2019 highs and a long-term ascending trend line. It has since attempted to rebound but is struggling to make ground back above $0.7 as it now trades at $0.62.

    Moving forward, the first strong support lies at $0.6. This is followed by $0.55 (2019 highs), $0.5, $0.478 (this week’s low), and $0.4.

    On the other side, the first resistance lies between $0.7 and $0.72 (200-day MA). Above this, resistance is found at $0.781 (bearish .236 Fib), $0.8282 (2020 highs), $0.9, and $1.00.

    xrpusd-jun25
    XRP/USD Daily Chart. Source: TradingView.

    Against bitcoin, XRP set a fresh three-month low this week as it broke beneath the 2200 SAT (100-day MA) support and plummeted beneath the July 2020 lows at 1900 SAT to reach 1760 SAT.

    There, the support provided by the 200-day MA and a downside 1.618 Fib Extension allowed XRP to rebound. However, it is still struggling to sustain itself above 1900 SAT.

    Looking ahead, the first strong resistance lies at 2000 SAT. This is followed by 2122 SAT (bearish .236 Fib), 2200 SAT (100-day & 20-day MA), and 2425 SAT (bearish .382 Fib).

    On the other side, the first support lies at 1800 SAT. This is followed by 1660 SAT (200-day MA), 1550 SAT (November 2020 low), and 1365 SAT (.786 Fib).

    xrpbtc-jun25
    XRP/BTC Daily Chart. Source: TradingView.

    Cardano

    ADA dropped by a smaller 9% this week as it trades above $1.30. It had fallen from resistance at the 100-day MA around $1.42 on Monday and dropped as low as $1.00 on Tuesday.

    There, it found support at the 200-day MA and quickly recovered back above $1.15 to close the daily candle. Since then, ADA pushed higher but was unable to break the 100-day MA yesterday. It is currently testing a descending trend line that dates back to the May peaks.

    Looking ahead, the first resistance lies at $1.42 – provided by the falling trend line, the 20-day MA, and the 100-day MA. This is followed by $1.52 (bearish .382 Fib), $1.60 (50-day MA), and $1.71 (bearish .5 Fib).

    On the other side, the first support lies at $1.120. This is followed by $1.15, $1.10, and $1.00 (200-day MA).

    adausd-jun25
    ADA/USD Daily Chart. Source: TradingView.

    ADA is pretty neutral against BTC this week. It did drop beneath support at 3820 SAT (.382 Fib) on Monday and fell as low as 3440 SAT (.5 Fib) on Tuesday. However, the bulls regrouped and allowed the daily candle to close above 3540 SAT (downside 1.272 Fib Extension).

    From there, it has pushed back above the 3820 SAT support but is struggling to make ground beyond 4000 SAT.

    Looking ahead, the first resistance lies at 4000 SAT (20-day & 50-day MA). This is followed by 4200 SAT, 4400 SAT, 4570 SAT (1.414 Fib Extension), and 4900 SAT (1.618 Fib Extension & June highs).

    On the other side, the first support lies at 3820 SAT (.382 Fib). This is followed by 3540 SAT (downside 1.414 Fib Extension), 3440 SAT (.5 Fib), 3200 SAT (100-day MA), and 3060 SAT (.618 Fib).

    adabtc-jun25
    ADA/BTC Daily Chart. Source: TradingView.

    Polkadot

    DOT is down by 32% this week as it trades around $15. The coin fell from above $20 on Monday to reach $13 on Tuesday. The buyers did manage to defend support around $14, provided by a .786 Fib Retracement.

    Unfortunately, the bulls have been unable to push much past $17 since rebounding, and the market is looking like it will head lower again.

    If the sellers push lower, the first support lies at $14 (.786 Fib). This is followed by $13, $10 (.886 Fib), and $6.90 (Sep 2020 highs).

    On the other side, the first resistance lies at $17. This is followed by $20 (20-day MA), $22.5, and $25 (200-day MA).

    dotusd-jun25
    DOT/USD Daily Chart. Source: TradingView.

    Dot is also struggling against BTC this week as it dropped beneath the 200-day MA around 54,500 SAT and continued lower to meet support at 45,000 SAT on Tuesday.

    Since then, the market has moved sideways, unable to really push higher again.

    Looking ahead, the first support beneath 45,000 SAT lies at 44,000 SAT (May lows). This is followed by 40,600 SAT, 40,000 SAT, and 35,770 SAT (.786 Fib).

    On the other side, the first strong resistance lies at 50,000 SAT. This is followed by 52,700 SAT, 55,000 SAT (200-day & 20-day MA), and 60,000 SAT.

    dotbtc-jun25
    DOT/BTC Daily Chart. Source: TradingView.
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    Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

    Cryptocurrency charts by TradingView.


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    Source: https://cryptopotato.com/crypto-price-analysis-overview-june-25th-bitcoin-ethereum-ripple-cardano-and-polkadot/

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    Blockchain

    MEHH Token Offering Scalable Digital Payment Solution to Merchants

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    [PRESS RELEASE – Please Read Disclaimer]

    Scalable solution, a blockchain company enabling cryptocurrency payments for merchants to receive or send instant payments.

    Cryptocurrency is becoming a next-generation payment choice among merchants and customers. Every day, more and more people are using connected devices to make payments. The adoption of digital currency is not limited to laptops but also reaches across the industry like tablets, phones, IoT devices, and smartwatches.

    The demand for digital tokens is rapidly increasing. Amalgamate of innovative and secure digital payment mode will help merchants to stay ahead in the game.

    Merchants can now take advantage of MEHH Token to expand their horizons and grow their user base around the world. Just with a single integration, now merchants can add MEHH tokens to their existing application or exchange platform.

    Value Proposition for Merchants and Customers

    MEHH Token is built on a decentralized Ethereum Blockchain Technology. Its permissionless network allows merchants to accept digital payments. Our token delivers the following value proposition to owners:

    Merchants:

    • Revise quick payment in MEHH token
    • Reduce the risk of the data breach
    • Foster customer trust
    • No debt and high liquidity
    • Low free and fast transaction speed

    Customers:

    • Easy access to make payments
    • Offers smooth payment experiences
    • Secure transactions
    • Convenient to move, exchange, or withdraw
    • Extremely Low free and fast transaction speed

    Our mission is to support the vision of enabling digital payments for merchants and customers. By allowing each partner to receive and send payment across the network, the MEHH token ensures instant transfer and safe transaction. We designed these capabilities to redefine the way merchants send or receive payments and transform the Fintech industry by developing a platform that makes a positive impact.

    Find out more at www.mehhcoin.com

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    Source: https://cryptopotato.com/mehh-token-offering-scalable-digital-payment-solution-to-merchants/

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