A Bitcoin mining farm is a computer data center that is focused on mining Bitcoins.Take the traditional way of obtaining goods. This usually involves exchanging paper money with the seller in return for the desired item or service. Bitcoins are relatively new to most people. They have no central control through any government institution like common currency does.
Their exchange rates are not controlled, nor are other factors like, for example, inflation.To earn bitcoins one must obtain specially developed software that most miners use. Then, a certain mathematical problem will be assigned that needs a solution. Once a math question has been solved a fixed amount of Bitcoins are awarded to the user who has solved the question.
This process ensures that an incentive is being used to drive the user’s interest to further mine.Security in any financial transaction is always placed at the top of the priority list and Bitcoin security is no exception. Every transaction needs the approval of the bitcoin miner who has initiated the process. Mining is essential in order to keep the Bitcoin network up and running and to ensure its security. Moreover, it helps with keeping the whole network fair as well.
To understand more in depth about bitcoin mining, one must first understand the 2 essential principles of it. In order to confirm a transaction, the bitcoin user must assign enough effort to the block running the whole process. This process itself will create new bitcoins.In other words, you first need to assign several transactions to a particular block.
Secondly, you, as a bitcoin user, must verify the transaction. Thirdly, you pick a particular block and insert it into another block as a hash. A hash is basically an encryption as it shortens the original data from the transaction. A hash is made up of tens and tens of different letters and numbers.
The whole bitcoin mining work would be so much easier if that was all that had to be done.On average, there are about 5-15 new blocks being created every 10-20 minutes. But this can significantly vary between different times of the day. Keep in mind that while in the process of mining bitcoins the system converts all data from the most recently ran block into the above-mentioned hash.
Then, as mentioned above, you must solve the mathematical problem given to you. Once solved, your block will be passed on to the main chain of blocks on the network.You could also summarize the bitcoin mining process as the process of adding new transactions to the main log of all past bitcoin verified processes. The log is sometimes called a block chain as well.
The block chains main function is to confirm all the past and present transactions to the whole network in general.Again, in simpler words, the verification through the block chain prevents used bitcoins being spent again somewhere else. The whole mining process is designed to be difficult so that the bitcoin miners are able to mine only a certain amount of bitcoins each day.
Blocks that are on its own must have what is called proof of work. Only this will guarantee acceptance and allowed it to be deemed as valid. Proof of work is needed to ensure that the process was difficult enough and that it required a certain amount of time to be completed. This validation process must again be approved by other Bitcoin nodes every time a new block is received.
The name of the process, Bitcoin Mining, has come from the resemblance of mining other valuable resources such as Gold or other Metals. New bitcoin currency is created almost at the same pace as real life metal valuables are being extracted from the ground. The Bitcoin mining process is hard because the block’s header must be less than or equal to the specified amount for it to be accepted by the network.To make it easier to understand, here’s another explanation: the process must start with a fixed number of zeros.
The probability of that, however, is low. This calls for far too many tries to be made. To solve this problem, and to create a new hash on every round, a nonce is always added. Now that the bitcoin mining has been explained more or less, let’s talk about bitcoin mining farms.Bitcoin mining farms are the massive structures, in digital terms, that keep the whole thing up and running.
They keep the network secure and safe from external threats such as hacking. Some of these farms, like the one in China, for example, make up to $2 million a month.And this is just for one such farm. China alone has 4 of them. These 4 farms add to a total of 3% of the entire network. The individuals behind the bitcoin mining farm are the ones who without which you would not be able to buy or sell any bitcoins whatsoever.
You might not have known that the bitcoin mining farm workers actually live inside the structure. They only spend 4-5 days a month outside of the bitcoin mining farm.The conditions inside the bitcoin mining farm are less than ideal, as temperatures can easily reach up to 45-50 degrees Celsius. A certain, distant buzz is always present from the many custom made computers that work there.
These computers are specially built for bitcoin mining.One such site in China has 3000 of them. In 2014, Bitcoin mining had finally gained some world recognition. Including from giant firms like Microsoft and Dell.As this happened, bitcoin mining farms got their fair share of attention too.
A year later, in 2015, the first licensed exchange was opened in the United States, a huge step forward for this new online currency.Nowadays, there are countless sites that accept this cryptocurrency. Without a bitcoin mining farm, no one would have been able to confirm the transactions mentioned above. Hence, bitcoin mining would have become useless and unusable.
Bitcoin mining farms are growing with hefty speed around the globe, so is the amount of custom made technology to support it. One such bitcoin mining farm employee has estimated that by 2020, there will be at least 5-10 bitcoin mining farms per country and that the currency will be used by every 10th person.