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Bitcoin mining

Leestijd: 4 min.

Brecht Soenen


Double Spending

One of the biggest problems in creating digital currencies was solving the double spending problem. Many have tried to solve this problem, but only Satoshi Nakamoto has managed to do so successfully with his Bitcoin. So what exactly is this double spending problem? This can easily be explained with an illustration. Imagine that today you send a picture to someone. Basically, you don't send the photo itself, but you send a copy of that photo. When you send a photo, that same photo remains on your phone or computer; the recipient simply receives a copy. In principle, this process takes place in all forms of digital traffic. You can imagine that if this were also the case with Bitcoin, if you were to send a copy of a coin over and over again and could continue to issue it indefinitely, everything in terms of coins would become worthless.


This is where the blockchain comes in with an ingenious solution! Each transaction is recorded in a kind of ledger that is constantly updated, so that it is clear which coin was issued where and which wallet holds which coins. However, if only one copy of this ledger were to exist, the system would naturally fall apart again. This is why Satoshi came up with the Proof Of Work system; the system within the blockchain that ensures the true decentralization of the Bitcoin network. Anyone with a computer who feels called to participate in this system gets access to the ledger, and participates in the validation that creates a block every ten minutes. We call these miners. Once a block is validated, it is added to the blockchain, which in turn is immutable because thousands of miners around the world own the same exact copy of it, thus contributing to the trust encoded in Bitcoin's source code.

Evolution of mining

But why spend time and effort to do this, to mine a block and participate in the ingenious blockchain network? Well, because of a very simple and also crucial fact in the Bitcoin story: when you participate in mining, you are rewarded for the computing power you provide. Of course, you receive that reward in Bitcoin, and the beauty of it is that through your labor, brand new bitcoins are born, fantastic right? The reward miners receive also halves every four years, but we will not go into that in this blog post. You can read more about that on our blog post about the most recent halving. So this process is the brilliant way in which new bitcoins are created. Now you should know that in the year 2022, real bitcoin mining is no longer possible for the average person. In the beginning of the bitcoin march a laptop was enough for mining, but later on graphic cards were used and soon ASIC miners were developed specifically for the mining process. The mining market has exploded: all over the world there are large companies that own warehouses full of ASIC miners, so as a hobby miner you can actually earn almost nothing from mining.


Of course, there are other smaller cryptocurrencies than bitcoin: the trick here is to find a coin that is still mineable with less effort. Everyone who wants to get into the crypto world should take the trouble to mine a coin with the PC he or she has. Not with the aim of making money, but to learn and to get a better understanding of what crypto and the blockchain are all about. You learn by doing, and as technical as mining may sound, if you give it a try you will immediately understand the whole process a lot better! Even though you may not earn anything as a hobby miner, you will still get a certain adrenaline rush associated with the feeling that you are actually part of something bigger, something better, something that will change our lives. That experience in itself is a huge lesson, and it's worth its weight in gold.

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