Mining for the numb

[CryptocurencyKing]

MINING

PREFACE
In course of this thread, I would do my best to keep to the shallows as close as possible and relate it to the traditional mineral mining so it looks as real as it could be, so as to ensure its easily understood by the numbs and those seeking information on crypto mining.

MINING AS A FIELD
Mining in the sense of the word is a process through which precious stones or minerals are being extracted from the soil or earth crust using tools like pickaxe, hammer and chisel etc and then, these precious stones or minerals are refined to its pure state and the value is breath forth (Thats the traditional minig from which the term sterms).
This term is what has been adopted today by contemporary cryptocurrency to describe the process in which, new bitcoin is mined from its block and brought into circulation in the cryptosphere.

          Traditional Mining Site : Contemporary BTCMining Farm

Img Source: Google

CRYPTO (BITCOIN) MINING
For there to be any form of mining, there has to be a mine of which in this case, the mine stands to be the block reserve of unmined bitcoins. Apparently, you need tools to operate a mine. With cryotos (Bitcoin) being an intangible commodity, the style and approach to mining it takes entirely a different formate. Unlike the traditional tools (hammer and chisel) been used in the physical mine operations, contemporary crypto (Bitcoin) mining makes use of highly suffisticated devices such as (GPU and ASIC) which continues to evolve in suffistication up to this day to meet up with the challenge of the encryption on a block.
NOTE: When the founder Satoshi Nakamoto created Bitcoin in 2009, the founder created it to be limited or definite in supply hence, the mine can actually run dry and as such, the founder encrypted it and the difficulty levels to it increases with each successful Bitcoin mine hence the need for a decrypting and devices advanced devices for the job. Some miners bond together in a pool to over come the rising difficulty.
MINIG POOL: It's simply the coming together of miners to share resources and ensure the difficulty in ming is overcomed rather easily and as such, they tend to share the reward that emanates from it.

Therefore, bitcoin mining is a process where by, miners mine new bitcoins using highly suffisticated devices with a high hashrate (processor and guessing power) to generate numbers at random until it decryptes the encryption on the next block and a new bitcoin is being released into circulation and the miner is also entitled a block reward. Mind you, bitcoin mining is done on the bitcoin blockchain. So, it becomes of important note that, there exists different types of blockchains. We have the Bitcoin blockchain, Ethereum blockchain, Binance blockchain and it keeps going for the various alts. Issues on each blockchain system is specific and handled as such.

Block Reward: This simply means, an amount of bitcoin is being awarded the miner to have found the block and is also authorised to arrange and confirm transactions on the blockchain while charging fees on them. This is why the mining field has become a dream to most crypto enthusiast but, it often stays as such #Dream due to the amount of resource needed to start and operate a mining farm. Hence, bitcoin mining is no longer a thing for the common man. Though, you can still try your hands on altcoin minig and hope they get real valued someday.

POSSIBLE RELATIONS OF TRADITIONAL MINING TO COMTEMPORARY CRYPTO (BITCOIN) MINING

Traditional = Contemporary
Mine = Block
Hammer/Chisel = ASIC/GPU

SOURCE: There is no definite source to the study as, the information contained in this thread is from my time of experience in this forum as it occurs to me at the time of composure. Therefore as a beginner, there is a lot you stand to gain by being actively involved in the forum and it isn't limited to knowledge alone. Read and do your best to the assimilation of what you read whole you contribute as well.
Mind you, the content of this thread isn't absolute or optimum on the topic of discussion. Its open to critics, corrections, update and delete of not properly stated context. As such, your opinions is highly welcomed.

[Magicalking]

Op I hope this thread helps your readers understand better
https://bitcointalk.org/index.php?topic=4636521.msg41902263#msg41902263
IMO bitcoin mining isn't that interesting. I do not have interest in that area because of high cost of operation. Bitcoin mining is not as lucrative as people paint it to be.

[JeromeTash]

IMO bitcoin mining isn't that interesting. I do not have interest in that area because of high cost of operation. Bitcoin mining is not as lucrative as people paint it to be.

Sometimes money blinds us a lot. Yes, Of course everyone wants to earn and survive, but your love for something you are going to do matters a lot. Bitcoin mining isn't probably interesting to you because you just don't love the whole thing. A person like @philipma1957 maybe thinking it's a hell of an interesting thing.

You may have other things you love doing. Maybe trading, maybe article writing etc

If Bitcoin Mining wasn't lucrative, I bet we wouldn't be having so many people still mining and mining gear manufacturers running short of mining equipment to sell, would we?

[pooya87]

IMO bitcoin mining isn't that interesting. I do not have interest in that area because of high cost of operation. Bitcoin mining is not as lucrative as people paint it to be.

What people who don't know how bitcoin works forget is that bitcoin is designed in a way that its mining always remains lucrative no matter what. With the supply cap making bitcoin deflationary and the adoption growing that increases its price the profit of mining is also increasing in long term.
In other words mining bitcoin is the only mining that is interesting while mining altcoins is similar to trading them and is full of risks.

[joniboini]

Bitcoin mining is not as lucrative as people paint it to be.

Personally, I never see people say that mining will make you rich overnight, allow you to become a millionaire easily, and stuff like that. Most of the time people already know that mining needs some investment, and it's not that surprising if you're not interested in it if you don't have the capital, time, and risk tolerance to do that and that's fine. That being said, mining needs to be profitable, since you need miners to keep the network running.

[caryoscar]

In other words mining bitcoin is the only mining that is interesting while mining altcoins is similar to trading them and is full of risks---POOYA87

I want to call you a teacher. Thank you. Although there are not many replies to your posts, I have been watching. You are very careful to analyze every sentence of the post every time. This is your habit.

In fact, I personally think that mining is not an interesting thing, because if my number of mining machines is not enough, it is difficult for me to get a good harvest, sometimes the pressure is very high.

You also said that the risks are great. For example, China has closed many mines, which has become one of the factors that contributed to the decline of Bitcoin. As far as I know, many Chinese mines choose to go abroad because the owners of these mines still have large loans to repay. In some mines in Malaysia, the mining machines were destroyed by the government, of course, it is said that it was because of theft of electricity.

As Bitcoin is continuously mined, the source of interest for miners may be more inclined to transaction fees, and there may be some unknown troubles.

[caryoscar]

Bitcoin mining is not as lucrative as people paint it to be.

Personally, I never see people say that mining will make you rich overnight, allow you to become a millionaire easily, and stuff like that. Most of the time people already know that mining needs some investment, and it's not that surprising if you're not interested in it if you don't have the capital, time, and risk tolerance to do that and that's fine. That being said, mining needs to be profitable, since you need miners to keep the network running.

Transaction fees will account for an increasing proportion of miners' income sources, and as the price of BTC gradually rises, transaction fees will also increase. In view of this, it is economically feasible to use transaction fees to incentivize miners to continue to maintain the stability of the Bitcoin network.

Interestingly, Alex Sunnarborg, co-founder of cryptocurrency hedge fund Tetras Capital, previously pointed out that in a non-inflationary environment, only Bitcoin and Ethereum can generate enough transaction fees to make up for the losses of miners.

For Bitcoin miners, their source of income will not change from relying on block rewards to relying on transaction fees overnight. But there is undoubtedly enough time for miners to adapt to the new model to jointly maintain Bitcoin network security. There may be new questions in the future, this requires time to give us the answer, or Satoshi Nakamoto is back, now is only part of his plan.

[ranochigo]

-snip-
which continues to evolve in suffistication up to this day to meet up with the challenge of the encryption on a block.
-snip-
the founder encrypted it and the difficulty levels to it increases with each successful Bitcoin mine hence the need for a decrypting and devices advanced devices for the job. Some miners bond together in a pool to over come the rising difficulty.
MINIG POOL: It's simply the coming together of miners to share resources and ensure the difficulty in ming is overcomed rather easily and as such, they tend to share the reward that emanates from it.

Therefore, bitcoin mining is a process where by, miners mine new bitcoins using highly suffisticated devices with a high hashrate (processor and guessing power) to generate numbers at random until it decryptes the encryption on the next block and a new bitcoin is being released into circulation and the miner is also entitled a block reward.

This is incorrect. There is no encryption involved in mining or in the blockchain. Satoshi didn't encrypt anything and Satoshi also never designed difficulty to be the function of the block rewards/height. The difficulty is purely used to regulate the block intervals with each blocks. Miners merely finds the specific hash of a block header which meets the target. The hash is designed in such a way such that it is difficult to find yet easy to verify by the individual nodes around the network.

The only reason why pools are created is to reduce the varience of payout and rewards are proportional to the perceived contribution to the pool. Each share has a chance to form the hash of the winning blocks and the pools take it as such and rewards each share proportionally.

Block Reward: This simply means, an amount of bitcoin is being awarded the miner to have found the block and is also authorised to arrange and confirm transactions on the blockchain while charging fees on them. This is why the mining field has become a dream to most crypto enthusiast but, it often stays as such #Dream due to the amount of resource needed to start and operate a mining farm. Hence, bitcoin mining is no longer a thing for the common man. Though, you can still try your hands on altcoin minig and hope they get real valued someday.

Block rewards is used to as a subsidy in the earlier days and doubles as a way to ensure gradual supply of Bitcoin, in exchange for the work being done. Miners merely tries to find blocks that are valid and include them into the Blockchain. They cannot arrange transactions in blocks after they have mined a valid block, nor can they re-arrange the sequence of the transaction in previous blocks. Doing so will invalidate the entire block.

Transaction fees will account for an increasing proportion of miners' income sources, and as the price of BTC gradually rises, transaction fees will also increase. In view of this, it is economically feasible to use transaction fees to incentivize miners to continue to maintain the stability of the Bitcoin network.

If the transaction fees remains the same while value of Bitcoin increases, there will be a point where Bitcoin is no longer suitable for P2P transaction as it becomes too expensive.

[CryptocurencyKing]

-snip-
which continues to evolve in suffistication up to this day to meet up with the challenge of the encryption on a block.
-snip-
the founder encrypted it and the difficulty levels to it increases with each successful Bitcoin mine hence the need for a decrypting and devices advanced devices for the job. Some miners bond together in a pool to over come the rising difficulty.
MINIG POOL: It's simply the coming together of miners to share resources and ensure the difficulty in ming is overcomed rather easily and as such, they tend to share the reward that emanates from it.

Therefore, bitcoin mining is a process where by, miners mine new bitcoins using highly suffisticated devices with a high hashrate (processor and guessing power) to generate numbers at random until it decryptes the encryption on the next block and a new bitcoin is being released into circulation and the miner is also entitled a block reward.

This is incorrect. There is no encryption involved in mining or in the blockchain. Satoshi didn't encrypt anything and Satoshi also never designed difficulty to be the function of the block rewards/height.

I suppose your right, just didn't want to state the obvious, keeping to the shallows as possible, remember. So, i suppose we are on the same page on this one but then, it was nice of you to come in. Anyway, even I too is still learning and ice got a question becuase I'm a bit confused at a contradiction here.

The hash is designed in such a way such that it is difficult to find yet easy to verify by the individual nodes around the network.

For there to be a design, they've got to be a designer. Who could it have been other than Satoshi Nakamoto with regards to mining and the bitcoin blockchain. I guess I have to do a lot more research on that but then, I really hope you fill in some more.

[pooya87]

In fact, I personally think that mining is not an interesting thing, because if my number of mining machines is not enough, it is difficult for me to get a good harvest, sometimes the pressure is very high.

That just means you'll have to make a bigger investment compared to the smaller one when mining altcoins. For example you have to buy an ASIC instead of using the PC you already have with its existing GPU to mine bitcoin.

You also said that the risks are great. For example, China has closed many mines, which has become one of the factors that contributed to the decline of Bitcoin. As far as I know, many Chinese mines choose to go abroad because the owners of these mines still have large loans to repay. In some mines in Malaysia, the mining machines were destroyed by the government, of course, it is said that it was because of theft of electricity.

The risk I was talking about was about the coin itself. For example one issue with altcoin mining they usually get dumped so it is possible that before your block reward matures the price has gone down. There is also the concern about 51% attacks since altcoins, specially those copying bitcoin, are very susceptible to this type of attack which would wipe the reward of all blocks you have found.

As Bitcoin is continuously mined, the source of interest for miners may be more inclined to transaction fees, and there may be some unknown troubles.

Only IF the price stays the same or goes down in long term. And that's a big IF.
If you compare the price between the 4 year intervals (the halving interval) you can clearly see that not only price has gone up significantly but also it is a lot more than 2x to cover the 50% reward reduction.