I understand that it’s computers but who owns these computers and can you mine for bitcoins in any location or are certain locations better than others.
In: Technology
Anyone can own a computer that mines bitcoins. You just need to run the appropriate software, which you can download from the internet.
Since it’s just a computer program, you can do it anywhere. Large bitcoin mining operations tend to use a lot of electricity so, all other things being equal, it’s a good idea to do it somewhere with cheap power. But it will work (and has the same odds of success) anywhere.
A vast oversimplification is it’s doing math on a computer.
It can be your computer or a network of a bunch them.
Any location where a computer can connect to the internet works. It’s energy intensive to have a bunch of computers so generally somewhere with cheap electricity works best but it’s possible to do anywhere.
It takes a lot of computing power.
In the early days of bitcoin, they were easier to to mine, and a lot of early adopters put together computers at home that could do it relatively cheaply.
The more of them that are found the more crunching a computer has to do to calculate another, so now it is done by huge warehouses full of computers.
Anyone can mine for them, they just have to buy a shit ton of hardware to have a reasonable chance of finding one.
As to where it is best to mine, that mainly has to do with where they can get a LOT of cheap electricity.
Those warehouses full of computers draw a LOT of power and generate a lot of heat. The cost of electricity really adds up.
There’s a computer program that does it. When the computer runs the program, it makes pieces of bitcoin depending on how far through the program it gets.
ANY computer can do it, including the one you used to post on.
However, it’s a hard program to run, and so a more powerful computer has an easier time running the program at a faster speed. More speed=further through the program faster=more bitcoin pieces.
Because powerful computers use a lot of electricity, it makes sense to run the powerful computer in a place where electricity is cheap.
Mining for bitcoins is no different than rolling dice.
Imagine you play a board game “roll more than 3 and you go to next level!”. Normally you roll a die till you roll 4, 5 or 6 number. Then the next “level” gets harder, and you have to roll exactly 6. To compensate for the difficulty spike you invest in better mining equipment, which lets roll two dice instead of one every turn. And the cycle continues.
Mining is the same, except “rolling the dice” is generating a random hash function result. But in essential concepts those two are the same – the first person to “roll” a good number – out of all those who roll – wins.
There’s this super complicated math problem that has a lot of possible answers that make the equation work. But the thing about this equation is that it’s so complicated that you can’t really solve for it. You just gotta try random numbers and see if it works.
That’s what these “miners” are doing. They’re solving this equation and whoever finds a new working answer is the one who gets the coin
The location doesn’t matter, but the amount of computing power does determine if you have a realistic chance of mining anything at all.
A new coin (or rather a block which can contain multiple coins) is mined about once every 10 minutes. Bitcoin has a difficulty curve that keeps this time pretty consistent. Each of these ~10 minute periods is essentially a race to see who can guess a number that will give a valid result when entered into a complex one-way mathmatical formula. The winner gets the coins and then everyone has to start over again with new numbers.
Think of it like a lottery where the organizers secretly select 9 digits of a 10 digit number. Everyone can buy tickets one at a time (with the speed of their computer determining how fast they can buy them) and as soon as someone buys a ticket that matches those 9 digits they win and the game is restarted with a new number. To increase the difficulty the number of digits is periodically increased, which reduces the chance of a single ticket being the winner.
Over the years the difficulty of mining bitcoin has greatly increased. Using your personal computer to mine bitcoin is like trying to win by buying one ticket per minute while your competitors are buying a billion or more tickets per minute. And as soon as one of them wins you have to start over again. Without a large cluster of computers your chance of mining even a single bitcoin is actually less than your odds of winning the real lottery. This is why many miners are part of mining groups – they pool their odds and split the winnings.
In slightly more technical detail bitcoin mining involves calculating a SHA256 hash of a new block which will contain your own details, the previous blockchain state, some transactions, and finally an arbitrary number called a nonce. To “win” the resulting hash must have a certain number of leading zeros. Most hashes won’t have enough leading zeros, so you have to try with a different arbitrary number until either you win, or someone else wins and that changes the blockchain state forcing you to restart from scratch.
You can use your own laptop to mine but it uses so much electricity that it’s not worth it.
Better off to just get $1 of bitcoin per day clicking the daily bonus button on [stakeUS](http://stake.us/?c=E5LjWQvV) everyday.
The actual ELI5 version is that your computer does a bunch of complex math used to verify transactions other people have done through the Blockchain. There is a correct answer and your computer is trying to do the math to find that answer. Whoever does the math first gets a % of a coin. So the faster your computer can do math the more likely your odds are.
It’s easier than you think. Any computer can mine Bitcoin. It’s just a program that guesses a number and then runs a calculation to see if it guessed the correct number. The first computer to guess the right number gets some Bitcoin.
The faster your computer can “guess then solve” the more likely you are to get some Bitcoin.
I have an old laptop doing exactly this. It’s doing the guess and solve 1000s of times a second. It is extremely unlikely that I’ll ever get a Bitcoin because there are machines out there that guess and solve millions of time a second. And will beat me all the time.
However. It’s still a possibility that my machine could win, because it’s like rolling a million sided dice. The first person to get the right number wins. I only have 10 dice and I’m playing against people who have 1000s or even millions of dice. My chances are very slim.
Now here is the worst part. To keep my laptop running 24/7 it costs me about $5.00 a month in electricity. That’s money down the drain unless some day I actually win a Bitcoin.
The big mining farms pay $1000s a day, and only win 2 or 3 bitcoins a week. If Bitcoins go too far down in price they won’t cover the cost of the power the big farms consume. Not to mention the computers that burn out and need to be replaced.
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