Why would you mine cryptocurrency

We are using cookies to provide statistics that help us give you the best experience of our site. You can find out more by visiting our privacy policy. By continuing to use the site, you are agreeing to our use of cookies. Whenever Bitcoin transactions are processed on the Bitcoin network — that means Bitcoin is moved from one person to another — someone has to make sure all the transactions are recorded properly and that the ledgers on all the systems are synchronized all over the world. In the case of Bitcoin, this process is not done by people or companies, but by thousands of computers all over the world that are all connected to the internet. To do this processing in a very secure way, these computers need to perform very complicated calculations that take a lot of computing power, and in turn, require a lot of energy and expensive and specialised processing equipment.

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Content:

• Bitcoin ban: These are the countries where crypto is restricted or illegal
• How to mine Bitcoin
• What is cryptocurrency mining?
• What Is Crypto Mining? How Cryptocurrency Mining Works
• China's ban forces some bitcoin miners to flee overseas, others sell out
• Can You Still Mine Bitcoin and Other Crypto From Home?

WATCH RELATED VIDEO: Why a crypto price crash is great for miners! (Make more money by mining when the market is down!)

Bitcoin ban: These are the countries where crypto is restricted or illegal

We use cookies and other tracking technologies to improve your browsing experience on our site, show personalized content and targeted ads, analyze site traffic, and understand where our audiences come from. To learn more or opt-out, read our Cookie Policy. Be skeptical. The cryptocurrency bitcoin has become notorious for its ravenous appetite for electricity — and its presumed massive carbon footprint. A June paper in the journal Joule estimated that annual carbon dioxide emissions from the bitcoin network are as high as It also accounts for 0.

But another recent study by CoinShares , a cryptocurrency asset management and analysis firm, found that the majority of the electricity used by bitcoin actually comes from clean sources, like wind, solar, and hydropower. CoinShares says bitcoin network gets Analysts also warn that the same factors that pushed miners to use clean energy could one day lead them to back to dirty fuels.

The CoinShares study also points to a broader problem for how renewable energy is currently deployed around the world: Many renewable power generators are so poorly located and underused that mining bitcoin has become the only viable use for that electricity.

Even though bitcoin solely exists in digital zeroes and ones, the computers that run the network are huge energy hogs. According to the bitcoin energy consumption tracker at Digiconomist , bitcoin currently consumes Since there is no central bank or authority governing the currency, the bitcoin network regulates itself through a distributed accounting system known as blockchain.

In blockchain, every bitcoin transaction is tracked in a public ledger spread across thousands of computers. These transactions are grouped into blocks. The bitcoin network creates an incentive for people to contribute computing power to verify transactions by awarding bitcoins to a miner who verifies a block currently Blocks are added to the blockchain roughly every 10 minutes.

But mining is competitive, with only one miner winning the award per block. Over time, the calculations needed to verify a block get more difficult and the bitcoin award shrinks. The price is also unstable. These factors have created an arms race to develop better computer hardware to more rapidly verify transactions and a push to devote ever-increasing amounts of electricity to the task.

Between 60 and 80 percent of bitcoin mining revenue goes straight back into paying for electricity. So miners really, really want to save as much on their electricity bills as possible. The quest for the cheapest kilowatt has led miners to set up shop in remote regions of China and Mongolia. Bitcoin mines have gone up in rural Washington state. The hunt for cheap power has even led to cases of electricity theft.

Since the network is spread all over the world, bitcoin miners often want to remain anonymous and keep their operations opaque. Another factor is that the computing hardware miners use, known as an application-specific integrated circuit ASIC , has been getting more energy efficient over time.

But mining operations are continually deploying more of them. The power grids miners draw on are also changing over time and can change in their fuel sources between seasons.

That means a local utility could be getting cleaner or dirtier over time, and if more fossil fuels are coming online to meet the demand, that would lead to more greenhouse gas emissions. In so doing, the CoinShares team found that bitcoin miners were using a disproportionate share of renewables. This is why you see miners flock to regions where high-powered renewables are abundant. Regions with high levels of renewable energy and low demand are often areas that saw local industries leave in recent years and subsequently experienced a population exodus.

So bitcoin miners, who care more about electricity costs than location, happily moved into renewable-powered rust belts around the world.

Governments have had mixed reactions to the rise of cryptocurrencies like bitcoin and their rapacious demand for electricity. In Quebec , the government is offering discounted electricity to lure in miners to boost the economy. Meanwhile, China is weighing an outright ban on cryptocurrency mining because it sees miners as scofflaws that are wasting resources and damaging the environment.

Bendiksen said bitcoin mining is making use of energy resources that would otherwise go to waste and that renewable power mitigates its environmental footprint. He noted that its estimate of renewable energy use in bitcoin mining is out of line with other calculations. A report from the University of Cambridge , for example, found that while the majority of bitcoin mining facilities drew on renewables to some extent, the average share was just 28 percent.

In a separate paper published in Joule in April, de Vries explained that even the renewables being used for bitcoin mining have their own consequences. Hydropower in particular has huge regional environmental effects and sometimes has to be backed up by fossil fuels.

Production of hydropower is high in the wet season during the summer months and low in the dry season during the winter months. And since miners are concerned about energy costs above all else, a glut in coal, oil, or natural gas could make burning them much more attractive. Another emerging concern around bitcoin is the electronic waste.

But mining bitcoins remains profitable, so the amount of hardware it uses and the quantity of electricity it inhales will continue to surge dramatically for years.

Another price spike could push energy use even higher. Our mission has never been more vital than it is in this moment: to empower through understanding.

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By choosing I Accept , you consent to our use of cookies and other tracking technologies. Financial gifts from readers help keep Vox free. Please consider making a contribution today. Bitcoin is an energy hog. Where is all that electricity coming from?

Reddit Pocket Flipboard Email. The bitcoin network consumes vast amounts of electricity. Some researchers say most of it comes from wind, solar, and hydroelectric power. Why bitcoin needs so much power Even though bitcoin solely exists in digital zeroes and ones, the computers that run the network are huge energy hogs. A map showing the major bitcoin mining regions around the world. Has bitcoin truly cleaned up its act?

Bitcoin mining hardware is leading to a growing volume of electronic waste. Next Up In Technology. Delivered Fridays. Thanks for signing up! Check your inbox for a welcome email. Email required. By signing up, you agree to our Privacy Notice and European users agree to the data transfer policy. For more newsletters, check out our newsletters page.

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How to mine Bitcoin

B itcoin and other cryptocurrencies are, depending on who you speak to, taking over the world. They have erupted onto the scene in the last few years, with seeing them each new levels of exposure. They are everywhere now, and it's hard to get through a day without seeing or hearing some reference to Bitcoin or another cryptocurrency. But a lot of people still have questions about them. It takes around 10 minutes to mine just one Bitcoin, though this is with ideal hardware and software, which isn't always affordable and only a few users can boast the luxury of. More commonly and reasonably, most users can mine a Bitcoin in 30 days. Technically, mining the Bitcoin can be done for free, as the software has no cost associated with it.

What is cryptocurrency mining?

Bitcoin is a famous cryptocurrency that has achieved monumental growth in a span of 12 months. The mining process includes verification of blocks of transactions in the blockchain network, which also generates new BTC on the network. In other words, each miner needs to add blocks of transactions and the first miner who gets the answer right to the puzzle receives compensation in the form of a block reward. In terms of the block reward, its worth has been changed due to an event called Bitcoin halving, which is set by the creator of the blockchain network Satoshi Nakamoto. This event has decreased the block reward of the miners over the years. In the beginning, it was 50 BTC, and today is 6. Also, you will need to invest time into verifying blocks of transactions and solving numeric puzzles.

What Is Crypto Mining? How Cryptocurrency Mining Works

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China's ban forces some bitcoin miners to flee overseas, others sell out

Crypto mining allows you to earn cryptocurrency without having to invest any capital. Have you ever wondered what it takes to mine Bitcoin and other cryptocurrencies, and how you may obtain crypto tokens without having to purchase them on an exchange? Many individuals were drawn to the crypto ecosystem by the fast rise in the values of cryptocurrencies such as Bitcoin, Ether, and Dogecoin in the first half of this year. While most individuals purchase and trade them on exchanges, it is also feasible to 'mine' these tokens using your computer. The promise of getting paid with Bitcoin is a major lure for many miners.

Can You Still Mine Bitcoin and Other Crypto From Home?

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And in those pieces of content, the topic of cryptocurrency mining often comes up. In a nutshell, cryptocurrency mining is a term that refers to the process of gathering cryptocurrency as a reward for work that you complete. This is known as Bitcoin mining when talking about mining Bitcoins specifically. But why do people crypto mine?

He has only tried mining for Ethereum and Bitcoin. Mining for cryptocurrency is considered an energy-intensive process, as it requires machines around the world to contribute their computing power to the overall crypto network, which then creates new coins and validates transactions of existing tokens, according to an analysis by CNBC. America is changing faster than ever! Add Changing America to your Facebook or Twitter feed to stay on top of the news. Some Tesla owners who purchased cars before were grandfathered into a plan where owners have free and unlimited supercharging for the life of their vehicle.

February 26, That's why cryptomining can daunt newcomers—rumors about hardware degradation have made them fearful of killing their darlings. Lucky for them, mining doesn't degrade your GPU any more than a lifetime of l33t gaming. If you're totally new to blockchain, get good with our Gamer's Guide to Blockchain and Crypto. If you're not sure you're ready for the rigors of mining, we think the best way to get started is by using Salad , our free app that turns idle PC resources into rewards value for games, gift cards, subscriptions and more. It's the one-click way to profit from your PC. Since the crypto gold rush , miners and gamers have butted heads over their predilection for the most performant GPUs.

With the establishment of cryptocurrency, the era of a new means of payment has been ushered Crypto Mining in. We started with Bitcoin, which was first described in by the Japanese Satoshi Nakamoto in the Bitcoin white paper. His idea: The establishment of a digital currency.