How a miner can play major role in Bitcoin?

Not only Bitcoin, miner role is important in every cryptocurrencies. Mining is a process of verifying a block of transactions or creating new blocks of cryptocurrency. Miners validate new transactions and record them on the distributed global ledger. 

Miners provide processing power to the bitcoin network in exchange for the opportunity to be rewarded bitcoin. The process of new coin generation is called mining.

Proof of Work (PoW) is the original consensus algorithm in a blockchain network which used to confirm the transactions and adds new block to the existing chain. A new block, containing transactions that occurred since the last block, is “mined” every 10 minutes in Bitcoin. It takes average of 12 seconds to mine Ethereum, whereas it takes about 10 minutes to mine a block of Bitcoin transactions.

Block Rewards to Miners

Miners will get benefited by earning cryptocurrency for their mining. Bitcoin miners receive bitcoin as reward for completing the transaction. The block reward is how much bitcoin is rewarded for each block that is solved and added to the blockchain. Rewards are halving to miners for every four years. Bitcoin mining involves powerful computers attempting to solve the complex mathematical problems of the Bitcoin algorithm. The miner who successfully solves a mathematical problem is awarded Bitcoin.

In 2012, miner rewarded with 25 Bitcoins (BTC) for very block he/she solves. In 2016, they will receive 12.50 BTC where as in 2020 they will get 6.25 BTC.

How much it costs to mine cryptocurrency?

Digital mining is kind of like real life mining except that instead of shovels and dynamite, it’s accomplished with software and computers. A miner is essentially running a programme to solve complex math problem so that transaction easily completed. Every miner used the same algorithm in mining, it just depends on the hardware that miner has and cost of electricity which is big factor in the mining. Electricity costs differ from country to country. There is lot of differences even in United States. Power costs are high in Alaska, Hawaii, California and Connecticut where mining doesn’t make sense. Washington is the state where power costs are cheaper that made mining costs low expenditure for the company.

Egypt and Kuwait are the countries where least expensive to mine for a bitcoin. It costs $26K to mine one bitcoin in South Korea whereas just $530 in Venezuela. Bitcoin’s electricity consumption above Argentina (121 TWh), the Netherlands (108.8 TWh) and the United Arab Emirates (113.20 TWh) and it is gradually creeping up on Norway (122.20 TWh).