Many people in the cryptocurrency industry prefer to buy Bitcoin rather than mine it. While it’s okay to focus on buying Bitcoin rather than mining it, learning the common terms in Bitcoin mining might be necessary for those who have interest in mining.
Common Terminology In Bitcoin Mining
1. Hash Rate
This is likely the most common term you’ll come across when it comes to mining Bitcoin. It simply measures the computational power of the miner. The hash is the mathematical equation that requires solving by the miner. A professional miner will prefer a GPU mining computer to a CPU mining computer as they are faster and more efficient. So, you should consider the GPU mining computer if you want to mine Bitcoin.
2. Blockchain and Block Reward
The blockchain is the miner’s ledger. It is where all pending transactions are recorded. For Bitcoin, a new block is created every few minutes. For every equation solved, the miner is rewarded with some Bitcoins. This is what is referred to as the block reward. Although miners were rewarded 50 Bitcoins per solution initially, it has been reduced to 12.5 per solution.
3. Bitcoin Difficulty
This is simply the difficulty involved in solving each mathematical problem. As new miners join the fold, the hash rate is increased exponentially. Also, the block time reduced thanks to the recent globally interest in Bitcoin mining.
4. Pool Fees
If you want to make a profit from mining, you’ll need to join a Bitcoin pool. The mining pool is made up of a group of miners who come together to mine Bitcoin faster. Mining alone is no longer as profitable as it used to be. So, joining a mining pool is a good idea if you’re starting. Remember that the GPU mining computer is better than the CPU mining computer. The pool fee is the amount you’ll be required to pay to join the mining pool.