How Bitcoin mining works

 How Bitcoin mining works

In order to successfully add a block, Bitcoin miners compete to solve extremely complex math problems that require the use of expensive computers and enormous amounts of electricity. The computer hardware required is known as application-specific integrated circuits, or ASICs, and can cost up to $10,000. ASICs consume huge amounts of electricity, which has drawn criticism from environmental groups and limits the profitability of miners.

If a miner is able to successfully add a block to the blockchain, they will receive 6.25 bitcoins as a reward. The reward amount is cut in half roughly every four years, or every 210,000 blocks.  As of November 2021, bitcoin traded at around $66,000, making 6.25 bitcoins worth more than $400,000.

But the price of bitcoin has been highly volatile, which makes it difficult or impossible for miners to know what their payment might be worth whenever they receive it.

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