Bitcoin is in the midst of a bull cycle that has prompted a flurry of excitement over the crypto world. On top of that, we already see the signs of mass adoption of Bitcoin and cryptocurrencies around the world. But, this type of success would have never been possible without the miners on the blockchain network. In case you want to obtain BTC through mining, here we explain what the rewards of Bitcoin mining in 2021 are.
How Does Bitcoin Mining Work?
Since there isn’t a central institution to issue new BTC, but the process of Bitcoin mining is the only way through which new Bitcoins are created. Because this is a peer-to-peer based system, the same software is installed on computer systems around the world, so you can definitely do that, but you should know that it takes a lot of energy and computing power in order to mine on the network. In fact, according to the Bitcoin protocol, the difficulty of mining adjusts every two weeks, or after 2,016 blocks, based on the total computing power on the blockchain network.
So, this means that the blockchain network is designed to operate based on the contribution of the miners, and thanks to the competition among them, this is a stable system in which new BTC are generated at a predictable rate. Also, the price of Bitcoin is increasing steadily as the market demand surges.
When it comes to the incentives of the mining as a Bitcoin miner, when a new block of the transaction is verified on the network, you get a block reward. But in order to add a new block of transactions, you and other miners compete to solve a computational hash puzzle. The first one who solves it gets a block reward.
Another incentive for mining on the network is transaction fees. The transaction fees are an important part of the overall reimbursement for working as an auditor on the network, making sure that the transactions are valid, but the main goal of every miner is to obtain BTC and to get a block reward.
The Advantages of Exchange Sites
If you feel that mining isn’t for you, there is actually another popular and much easier option of getting BTC on online trading sites. A great place to start trading is the Bitcoin Mastery UK. The safe trading site is encrypted through the AES protocol, and it operates with regulated partners brokers. Moreover, it utilizes AI technology, which means there’s little input required by the members.
Some of the advantages of trading are that you can easily get started, you don’t have additional costs beyond the initial deposit, and you can do it from your mobile device.
The Fixed Supply of BTC
Another incentive for joining the blockchain network as a miner is that there are only 21 million BTC to be mined, and to this date, approximately 18 million have already been mined. This also makes mining even more competitive as there is another event known as Bitcoin halving, which diminishes the block reward every four years or after 210,000 blocks are added to the blockchain network. Hence, there a lot of mining pools that make mining profitable in the long run and allow miners to compete with others and gain rewards for their efforts.
Incentives to Join Mining Pools
Another strategy for miners to minimize their risks, and improve their chances of obtaining BTC, is through participating in a mining pool. When you work as part of a mining pool, you not only add your own resources and computing power, but you also work as a team to quickly solve computational puzzles and gain the block reward. What’s more, in some mining pools, they also share the transaction fees if they don’t get the reward.
