Why Bitcoin Needs Mining Machines (Why Bitcoin Needs to Use Mining Machines)

08/17/2023 12:56 • Crypto & Markets • 52 views

Why does Bitcoin need mining machines? Why does Bitcoin need mining machines?

According to the Bitcoin whitepaper, there is a machine called “mining” in the computer network. This device is typically referred to as a server that mines computational power. It needs to process more than 1000 computing tasks and can execute applications or programs that require more work than originally expected. In order to achieve more efficient and low-cost data storage and faster transaction confirmation, the designers of ASIC chips invented dedicated integrated circuits (ASIC) to improve efficiency, security, and reduce costs. However, due to the current high price of Bitcoin, some problems have arisen: such as excessive price volatility; Bitcoin cannot be compared with other cryptocurrencies and it is even impossible to use the same amount of technology. These reasons have caused some problems:

1. If there are not enough security measures to ensure the smooth operation of Bitcoin, how can security be guaranteed? This question is easily answered.

2. Due to hardware configurations, the operation of Bitcoin is very complex, so a large amount of electrical resources must be used to operate a complete system.

3. The design principle of Bitcoin is very simple: only powerful computers have the possibility to successfully mine new blocks. Therefore, it is unreliable for ordinary people to participate in Bitcoin projects, and the incentive mechanism for developers is not enough. The performance of mining machines cannot meet such requirements.

4. Currently, many users still do not understand how to join mining pools and can only mine using some software they are familiar with.

Why Bitcoin Needs to Use Mining Machines

According to reports, why does Bitcoin need to use mining machines? Because the cost of mining is very high.

According to the latest report released by Bitmain in 2018, China has calculated the largest cryptocurrency mining volume in history, with an annual computing power of more than 10 trillion yuan, which is equivalent to the second largest cryptocurrency economy in the world created by the United States. Currently, more than 20 countries or regions worldwide have started using Bitcoin as a legal currency for trading and payment settlement (i.e. sent to an address through the internet). Therefore, to some extent, the governments of these countries are considering providing legal support for blockchain technology to develop this market.

To solve this problem, older generation chips such as Antminer S9, Whatsminer M30s, and Innosilicon T3 have been included in the whitelist. Therefore, we know that Bitcoin was created on April 16, 2015, with an initial market value of about 60 million US dollars, which later expanded to between 70-80 million yuan. In early 2019, the price of Bitcoin was less than 4000 US dollars, but now it has approached 10000 US dollars. However, the price of Bitcoin has dropped to over 23000 US dollars, and many even call it a “Ponzi scheme”.

However, as time has passed, people have realized that Bitcoin is not the only technology that can achieve value transfer. It can achieve this through:

1. Programmability – Bitcoin can only process a few transactions per second, which means that you include a transaction in a block.

2. Decentralization – Bitcoin generates a lot of information every minute, such as how to obtain data, and so on.

3. Security – Although each node has to verify the input of each user, no loss or destruction will occur during the entire process.

4. “Privacy” – Due to the vulnerability of computer code, personal identities and files on the internet cannot be accessed, which prevents users from directly sharing their passwords with others.

5. Anonymity and Anti-tampering Features – The two characteristics of the blockchain enable all transactions to be tracked, recorded, and secured more safely and efficiently. This trust mechanism will help ensure the security of the network and maintain the long-term commitment to the integrity of the system. (Chain Dede)

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Why Bitcoin Needs Mining Machines (Why Bitcoin Needs to Use Mining Machines)

Why Bitcoin Needs to Use Mining Machines

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