Analysis of Bitcoin Cryptocurrency and Its Mining Techniques

Abstract

Bitcoin is a peer-to-peer digital, decentralized cryptocurrency created by an individual under pseudonym Satoshi Nakamoto. In fact, it is the first digital, decentralized currency. Several developers and organizations have explored the importance of digital cryptocurrency and the concept of the blockchain. Bitcoin is assumed to be one of the secure and comfortable payment methods that can be used in the upcoming days. The backbone of Bitcoin mining is the concept of the blockchain, which is assumed to beone of the ingenious invention of this century. The blockchain is the collection of blocks that are linked together in such a way that the hash of the previous block is contained in the present block. Any change of information in any blocks in a blockchain result in an error on the whole blockchain. Bitcoins are generated by a process called mining, where miners solve a complex mathematical puzzle. The miners are competing with each other to mine the Bitcoin as fast as possible and claim the reward. The mining of Bitcoin requires very high computation power. Since miners are solving the complex mathematical puzzle through hardware, they need to be fast in order to be the first solving the block. The miner who successfully solves the block gets rewarded with Bitcoin. Mining can be done by a single person, or it can be done by pool, where a bunch of miners combines in a network to mine a single block. Single mining, also referred to as solo mining is difficult since the difficulty of Bitcoin mining is increasing every day. Pool mining is another option for those who have fewer resources for mining. We propose an efficient way of mining Bitcoin by analyzing several results through self-experiment, online exchange market data, real-time Bitcoin block data, different mining pools' efficiency data and much more. Several factors are needed to be taken into consideration during mining because we may never mine a single Bitcoin even if we invest thousands of dollars on mining Bitcoin.