Premium for Mining Bitcoins
What is the prize for searching for Bitcoins? This issue became very big and many people who keep up with web money news and innovations wanted to get an answer. The premium can be received for new coins that are separated by the organization for the mine-workers and for every single successful block that was greed.
How to define the award?
The founder of Bitcoins has established the premium for digging at at once with the whole system of digital money appeared in the world. The certain rules cannot be changed because they belong to the organization and can be reconsidered by the whole network only.
At first, the prize for mining was 50 BTC in the first block one which halved every 210,000 blocks. It means that every until 210,000 gets 50 BTC, even so, every block after 210,000 gets only 25 BTC. The statistic says that every single day there are 144 blocks are mined. So, it takes almost 4 hours to collect 210,000 clocks is mine 144 every day.
The creator of the web currency says that coins have to be separated by the nodes that exists in the organization. After they will make up blocks. The numbers will drop every 4 years. So, the first four years their number will come to 10,500,000, after four years 5,250,000 and so on.
Why is the reward important for the business?
The only one to make new coins is to offer a reward for blocks. A premium will motivate mine-workers to apply more power to the whole process without any doubts. A premium for a block is what mine-workers need to achieve when utilizing ASIC’s. This whole process should put the rate of the network on the higher level.
ASIC is very costly plus it takes a lot of expenses on electricity. However, mine-workers are profitable only in that case if the expenses spent on equipment and electricity to find one Bitcoin are lower than the value of one Bitcoin. Mine-workers can dig bitcoins and offer them which will ring them income.
If a mine-worker or a mining pool has a great power, the chance to find a bitcoin is higher. If a miner applies more power, there is more safeness for the network. Therefore, the premium becomes a crucial aspect in improving the network
When the Bitcoin reward is too small…
In some of our latest articles you can find information that says that each user who sends money online choosing the network has to add money for the payment. Right now, the profit that comes from payments is not high because there are not many users at the network. However, after some time, the sum of money for payments will become higher, which will help to catch up the losses.
The income from verified payments will become the only one benefit for nodes after the premium will become too small. The founder of the network suggests that there will be a lot of payments done or there will be no volume.
Will the reward affect the price of Bitcoin?
To answer the question whether the award for mining will cause an effect on the Bitcoin price or now is difficult to answer. Miners, as well as Bitcoin users, know the rough date of every halving. Bitcoin halving happened in 2012 for the first time when the premium for the block fell from 50 BTC to 25 BTC. Soon, the value increased to $260 per BTC. This repeated the next year in April. However, a few months later the price raised to $1,163 per BTC. Whether such unexpected jumps are connected to halving is not confirmed.
How do mine-worker get affected by the block reward?
The block reward cuts mine-workers salary in half. However, as we have already mentioned above, all miners know the rough date when the halving is going to happen. Also, the block premium reduces supply which leads to raising the price for Bitcoin. The price increase can compensate the halving of the block premium.