Bitcoin Mining Defined and Explained for Dummies

Bitcoin Mining Explanation

Mining of bitcoin refers to the processing of all transactions that take place in the world of digital currency. In bitcoin mining, the records of new transactions of the bitcoin referred to as blocks are added to previous records known as blockchains. After that, each block is given some amount of bitcoins.

When one creates a record of bitcoin transactions, the bitcoin starts increasing. After block completion, it is encrypted as work proof that is modeled in a process that is compute-intensive. To earn a bitcoin, miners utilize software that can reach their capacity to process some algorithms that are related. After doing so successfully, they are awarded some bitcoins on their blockchain.

It is these blockchains that prevent one from using a bitcoin more than one time. This makes the digital currency immune and safe from counterfeiting through copy and paste.

 How Bitcoin Mining Works

Bitcoin miners are doing two main things to get the bitcoins. They include;

• Maintaining security of the network

• Doing a confirmation of bitcoin transactions

After doing these two essential tasks, payment of the miners is made for their service.

In other words, bitcoin miners are rewarded with a cryptocurrency for their job as editors. The editing part comes about because the miners are verifying the previous transactions involving the bitcoin as cryptocurrency. When they verify these transactions, the miners are protecting the network by preventing people from using the bitcoin more than once.

What happens with bitcoin is that, unlike the universal currency that you use and it immediately leaves your hand, the bitcoins remain in your network even after use. For this reason, there is a possibility of using it more than once. Conversely, if you hand in cash to a cashier, you no longer have it. Therefore, it is out of this verification of previous transactions that some people earn some bitcoins in the cryptocurrency system.

The bitcoin miners check all the transactions to make sure that the users do not spend a single bitcoin severally. To earn some bitcoins as a miner, one must verify 1MB of transactions involving bitcoin. After this, they have a chance to win 12.5 bitcoins till the next bitcoin halving process. The 1MB, as mentioned above, was set by the bitcoin founder, although it is still under controversy. However, the miners feel that the block size should be extended a little bit to accommodate more transactions to earn more bitcoins.

Does Verifying the 1MB of Transactions Guarantee a Win?

Verifying 1MB of transactions does not guarantee one a win. It is not everyone who does that gets the bitcoins. Well, one must also be the first bitcoin miner to provide a numerical answer. The phenomenon is known as proof of work.

Equipment Needed for Bitcoin Mining

To mine bitcoins, you need to have an ASIC miner and after that select a mining pool. Besides, mining software is paramount for you to earn some bitcoins.

In conclusion, bitcoin mining is an opportunity to transact and trade with cryptocurrency. However, make sure you are good at numerics to earn. It’s all about verifying transactions and accumulating bitcoins.