You have most probably heard of Bitcoin Mining, but what is it?
Bitcoin mining is the process by which new bitcoins are entered into circulation. It is also the way the network confirms new transactions and is a critical component of the blockchain ledger’s maintenance and development. “Mining” is performed using sophisticated hardware that solves anextremely complex computational math problem. The first computer to find the solution to theproblem receives the next block of bitcoins and the process begins again.
The bitcoin reward that miners receive is an incentive that motivates people to assist in the primary purpose of mining: to legitimize and monitor Bitcoin transactions, ensuring their validity. Because many users all over the world share these responsibilities, Bitcoin is a “decentralized” cryptocurrency, or one that does not rely on any central authority like a central bank or government to oversee its regulation.
- By mining, you can earn cryptocurrency without having to put down money for it.
- Bitcoin miners receive bitcoin as a reward for completing “blocks” of verified transactions, which are added to the blockchain.
- Mining rewards are paid to the miner who discovers a solution to a complex hashing puzzle first, and the probability that a participant will be the one to discover the solution is related
to the portion of the network’s total mining power.
- You need either a graphics processing unit (GPU) or an application-specific integrated
circuit (ASIC) in order to set up a mining rig.