If you are new to the world of crypto, then you must have heard the name of “Bitcoin Mining”.
Contents
But what is this mining? Why is it done? And how does it happen?
In this post, we will understand it in very simple language.
🔹 What is Bitcoin Mining?
Bitcoin Mining means the process of creating new Bitcoins and also keeping the blockchain network secure.
In this, computers solve difficult mathematical problems, so that Bitcoin transactions can be considered valid.
🔹 Why is Mining necessary?
- There is no bank or government in the Bitcoin system that controls the transactions.
- Therefore, computers work together and check every transaction.
- The computer that gives the correct answer first gets new bitcoins as a reward.
🔹 How does mining work?
- People send Bitcoin
- All transactions are collected to form a block
- Miners (searchers) solve a difficult mathematical problem to add that block to the blockchain
- The miner who solves it first gets added to the block chain and gets a Bitcoin reward
🔹 What is needed for mining?
- Powerful computer or mining rig
- Fast internet connection
- Willingness to tolerate power consumption (because mining consumes a lot of electricity)
🔹 Advantages and Disadvantages of Mining
Advantages:
- Way to get new Bitcoins
- Blockchain network remains secure
- Miner gets reward, which can also be a profit
Disadvantages:
- Very expensive and electricity consuming process
- Not everyone can do mining, now there are large mining farms
- Also has a negative impact on the environment
🔚 Conclusion
Bitcoin Mining is not just a way to earn money, but it is the backbone of the Bitcoin network.
It ensures that every transaction is correct and the network remains secure.
If you want to do mining, then you have to take care of good computer, time and electricity costs.
👉 What to read next?
- [What is Bitcoin? Easy Guide]
- [How to create a crypto wallet?]
- [Ethereum Mining vs Bitcoin Mining – What is the difference?]
