Do you know what is bitcoin & how it works?
Please read the below article before you read about bitcoin mining.
What is Bitcoin Mining?
Bitcoin mining means whenever a bitcoin transaction is done your transaction details are validated and updated in the blockchain. This process of updating and validating a transaction is called Bitcoin mining.
Let us consider an example, you are sending money from your bank account to your friend’s bank account. So who is the middle person between you and your friend? Yes, your bank is responsible for transferring your funds to your friend’s account.
Similarly, when you are sending bitcoins to your friend there should be some middle person to validate your transaction. Therefore here comes the bitcoin miners.
Bitcoin miners will validate your transaction and will update the blockchain. Will explain to you what is blockchain in shortly. Keep reading.
How Bitcoin Mining Works?
In bitcoin network, many people will be sending bitcoins to each other. All these transactions are kept in a ‘block’. So now it’s miners job to validate these transactions and update the blockchain. A blockchain is nothing but a list of blocks.
In blockchain, you can explore all the transactions that had happened. So how do you validate these transactions?
In order to validate these transactions, you will take a block transaction information and apply some mathematical formulas. This will produce a long set of characters and numbers which is called ‘Hash’.
A sample Hash will be like this
By using the block transaction information these hashes are generated. If some information is changed in block transaction the hash value will also be changed.
In order to generate these hashes, you need a mining software & you need good CPU or GPU hardware. And you need continuous electric power.
If you can able to solve the correct hash then you will be rewarded 12.5 bitcoins.
This is how new bitcoins are generated.
Solving this hashes has been so simple before but now they increased the complexity.
You can buy bitcoin mining hardware from Amazon. And you can get the bitcoin software for windows here
This is how bitcoin mining works. Thanks for reading.
If you have any queries please ask in the comment section.