If you’re reading this article then you must aware with Bitcoin Digital currency. But do you ever think from where this bitcoin come from? Hard currency is controlled by central government bank but bitcoins doesn’t involve with any centralization. It’s globally acceptable crypto Currency. Bitcoin miners approve transactions to safe bitcoin. Mining is an essential and integral element of Bitcoin that justify while keeping the Bitcoin network constant, safe and secure.
Definition of Bitcoin mining can be “Procedure of adding transaction records to Bitcoin’s public ledger of past transactions or blockchain”. This ledger of transactions history is called the block chain as it is a chain of blocks. The block chain verifies transactions to the rest of the network as having taken place.
Bitcoin nodes apply the block chain to decide genuine Bitcoin transactions from attempts to re-spend coins that have already been used elsewhere. All bitcoin transaction details of past, current and future is going to be store in Bitcoin’s global public ledger. Each transaction is stored in a block and all transaction together makes a chain of blocks which are protected by Bitcoin.
Proof of work (POW)
Miners of bitcoin solve difficult math to get new blocks and receive intensive as bitcoin for that. Difficult mining is mandatory to control limited supply of bitcoin and keep it in demand. Individual blocks must include a proof-of-work to be measured valid. This proof-of-work (PoW) is a function checked by other Bitcoin nodes each time they get a block. PoW function of bitcoin is used to protect against double-spending, which also makes global ledger correct.
How Does Mining Create New Bitcoins?
Bitcoin nodes are responsible to verify mining process without any problem to any users. New founded bitcoins are added into to ledger system from mining process. Miners get transaction fees and some bits of new coins, known as block rewards. Mining process attracts more people for mine because whole process runs without any centralization and secure.
We can say that mining serves two purposes.
- Confirms transactions in a trustful manner when enough computational power (effort) is devoted to block.
- Creates new bitcoins in each block.
I will explain in upcoming articles the steps to start bitcoin mining, the hardware and software requirement, getting benefits from it and more. It’s always not beneficial to become a bitcoin mining professional. It require much time and investment to generate revenue from it.