Mining is the method by which Bitcoin and numerous other cryptocurrencies produce new coins and validate new transactions, as well as verify existing transactions. It entails massive, decentralised networks of computers located all over the world that validate and keep the blockchains secure. Computers on the networks are rewarded with fresh coins in exchange for donating their processing power to the overall network. A virtuous loop is created when the miners manage and safeguard the blockchain, the blockchain rewards the coins. The coins offer a reward for the miners to do this work.
In order to access bitcoin and any other crypto currencies, there are three basic methods available. You can purchase them on an exchange such as Coinbase, accept them as payment for a product or service, or “mine” them digitally using some computing power.
Mining begins with specialised computers that do the mathematics necessary to validate and record each new bitcoin transaction, as well as to assure that the blockchain remains safe. The blockchain verification process necessitates the use of a significant amount of processing power, which is provided voluntarily by miners.
A lottery is held by the network. There’s a 64 digit hexa-decimal number called a “hash,” and every machine on the network competes to guess that number before anyone else. The faster a computer can churn out assumptions, the more probable it is that the miner will be successful in his endeavour. This work is used to update the ledger on the blockchain with all of the newly validated transactions and create a new block containing all the transactions involved in this process. The miner is rewarded with a fixed sum of newly generated bitcoin, as a prize.
