šŖ Bitcoin Mining for Dummies: What is it and how does it work?
Imagine that the Bitcoin system is like a large digital ledger that needs to be constantly updated with new transactions. But before these transactions are recorded, someone needs to confirm that they are valid. That 'someone' is the Bitcoin miners.
š§ What do miners do?
Miners use powerful computers to solve complex mathematical problems. These problems do not have an 'intellectual' purpose; they simply require brute computational force. Whoever solves the problem first:
š§¾ Adds a new block to the blockchain (the ledger).
š° Receives a reward in bitcoins (currently 3.125 BTC, but it reduces every 4 years in the 'halving').
ā” Why is it important?
Mining:
š Secures the Bitcoin network.
ā Verifies all transactions.
āļø Issues new bitcoins in a controlled manner.
š¤ Can I mine from home?
Nowadays, mining from home is no longer profitable with a normal computer. Most mining is done in large farms with specialized equipment called ASICs.
š¢ What if I donāt want to mine?
You donāt need to mine to have bitcoins. You can simply buy them, but understanding how mining works helps you understand why Bitcoin is secure, decentralized, and scarce.
