What is Bitcoin mining?

So you want to learn a little more about Bitcoin and/or other cryptocurrencies? Well let me tell you that you are in the right place. Before starting to learn about mining Bitcoins, I recommend you read these two articles: What is Blockchain ? And what are cryptocurrencies? . Both articles will help you gain a basic and general knowledge about Blockchain technology and cryptocurrencies.

That said, let's continue with today's article where we explain what bitcoin mining is.

 

1.What is Bitcoin mining or mining Bitcoins?

Mining Bitcoins is the process of "creating" new bitcoins which are awarded to the owners of "mining" computers, also known as "miners", for validating transactions and adding them to the blockchain.

As mentioned in the article What is Blockchain ? In a block network, each computer (node) that participates in the network stores an updated copy of the block chain. These nodes, also known as “miners” are tasked with updating and maintaining data on the blockchain . Miners solve cryptographic/mathematical puzzles set by the blockchain protocol to validate data and update or add new blocks to the blockchain .

To maintain the integrity of the network, miners with the native cryptocurrency, in this case Bitcoin, are incentivized for their work in validating and adding transactions to the blockchain.

Ok, so miners are awarded new Bitcoins for their work in validating and maintaining the integrity of the Bitcoin blockchain. But why is it necessary to do all this?

2.Why does the process of mining Bitcoins exist?

Let's remember that, like most cryptocurrencies, Bitcoin was created as a decentralized alternative to the banking system that we all know. This means that Bitcoin seeks to, and can, operate without any central authority.

Not having a central authority that administers and manages the different financial transactions is a great advantage, but it creates the following problem. How do you create a system that has a decentralized ledger ? How do you give someone the ability to update the ledger without giving them as much or all of the power over it?

This is where the process of mining Bitcoins comes in. As this is a decentralized process, anyone who wants to participate in validating and updating the Bitcoin ledger , or the blockchain, can do so. All they need to do is guess/solve a mathematical equation generated by the system. If they guess correctly, these miners earn Bitcoins and can write the “next page” of Bitcoin transactions to the blockchain.

3.How is the process of mining Bitcoins?

Once the computer being used to "mine" solves the mathematical equation correctly, the mining program will determine which of the pending transactions to be executed on the Blockchain will be grouped into the next block of transactions.

After this, it is time to update the Bitcoin transaction book, or the blockchain. The block is created, together with its solution, and it is sent to the entire network so that other nodes/teams can validate it. Each computer that validates the solution updates its copy of the Bitcoin transaction ledger with the transactions included in the new block.

Conclution

The Bitcoin mining process plays a crucial role in validating and confirming new transactions on the blockchain. This is also the way in which new bitcoins are “created” or rather introduced into the system. Finally, the process of mining Bitcoins helps the Bitcoin network or system to remain decentralized, stable, secure and reliable.

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