The new DEFI platform enters the market! Earn passively - token sale 0.25 $ I'm going in!

How does Bitcoin mining work?

By
Tokeneo
-
4 min reading

The first associations about Bitcoin mining and mining, for people who do not have any experience with cryptocurrencies, probably appear in the form of an army of workers who work hard underground in order to dig the coveted ore ... As it turns out, in fact, the analogy to The terminology of mines works pretty well for "Bitcoin mining"!

mining https://www.freepikcompany.com/legal

Bitcoin mining - how does it work?

Behind the term "mining" are computations performed by computers, which are constructed in such a way that their result is not easy to obtain. In fact, the difficulty of the bills is so high that they cannot be solved "just like that" by even the most powerful computers in the world! In a very simplified way, it can be said that digital coins are simply a reward for solving extremely difficult mathematical operations, for which enormous computing power is necessary. How does it look in practice?

Let's start with the results of Bitcoin mining. The first is the release of completely new digital coins previously unavailable to anyone. The second is related to the maintenance of network security through the ongoing verification of information about the ongoing transactions. When someone sends Bitcoin somewhere, we call it a transaction. Conventional transactions, e.g. banking or in-store transactions, are based on bank documentation or its confirmations, for example in the form of an invoice.

Bitcoin miners, or de facto computers, do the same thing by collecting information about all transactions in "blocks" and then adding it to a public register called blockchain. When a miner adds a new block to a blockchain, one of his tasks is to make sure that entries in it are error-free - in particular, that Bitcoin is not duplicated, for example.

The Bitcoin network that records 300,000 transactions every day means a lot of work. As payment for its execution, miners receive coins each time a new block of transactions is added to the blockchain. The coins that are released with the introduction of a new block into the chain are called the prize. Every 210,000 added blocks, the reward is split in half - in 2009, each block had 50 bitcoins, in 2013 it was 25, and at the moment the reward per block is 6.25 BTC. Halving, the moment when the prize is distributed, will continue until around 2140.

What is it actually about?

Imagine four friends. One of them selects a number between 1-100, writes it down on a piece of paper and puts it in an envelope. Let's say it is the number 42. The rest of the friends are asked to guess a number less than or equal to that number. Friend A points to 55, so the group loses, because 55> 42. Friend B points to 40 and C points to 35. In this case, they both indicated the correct answer

It works by finding a hexadecimal number of 64 characters called a "hash" that is equal to or less than the value determined by the protocol. In other words, this job is just guesswork

Bitcoin mining and rewards

To receive the prize, the miner must meet 2 conditions. The first is to validate the transaction with a total size of 1 megabyte. The second is more specific and involves guessing the correct hash, which is a 64-character hexadecimal number. All the digging and the associated enormous computing power required is just for guessing these numbers. When a computer, after billions of tries, finally finds the value given by the protocol, a block of transactions is added to the network. At this point, all other miners validate the hash and the transactions performed. They then copy the block, add it to their own chain (which is also one of the copies of the "valid" chain) and deal with the next new block.

Currency Exchange rate Buy cryptocurrency

The new DEFI platform enters the market! Earn passively - token sale 0.25 $

Dear customer,

We use cookies to provide our services correctly and safely. Cookies are small text-based data sets that shall be saved on the device you are using in connection with the use of this instnat website. Cookies are created in order to ensure proper functioning of thes instant website. By clicking the button "I accept and go to the website", you implicitly agree to creation of the cookies on your computer and to deploy automatic tracking and data collection and processing on behalf of the Lushup Holdings FZ LEE. Click the above-captioned button is also tantamount to accepting website's privacy policy. Closing the notification by means of "X" is unequivocally connected with your consent. If you do not agree to any of the above, please discontinue using our Website.

“Cookies” shall make an identification of the software used by you and to customization of this instant website to your needs. Cookies contain the name of the domain from which they origin, duration of period of their storage on your computer and an assigned value.

Third party cookies:
We also use third-party cookies for the following purposes:

  • creating statistics - helping to understand the way Users use the Website, which allows to improve its structure and content with use of the analytical tools
  • defining a user profile - in order to display custom-tailored content in advertising networks.

External entities that might be source of any third-party cookies on this instant Website are as follows:

Using a settings of your web browser or by using pre-set configuration tools available in our service you can independently and at any time change the settings concerning your use of the “cookies”, specifying the conditionsof their storage and how your device is creating and downloading them. These settings can be changed to block the automatic handling of cookies in the settings of your web browser or inform about their placement on your device each time.

Detailed information about the options related to use of “cookies” is available in the settings of your software (web browser).

Service privacy policy

This instant document lays out the principles of the Privacy Policy on the tokeneo.com/news/pl website (hereinafter referred to as the "Website" or "Service"). The administrator of the Website is Lushup Holdings FZ LEE, Fujairah - Creative Tower, P.O.Box 4422 Fujairah, United Arabs Emirates.

The full document to read the Tokeneo privacy policy is available in this document.

Advanced settings can be changed in your browser.