The backbone of a bitcoin network is bitcoin mining. Bitcoin mining is the process of adding a transaction record to Bitcoin’s public ledger of past transactions or blockchain.
Only specialized computer systems can do Bitcoin Mining make sure that network and Bitcoin transaction is secured. This is achieved by solving complex computational which allows the miners to chain together the blocks of transaction.
What Bitcoin Mining actually does?
The aspects of Bitcoin mining are as follows:
- New Bitcoins issue – Unlike the normal currency which is issued by a central body, bitcoins are different. The miners get fresh bitcoins every ten minutes. The issue of these bitcoins are managed by code, therefore, the flow of the bitcoin is always under check.
- Confirming of Transactions – Bitcoin transactions are recorded by the miner on the network which gives a confirmation of the transaction being successful. A bitcoin transaction can be confirmed once embedded in the blockchain.
The Bitcoin Mining Process
The Bitcoin mining process involves a series of steps and a few prerequisites for its functioning.
- The first and foremost requisite is to have a Bitcoin Wallet as all the bitcoins earned during mining get deposited in your Bitcoin wallet.
- The second requisite is to have an ASCI computer specially designed for Bitcoin mining.
- You need to select a Mining pool in order to get a hash rate of the network.
- You need to have installed the software for Bitcoin mining. You can also opt for bitcoin server hosting as it provides good domains and hosts for investing.
- At last, you need to consider the facts such as whether Bitcoin mining is legal in your country and how profitable it is for you.
Bitcoin mining involves a series of processes.
- As person a wants to buy something from person B, person A would send 1 bitcoin to Person B
- As Person A’s wallet announces a transaction 1 Bitcoin to Person B, the information is broadcasted to several nodes. A full node is a special transaction-relaying wallet that keeps a current copy of the entire Blockchain.
- Full nodes then check the transaction done by Person A to check if there are any fraudulent means used. Once confirmed, the full nodes broadcast the transaction over the Bitcoin Network.
- Then the miners come into the picture who hep in completing the transaction by adding it to their blockchain. There is a race between the miners to do so, and whoever completes it the first, gets the reward.
- Once registered and confirmed in the Blockchain, the transaction stands successful and confirmed as Person B’s wallet gets credited with 1 Bitcoin.
Bitcoin Mining is a complex process and involves many technicalities. It is thus a safe network. The miners have to use their computational skills to the most to get the rewards and generate new bitcoins for themselves.