Bitcoin mining: what is it and how does it work?

In this way, a common agreement or consensus is reached without the need for a central authority to intervene. So the bitcoin mining It is essential for the maintenance of the network.

Bitcoin mining: what is the purpose?

Bitcoin mining is responsible for ensuring that only those transactions that are legitimate on the Blockchain network are verified. Therefore, we can say that mining is a process that provides stable reconciliation operation in cryptocurrency networks.

Thus, cryptocurrency miners such as Bitcoin are the owners of computers that offer computing resources to the peer-to-peer network. And just like regular miners, a Bitcoin miner is going to need enough equipment and power. The first miner who manages to validate a new block in the Blockchain network will receive a part of the transaction as a prize, which is called a block reward.

How does mining work?

The miners’ computer equipment, also called nodes, are the ones that group the transactions that have occurred in the last ten minutes into blocks. Thus, there is a competition between miners to solve complex cryptographic problems and be the first to validate new blocks.

Once the first miner has managed to find the correct solution, it is transmitted to the rest of the network from one node to another. Subsequently, each node in turn performs the necessary operations to check if it is correct. If so, the new block is already added to the Blockchain network. With this reward system, an interesting incentive is offered to actively maintain and intervene in the processes.

Blockchain technology, in fact, without this type of mining, its operation would not be possible. The more you mine, the more blockchain units are added and at the same time the complexity of these cryptographic puzzles increases. In this way, being more difficult, miners need their computers to have more computing power. Thus, they will continue to be in the lead and will be able to access the rewards for solving the puzzles.

Who can mine bitcoin?

The truth is that anyone can be a bitcoin miner with the necessary capital and if they have time. There is no limitation, not even geographical, since the nodes can be anywhere in the world unless it is prohibited.

There are cases where, depending on the country, a license may be required to operate in this industry. And honestly, we recommend that you have enough practical and theoretical knowledge before launching and investing in it. Also keep in mind that not just any computer is worth it, but an ASIC is necessary and they are expensive equipment, which you should take into account as an initial investment. As always in these cases, be clear about how much you are willing to risk and invest before launching yourself.

If you want to start or you already have experience and need a solid cryptocurrency investment platform, we are here to help you. Since 2017 we have been in continuous evolution providing the right tools and our clients are the best guarantee we have. Contact us and we will advise you on the steps to take in this world.