What is Bitcoin Mining?


Bitcoin Mining (Bitcoi
n Mining) is not the only one way to get Bitcoin. As mentioned earlier, we can see Bitcoin as a large global cash system that stores transaction history (or 'money movements') from one person to another. When Bitcoin transactions are processed on the Bitcoin network - meaning that Bitcoin is being moved from one person to another - one needs to ensure that all transactions have been recorded correctly and the cash system has been synchronized throughout the world.

In the case of Bitcoin, this process is not carried out by individuals or companies, but by thousands of computers around the world connected to the internet. This computer is known as a miners or 'miners'. Simply put, they are 'computers that process transactions'.

To do this processing in a safe way, computers need to do complex calculations that take up enormous computing effort, so that great energy and sophisticated tools are needed. Someone - the owner of these computers - needs to pay for the tools and electricity, so they have to get compensation for all the effort and money they spend supporting this network. They get compensation through the newly mined Bitcoin. The new bitcoin that is mined acts as an award and incentive for those who contribute to the system that supports the transaction process.

Another way to understand this is to imagine what would happen if large banks were to build the world's largest global transaction processing system: they would spend billions of dollars and then charge small transaction fees to users to cover the cost of building the system.

With Bitcoin mining, the cost for this global system is divided into million of computers, and they cover their monthly expense with the newly mined Bitcoin.

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