Bitcoin Mining . How exactly it works?
Intro to Blockchain mining Most Of us already know what Bitcoin is, but how exactly is it generated? It is done through Bitcoin Mining .It isn't like a western fantasy of gold and ⛏️. Well that isn't too far off either. Basically bitcoin mining is basically a process of solving complex computational math problem ,these problems are so complicated that they cannot be solved by pen and paper , they need very fast computational devices and sometimes can be very taxing on them too.
Bitcoin mining leads to two things:
- On solving the math problem they produce a new Bitcoin
- Solving these complex problems also leads to a Bitcoin payment network which is trustworthy and secure
If someone sends a Bitcoin anywhere it is known as a ' Bitcoin Transaction'. Miners basically clump transactions together in blocks and add them to a record called block chain. Nodes maintain records so that they can be verified in the future. The job of miner's is to make sure while adding new blocks the transaction is accurate (basically here making sure that the Bitcoin is not being dublicated .Since there's a risk that a spender maybe holds onto the currency but just sends a copy during the transaction.
A Block Reward is basically the amount of bitcoin mined in every block. Usually the block reward is halved in every 210,000 blocks which is approx every 4 years. These halvings reduce the the rate of mining of the avalible supply of bitcoin. This way the currency is finite and gains more value . Bitcoin mining can be continued upto the year 2140 ,as the no. of Bitcoins are finite .
Verifying The Transactions
For miners to earn from transactions these 2 things must happen
✔️They must verify one mb(megabyte) of transactions which is usually over thousands of transactions
✔️To actually add a block of transactions to a blockchain they need to come up with a 64 bit hexadecimal no. called "hash" that is less than or equal to the hash.
Evolving Tech Mining rate has been increasing over the years due to the evolving technology .Mining is more like a gamble but the more faster your computer is the more the chance of you getting it right .The rates have been increasing from megahashes per second to gigahashes per second to now terahashes per second. So to the keep up with the evolving tech the complexity of the hash is also increased , currently the probability of getting one hash correct is 1 in 16 trillion. Hope you learnt something new from this post ,lemme know your thoughts on mining in the comments .
