These days, it seems as though everybody is talking about Bitcoin. Everyone from investors to journalists are talking about its implications for our future. But how many people how Bitcoin works?
One of the most important functions that keep Bitcoin running is Bitcoin mining. But how does Bitcoin mining work?
This article will walk you through everything you need to know.
What Is Blockchain?
To understand the answer to the question — how does Bitcoin work? — you have to understand the concept of blockchain.
A good framework for looking at it is like this: Bitcoin can’t exist without blockchain, but blockchain, can work without Bitcoin. Blockchain is, in essence, the engine that Bitcoin works on.
When Bitcoin was first introduced by Satoshi Nakamoto in 2009, it was advertised as a completely peer-to-peer currency. This means that Bitcoin would run with minimal federal regulations.
But without federal regulations, how can we make sure people aren’t counterfeiting Bitcoin? And with no mints, how can we be sure that people don’t just send the same Bitcoin over and over?
This is where blockchain comes in.
Blockchain is the process by which Bitcoin interactions get verified. Every Bitcoin interaction is assigned a sort of “serial number” hidden behind a complex cryptogram. Each Bitcoin interaction is completely unique and can be verified by its cryptogram.
This verification process is called Bitcoin mining.
How Does Bitcoin Mining Work?
People “solve” this cryptogram, thereby determining an interaction was not fraudulent. These people aren’t a set class of regulators, but anybody who wants to. The incentive for verifying Bitcoin interactions — and thereby bringing a Bitcoin into the world — is payment in Bitcoin.
This is Bitcoin mining.
Bitcoin Mining Culture
To understand the world of Bitcoin mining, you should understand what the world of Bitcoin mining looks like in practice.
While, in theory, you could make the most amount of money if you mined Bitcoin by yourself, that’s not how it works in practice. The computers required to solve these cryptograms have to be extremely powerful, far more powerful than most people can afford.
Most Bitcoin miners are part of mining pools. They all work together to try to solve it together and split the money if one of them solves it.
You should also understand the current state and future of Bitcoin if you want to learn about how Bitcoin works. One of the biggest things you should become familiar with is Bitcoin ATMs — a huge step being made to bring Bitcoin into the “real world”.
Head over to https://www.bytefederal.com/ to learn more about the best Bitcoin ATMs out there.
Understand the World of Bitcoin
Bitcoin is a brave new world that many people are scrambling to understand. However, to understand Bitcoin, you need to break down each individual Bitcoin.
Now you know the answer to the question — how does Bitcoin mining work? and you can use this information to prosper.
For more articles like this, check out our “money and banking”
You might also like:
