Bitcoin mining is how Bitcoin transactions are verified and confirmed by the Bitcoin network. Bitcoin miners create a new block, by solving a proof of work problem which is chained through cryptographic proof to the previous block.
Those who are new to bitcoin technology, might be thinking about, what is bitcoin mining process, or how does the bitcoin mining system really works?
This post tries to explain everything about bitcoin mining and the process involved in bitcoin mining work!
# What is Bitcoin Mining?
Bitcoin mining is the process of spending computing power to process transactions, secure the network, and keep everyone in the system to get synchronized together.
It could be perceived how the Bitcoin’s data center except it to be, the mining system has been designed to be fully decentralized with miners. Operating across the globe from different countries, and there is no individual is having any control over the mining network.
This process is referred to as “bitcoin mining” and an analogy to gold mining, because it’s also a temporary cryptographically generated mechanism that is being used to issue new bitcoins.
Unlike gold mining, however, BTC’s mining provides a reward in exchange for useful services which required to operate a secure payment network across the globe.
Mining would still be required after the last bitcoin is issued by the bitcoin protocol.
# How does Bitcoin Mining Really Work?
Today, anybody can become a Bitcoin miner, just by running a mining software with any specialized mining hardware.
The mining software listens all transactions and broadcasts them through a peer-to-peer network, that performs appropriate tasks to process and confirm those transactions.
Bitcoin miners perform those tasks, because they could earn transaction fees paid by users for faster transactions processing, and newly created bitcoins get issued into existence miners according to a fixed standard formula.
For every new BTC transactions to be confirmed, they need to be included in a block-chain, along-with a mathematical proof of work.
Such proofs are really so hard to generate, because there’s really no such way to generate them other than, just by trying billions of mathematical calculations per second to be solved.
This requires bitcoin miners to perform those calculations early to their blocks, which gets accepted by the BTC network, and before they gets rewarded.
As more users start to mine bitcoins, the difficulty of finding valid blocks automatically gets increased for the network, which ensure the average time to find and solve a block that remains equal to 10 minutes.
As a result, bitcoin mining becomes a more competitive business, where no individual miner could ever control what is going to be included in the block chain network.
There is a proof of work, which is also designed to depend on the previous blocks to force a chronological order in the block-chain system.
That makes it really difficult to reverse previous transactions, because that requires the re-calculation of the proofs of work of all those subsequent blocks.
When two blocks gets found at the same time, then the miners work on the first block they receive, and switch to the longest block chains as soon as the next block gets found.
This allow mining to secure and maintain a global consensus based network on computer’s processing power.
BTC miners are neither able to cheat by increasing their own rewards, nor they can process fraudulent transactions which could corrupt the entire BTC network.
Because, all those network nodes would reject any block that contains invalid data, as per the rules of the Bitcoin’s system protocol.
Consequently, the Bitcoin network remains one of the most secure network, even if not all Bitcoin miners could be trusted.
What do you think, about bitcoin mining, and the way bitcoin mining process works? Do you think this could help in future possibilities? Please let us know via your comments.