Explain bitcoin mining in simple language

Explain bitcoin mining in simple language

Bitcoin mining is a process used to obtain this digital currency. Bitcoin production and bitcoin transaction processing are the result of this process. In this article, we will explain how to extract bitcoin and its details in simple language.

Why is bitcoin mining done?

The Bitcoin network is based on the Chinese blockchain and is completely decentralized. Therefore, its publication and control is not done by a specific organization, institution or government. This transaction must be approved in person when making a transaction on the Bitcoin network. It is also necessary to make the necessary changes to the network and update the wallet inventory. That’s what bitcoin miners do. In return, they will be rewarded for their continued motivation.

How is the extraction process done?

Miners work with devices called bitcoin mining devices to verify transactions. They provide network processing power to their device. This processing power is used to solve complex equations whose dissolution causes a transaction to be placed in a block and recorded. The rewards that miners receive are part of the transaction fee and some bitcoin. These bitcoins are obtained after solving the block equation.

Why do they extract bitcoins?

It can be said that most of the work that is done in the world is somehow related to money. Bitcoin mining is certainly no exception. Bitcoin is a digital currency. It can be said that it is even the most popular of them. Miners are motivated to acquire bitcoin and sell it for the common currency they use. Of course, you should know that the mining process costs a lot. In this way, it is true that Miner does not spend money on buying bitcoins, but a lot of money is spent on mining equipment.

What is the reward for mining?

The extraction bonus in the early years was 50 bitcoins per block. But the reward is halved every four years in a process called Hawking. In 2020, Hawking will reduce the bitcoin mining bonus to 6.25 units. Hawking’s goal is to prevent inflation and maintain the value of bitcoin. It is interesting to know that the number of extractable bitcoins is only 21 million. So the extraction of these 21 million coins will no longer produce new bitcoins.

What happens to miners after all bitcoins are mined?

After all the bitcoins have been extracted, the miners’ reward will be paid only through commission. However, the Bitcoin network always needs miners to manage it. So it will reward them.

Related Post