[ENGLISH] What is Bitcoin Mining?steemCreated with Sketch.

in #bitcoin6 years ago

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Mining is the process of adding new transactions to the BlockChain but it is also the mechanism that supports the whole system, it is the mechanism that produce new coins.

The Blockchain is used to confirm / store / make public transactions to the rest of the network and thanks to this Public Ledger of transactions that the [1] MINERS can check if there are Illegitimate Transactions with the attempt to spend Bitcoin already spent / sent.
Who would do such a job without being rewarded? Nobody.

It is for this reason that for each transaction the Miners receive the [2] FEE of the transactions that they can include in the block.

How do the Miners mine a [3] BLOCK?
Block mining is done using special hardware called Asics that compute only one algorithm: SHA256 (in the case of Bitcoin)
Each Asics has its own HashPower which will be decisive in order to calculate more [4] HASH and then be able to solve the block and take the reward.
Every Asics will have a very high expenditure and as we have already said before: nobody works for free especially at a loss.

The solution to this problem is the reward given to each mined block (solved) by the Miners. The reward from today until June 14th 2020 will be 12.5 BTC per mined block.

Why until 2020? Every 4 years there is a phenomenon called "Halving" of the reward of the blocks so if we make an account from the initial production from 2008 we will see that:
2008 - 2012 | 50 Btc per mined block
2012 - 2016 | 25 Btc per mined block
2016 - 2020 | 12.5 Btc per mined block and so on

[1] Miners: those who have the task of validating or invalidating transactions
[2] Fee: transaction costs
[3] Block: can be seen as a container where many transactions are entered together.
[4] Hash: large number of data transformed into a fixed-length number that identifies the data.

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