A Lot of Opportunity Exists in Bitcoin Mining

  • Posted on: 31 October 2017
  • By: Rebeca

Anyone can buy bitcoin but Bitcoin mining is a peer-to-peer process that is used to fool-proof and verify transactions between users. It includes addition of Bitcoin transaction data of past transactions to the Bitcoin’s public ledger. A group of transactions is called block. Bitcoin miners secure these blocks and stack them one above the other to create a chain. A blockchain is the ledger of all past transactions. The nodes use this blockchain to distinguish true Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere. It is a process of creating new Bitcoin in the system.

• Proof-of-work is important – Mining is a resource intensive process so that the number of blocks discovered each day remains steady and hence a controlled amount is realized. A proof-of work (PoW) must be produced by an individual block to be considered valid. When a block is received, other Bitcoin nodes have to verify the proof of work (PoW). The PoW function is helpful in keeping a tab against double spending and therefore the ledger of Bitcoin is made immutable.

• New Bitcoins are created through Mining – When someone asks “How to get Bitcoins?” perhaps the best answer is to say – “through mining”. The whole purpose of mining is to allow the nodes to reach a secure and tamper resistant state and also to introduce new Bitcoins into the system. The miners are rewarded by paying a part of the newly created coins which are called block rewards in addition to a transaction fees. The process helps to serve the dual purpose of introducing new coins into the system in a decentralized manner as well as keeping the individuals motivated to provide security to the Bitcoin system by mining activity.

Therefore, mining is a very lucrative work in Bitcoin and a miner can be expected to be amply rewarded by the system for the job done by him which only helps to strengthen the Bitcoin setup.