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“Bitcoin mining is the process by which new bitcoins are entered into circulation, it is also a Key component of the maintenance and development of the blockchain ledger“– Paul Ebeling
Mining is performed using sophisticated hardware that solves an extremely complex computational math problem. The 1st computer to find the solution to the problem receives the next block of bitcoins and the process begins anew.
Cryptocurrency mining is costly, and only sporadically rewarding. Nonetheless, mining has a magnetic appeal for many investors who are interested in cryptocurrency because of the fact that miners receive rewards for their work with crypto tokens. This may be because entrepreneurial types see mining as pennies from heaven, like California gold prospectors in Y 1849.
The bitcoin reward that miners receive is an incentive that motivates people to assist in the primary purpose of mining: to legitimize and monitor Bitcoin transactions, ensuring their validity. Because many users all over the world share these responsibilities, Bitcoin is a “decentralized” cryptocurrency that does not rely on any central authority like a central bank or government to oversee its regulation.
Mining rewards are paid to the miner who discovers a solution to a complex hashing puzzle 1st, and the probability that a participant will be the 1 to discover the solution is related to the portion of the network’s total mining power.
Aside from the short-term payoff of newly minted bitcoins, being a coin miner can also give you “voting” power when changes are proposed in the Bitcoin network protocol. This is known as a Bitcoin Improvement Protocol (BIP). In other words, miners have some degree of influence on the decision-making process for matters such as forking. The more hash power you possess, the more votes you have to cast for such initiatives.
To learn more about the mining process click here.
Have a prosperous day, Keep the Faith!
