Bitcoin Mining- All you need to know about Bitcoin And Bitcoin Mining
Bitcoin mining will better be understood if we first understand what bitcoin is , the problem the inventor intended to solve with the invention of bitcoin and the benefits of transacting with Bitcoin.
Bitcoin is one of the cryptocurrencies and the most widely recognized of them all. It was invented by Satoshi Nakamoto in 2009. The reason behind the invention of cryptocurrency(bitcoin) is to create a peer tpo peer transaction platform where by two parties can comfortably transact without the need of a third party.
Bitcoin is decentralized and this has made it immune to government or institutional interference. Cryptocurrency (bitcoin) is a world wide currency and it is in no way geographically limited.
To start dealing on Bitcoin, all you need to do is to first install bitcoin wallet on your mobile phone, once done, your address will be automatically generated . This address can be given to your friends and busioness partners whom you intend to receive bitcoin from . Note that Bitcoin address is used only once. You can generate anytime you want to.
There is also a tech called blockchain. It is a shared ledger where the entire bitcoin ledger relies. All confirmed and verified transactions are included in the blockchain. Bitcoin wallet houses the private key which is used to sign a transaction as an evidence that the transaction is coming from the owner.
When you sign into your bitcoin wallet using your private key, otherwise called seed, and makes a transation, it provides a mathematical proof known as signature , signifying that the transaction is coming from the owner . This signature also prevents anybody from altering with the transaction. Transaction once performed, takes 10 to 20 minutes to be verified. This verification of transaction is what is called mining.
Whenever Bitcoin transaction is made, bitcoin is moved from one person’s account to another and someone has to ensure that these are properly recorded and the ledgers on all the systems are properly synchronized all over the world.
Where the transaction involves Bitcoin, the process is not done by people or companies but by thousands of computers all over the world , all connected to the internet. This computers are called miners.
Computers are used to include bitcoin transactions onto bitcoin exchange and the process is relatively easier with computers.
It should be noted that the primary interest of every bitcoin miner is to be rewarded with a token of bitcoin. As an individual, you do not necessary need a miner before you can trade on bitcoin, you can personally buy a bitcoin with fiat currency and trade on any bitcoin exchange .
The bitcoin reward that miners get is an impetus which inspires individuals to aid the main role of mining: to help, legitimize and screen the Bitcoin system and its blockchain. Since these obligations are spread among numerous clients everywhere throughout the world, bitcoin is said to be a “decentralized” cryptographic money, or one that doesn’t depend on a national bank or government to direct its guideline.
Bitcoin mining is done by specialized computers.
The role of miners is to secure the network and to process and verify every Bitcoin transaction.
Miners achieve this by solving a computational problem which allows them to chain, record and verify together blocks of transactions.
It should be noted that there are three fundamental aspects of bitcoin mining and they are; issuance of new bitcoin, confirmation of already performed transaction and ensuring security.
A transaction can only be considered secure and complete upon it being included in a block. This is Because only a when a transaction has been included in a block that is it officially embedded into Bitcoin’s blockchain.
Miners secure the Bitcoin network by making it very difficult to attack, alter or terminate.The network gets more secured when there are more miners mining.
Mining is an important and integral part of Bitcoin that ensures fairness while keeping the Bitcoin network stable, safe and secure.
At this juncture, it is imperative to know what block and nodes mean in bitcoin mining. Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
This ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place.
Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function. As long as miners remain diligent with their duties, Bitcoin transactions will enjoy security and legitimacy. The dentralized nature of bitcoin remains an advantage and an assurance of the continuous existence and progress of Bitcoin and other cryptocurrency. The installation of Bitcoin ATM machines in many places now is also a welcomed development and hopefully , in no long time, Bitcoin ATM will be as common as ordinary ATM MACHINES.