Chances are you hear the phrase “bitcoin mining” and your mind begins to wander to the Western fantasy of pickaxes, dirt and striking it rich. because it seems , that analogy isn’t too faraway .
Far less glamorous but equally uncertain, bitcoin mining is performed by high-powered computers that solve complex computational math problems (that is, so complex that they can't be solved by hand, and indeed complicated enough to tax even incredibly powerful computers). The luck and work required by a computer to unravel during a ll|one amongst|one in every of"> one among these problems is that the digital equivalent of a miner striking gold within the ground — while digging in a sandbox. At the time of writing, the prospect of a computer solving one among these problems is about 1 in 13 trillion, but more thereon later.
The results of “bitcoin mining” is twofold. First, when computers solve these complex math problems on the Bitcoin network, they produce new bitcoin, not unlike when a mining operation extracts gold from the bottom . And second, by solving computational math problems, bitcoin miners make the Bitcoin payment network trustworthy and secure, by verifying its transaction information.
There’s an honest chance all of that only made such a lot sense. so as to elucidate how bitcoin mining works in greater detail, let’s begin with a process that’s a touch bit closer to home: the regulation of printed currency.
Bitcoin Basics: How Bitcoin Differs From Traditional Currencies
Consumers tend to trust printed currencies, a minimum of within the us . That’s because the U.S. dollar is backed by a financial institution called the Federal Reserve System . additionally to a number of other responsibilities, the Federal Reserve System regulates the assembly of latest money, and therefore the federal prosecutes the utilization of counterfeit currency.
Even digital payments using the U.S. dollar are backed by a central authority. once you make a web purchase using your debit or mastercard , for instance , that transaction is processed by a payment processing company like Mastercard or Visa. additionally to recording your transaction history, those companies verify that transactions aren't fraudulent, which is one reason your debit or mastercard could also be suspended while traveling.
Bitcoin, on the opposite hand, isn't regulated by a central authority. Instead, Bitcoin is backed by many computers across the planet called “nodes.” This network of computers performs an equivalent function because the Federal Reserve System , Visa and Mastercard, but with a couple of key differences. Nodes store information about prior transactions and help to verify their authenticity. Unlike those central authorities, however, Bitcoin nodes are opened up across the planet and record transaction data during a public list which will be accessed by anyone, even you.
Bitcoin mining I havent tried that. Probably because platforms are hard to find.