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How does Bitcoin mining work?
20 January 2022     830

How does Bitcoin mining work?

What is Bitcoin Mining?

Bitcoin mining is the process of creating a new bitcoin by solving puzzles. It consists of computer systems that specialize in solving mathematical puzzles. The first Bitcoin miner to solve this puzzle is rewarded with matching coins. Mining also confirms transactions in the cryptocurrency network and makes them more credible.
Initially mining was done mainly through the CPU on conventional desktop computers; However, due to disabilities, this process was very protracted. Because of this, mining is now done through large mining supplies that are distributed to various locations. It should also be noted that this process is terribly unethical due to significant pollution of the environment. That is why Bitcoin miners are trying to move from places where fossil fuels are done to places where green energy is consumed. Because of the climate catastrophe that humans have caused and if nothing changes (99% of science agrees on this) it becomes necessary to find new remedies.

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According to Jake Frankenfields analysis, as gold we get from different ores through infrastructure and various techniques, bitcoin mining also takes place at the expense of large-scale systems that are very similar to data centers. Bitcoins algorithm generates various puzzles so that these systems can solve them and get new coins.
Solving these mathematical problems has another plus - the cryptocurrency network becomes more reliable with the confirmation of transaction information. They confirm one megabyte of transactions - or one block. Theoretically there can be only one such transaction however more often we are dealing with thousands of similar processes simultaneously. The main motive for confirming Bitcoin exchange is to avoid double spending. There is always a risk of fraud when using printed money. But if, say, you give an cashier to an cashier in a store it will be handed directly to him. In the case of digital currency, the case is different.

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Creating a copy of digital information is largely simple so when dealing with Bitcoin or a similar cryptocurrency there is always the risk that the buyer will make their own copy of bitcoin and ship it elsewhere so that it will leave the original.
Bitcoin transactions are stored in blocks that are added to the information center, the so-called blockchain. Total nodes in the Bitcoin network store various records and confirm exchanges. Bitcoin miners load the entire history of the blockchain and sort out the valid exchanges in the blockchain. If this block is received from other miners then this miner gets his own block.

Bitcoin halved its mining reward for the third time in May 2020 (dropped from 12 to 6). This happens once every 210,000 blocks or about every 4 years.
Taxes / fees are an additional incentive for miners in this process. Miners are rewarded with a certain amount of coins that network users offer them. These bills ensure the continuation of this process in order for the network to operate stably. So the idea that Bitcoin is absolutely tax-free is not true. As well as the notion that it is absolutely protected or that wealthy individuals cannot easily manipulate it. Or at least that cryptocurrency is absolutely separate from the state.


Mining enhances the security of the Bitcoin network and fights fraud by calculating the control amount for transactions. For mining, other users, as mentioned above, reward miners with freshly cut / mined coins.


Hash is the cornerstone of mining. The hash function takes any arbitrary data and converts it to a new element. However, it is important to note (as we mentioned in the previous blog) that changing any data also causes the received element to change.

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Suppose someone assigns X to 10 BTC. The Bitcoin account stores this information approximately as follows: "X -> 10 -> Y." However anyone would want to convert 10 to 20 very easily. The network needs some tool to verify whether this tagged version is legitimate - this is where we need mining.

When X pays Y these 10 BTCs, the miners will hash the transaction into the Bitcoin network and receive a similar code jhr2374yt3t4y834r384rtyh34thh34rgf8743g5t73f8347ff3. However mining has an essential requirement that the received hash must start with a certain combination of 0s (depending on the hash speed of the network). So the miners will change any small detail to the form we presented to you "X -> 10 -> Y 12345. Then they will re-hash it and check if a similar combination is obtained; if not - they will repeat this process until they sort the sequence .

When the correct hash is received then both the transaction and the hash are stored in a public account; If someone tries to change it then the hash will not be inserted as needed and even network users will realize that these blocks are illegitimate (Dansuke).

This is exactly why Bitcoin mining is not as accurate a description of this process as the security of Bitcoin transactions.