Do You Know How Crypto Mining Works?
If you want to hold cryptocurrencies like bitcoin, then there are three main ways in which you can get them. Buying them on a cryptocurrency exchange like Coinbase, accepting them as payment for something you sell, or “mining” them electronically using the processing power of a computer.
Yes you can mine them, which means you can create new crypto coins for yourself. There are several cryptocurrencies, including Bitcoin, that use mining to generate new coins and verify transactions, whether new or existing, that are made between buyers and sellers of that cryptocurrency.
Blockchain is a way that keeps records secure and needs a lot of people around the world to verify the records. For this purpose, networks of computers from all around the globe verify and safeguard the blockchains in a decentralised manner. For providing their processing power, these computers are compensated with new crypto coins. And that’s how new coins are created. This process is called mining because it produces new coins and the computer (or their operators) are called miners. As long as the miners keep the blockchain safe and secure, they are rewarded for their efforts with the coins.
In order to confirm and record every fresh Bitcoin transaction, along with maintaining the authenticity of the blockchain, specialised computers with good processing power are used in the mining process. Every computer on the network attempts to compute a 64-bit hexadecimal number called a “hash” before anybody else. The hash is used to update the records on blockchain for all the newly verified transactions. A predetermined amount of freshly created crypto coins are given to the miner who computes the hash first, as a prize. And that’s who crypto mining works.