As bitcoin heads mainstream, more and more people find themselves
As bitcoin heads mainstream, more and more people are interested in getting in on this digital currency. You constantly hear it talked about, but few people are answering the pressing questions most consumers have about bitcoin:
What is bitcoin? — how does bitcoin work? — how do I make bitcoin investments? is buying bitcoin a good idea? — what is bitcoin mining? — how does bitcoin mining work? — what is blockchain? — what does blockchain have to do with bitcoin? —
The questions role on and on. This article seeks to answer a few of your questions about bitcoin and teach you how bitcoin mining works.
What is Bitcoin?
Bitcoin is a digital currency created in 2009 by an anonymous entity going by the name Satoshi Nakamoto. Bitcoin’s price fluctuates based on how many people are currently buying and selling bitcoin. It started with a price of around 8 cents; now, it’s worth over thirty thousand dollars.
How Does Bitcoin Work?
Bitcoin isn’t federally regulated — that means the government has no part in protecting bitcoin. Because of this, you can’t get bitcoin at a bank; you have to head to an exchange, a P2P platform, or a bitcoin ATM. To learn more about bitcoin ATMs near you, head over to this location.
Bitcoin deals with the problem of double-spending — a problem unique to cryptocurrency. Paper and metal currencies have to worry about counterfeiting, but once a bill is spent, it’s changed hands, and it doesn’t have to be worried about. Not so with bitcoin; it’s possible, illegally, to spend a bitcoin twice.
To solve this issue, bitcoin uses the blockchain in a unique application, known as bitcoin mining.
How Does Bitcoin Mining Work?
Bitcoin mining is the process of peer-revision that bitcoin exchanges go through on the blockchain. Every transaction undergone using bitcoin has to be revied to make sure there’s nothing fraudulent going on. Bitcoin miners work to solve a complete cryptograph that guarantees the safety of the transaction.
It’s referred to as “bitcoin mining” because those who successfully solve the problem get paid in bitcoin. In that way, you can look at it as these people working on getting bitcoin “created.” No physical coin is put into being, but the coin’s authenticity is guaranteed, thus taking it from concept to currency.
How Much Do Bitcoin Miners Get Paid?
Currently, bitcoin miners receive one bitcoin as part of their payment. One bitcoin is equal to around 30,000 dollars, so that’s not too shabby. However, most mining is done by mining pools, which do the work together and split the profit.
The person who solves the problem first is the only one who gets paid a bitcoin, so most of the money given out due to bitcoin mining goes to mining pools.
Understand Bitcoin and Mining
Now you have the answer to the question, “how does bitcoin mining work.” It’s really not mining at all, just an industry term for using the blockchain to ensure security.
For more articles like this, check out our technology section.