Mining

Bitcoin mining is the process of validating transactions on the network and creating new blocks on the public ledger, or blockchain. Mining is also a way of ‘minting’ new currency and increasing the overall supply. Bitcoin miners are an essential part of the entire network and without them there would be no new transactions or entries added to the distributed ledger. Bitcoin consensus is achieved by a Proof-of-Work (PoW) mechanism, whereby the miner(s) apply a complex mathematical formula to the information in the block, then convert it into a shorter, sequence of letters and numbers called a hash which also contains the hash of the previous block. The hashes act as cryptographic seals and the miners are rewarded with some BTC for their ‘work’, which is all done on specialized computers. Years ago it was possible to mine bitcoins on a reasonable specification gaming PC but today it is all carried out in mega factories by mining pools. Low cost electricity is favorable to run these banks of machines which are all working to crunch numbers in a race to complete the next block. At Bitcoinist we cover all of the latest news and updates from the world of bitcoin mining.