Mining

Mining is the process of validating transactions and adding new blocks to the blockchain by solving complex mathematical puzzles.

Simple Explanation

Mining is like being a bookkeeper for Bitcoin. Miners use powerful computers to verify transactions are legitimate and add them to the blockchain. In return, they earn newly created bitcoins as a reward.

How It Works

1. Transactions are broadcast to the network
2. Miners collect them into a new block
3. Miners compete to solve a mathematical puzzle
4. First to solve it adds the block and earns rewards
5. Other miners verify and accept the new block

Requirements

• Specialized hardware (ASICs for Bitcoin)
• Significant electricity consumption
• Mining software
• Connection to the network