What is Bitcoin Mining


The million dollar question, what are these 'Miner's' doing anyway? The popular misconception is that since they are referred to as 'miners', they must be performing these hard to understand tasks solely to 'unearth' a Bitcoin because someone, for some reason you do not understand is telling everyone "bitcoins are valuable'. This is not the case. Miners are needed in a blockchain created system to perform tasks for rewards. The tasks are that each 'miner' receives a copy of the ledger of transactions. As transaction occur in the system supported by the Blockchain (i.e. people buying bitcoins from exchanges, atms, using bitcoins on line or at a store, etc), these miners race to find and the next transactions in the system. At a certain point the number of transactions are enough to record a 'block' of confirmed transaction in the ledger.

Miners race to find, then gather, then fit the next group of transactions where they need to be in the ledger. Since you can trace bitcoins all the way back based on the ledger, there is an order for which the confirmed transactions must be entered. With the previous tying neatly into the next, the miner who first figures out the right grouping and order of available transaction is given a reward. The reward started at 50 Bitcoins and this process take about 10 minutes, then onto the next group. As this ever continual race continues, the blockchain (the ledger) is propagated and the security is cemented even further with each block added. All the while miners are being paid in rewards for being the first to find these complex arrangement of transactions as well as per confirmation recorded at a very micro level.

Bitcoin mining is essentially a network of people or organizations, that use specifically designed number crunching computers, to gather organize and verify all transactions involving Bitcoin in order to propagate the network by serving as the for financial gain. Nicole has Bitcoins in her Wallet. James owns an online shoe store and has a limited supply of the new Manolo Blahnik high heels and he happens to accept Bitcoin.

Nicole chooses Bitcoin because she is also in a race. A race against her 'all i ever want to talk about is me me me co-worker Janet'. Nicole can't risk losing this race to Janet. She would never hear the end of it. But they are expensive and she has direct bills adding every day. Her ledger is MESSED UP! And she doesn't have miners working 24/7 to confirm her overspending ways. But she remembers her brother Tom, sent her a gift 4 for her B Day. 4 Bitcoins. She has just enough to pull this off. Who cares if she just got another IRS lien notice just yesterday. That is for another day. Today she remembers what that smart brother Tom said in the cool card he always seems to find.

Hey Nicole, save this for a rainy day. Like when you get those lien notices. Something like that. If you need to send money fast and securely then Bitcoin is the way to go. Since the technology is decentralized it must be confirmed by 3 independent miners before being able to confirm transfer. Or roughly a few minutes. But once that happens you are in. No waits delays and no chargebacks. So if you are gonna blow this on a pair of shoes because your a hater on Janet, i'd rather you do it this way then create another mess with your credit card company. They are gonna drop you soon! And the IRS will take your paycheck and your house soon too! Have a Happy BDay!'

Gathering

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