What is Bitcoin Mining ? How Does BTC Mining Work ?

Bitcoin Mining is the process through which the Bitcoin transactions will be validated or verified. This could be done by anyone who has processing power for computation (like a computer or dedicated hardware for mining).

Each transaction will have some transaction fee depending upon the transacted amount. Many transactions are put into a block and it is validated by miners. Whoever validates the block first, that miner will get the total fee of all transactions as a reward for mining the block successfully.

Then, that block is added to the Blockchain ledger. This process will continue and blocks will be mined and added to Blockchain.

Mining Rigs

In order to mine a block, a miner has to solve the cryptographic puzzle (finding a hash below the target) and that miner has to be the first one to solve the puzzle. This is known as Proof of Work (PoW).

So, one must possess enormous capacity of computational processing power and must be extremely lucky for successfully mining a BTC Block !

As we know the bitcoins hold a high market value in Cryptocurrency domain, the competition among miners to mine the block is extremely high.

Some facts about mining :

• Dedicated hardware with heavy computation power has been introduced just for the sake of bitcoin mining. These are called as Mining Rigs
• Mining concept is fundamentally based on Cryptography.
• Bitcoin Mining requires extensive computational power and electricity. Majority of the bitcoins are being mined in China.
• As of now,  for every 10 minutes, a new block is being mined and added to the bitcoin ledger blockchain.

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Who is Satoshi Nakamoto ? The Man Behind Bitcoin !

Nobody knows the real identity of Satoshi Nakamoto !

It was the username/alias of the leading member(or members) of online community which developed the first crypto currency – BITCOIN. Satoshi Nakamoto is the founder of Bitcoin. 

Some facts of Satoshi Nakamoto:

• The fundamental constituent of bitcoin in terms of currency value is Satoshi.

For Dollars $ -- cents
 For Bitcoins -- Satoshi

• It is unclear whether satoshi nakamoto is a single person or a group of persons.

• Satoshi Nakamoto is author of the first paper on Bitcoin.

• Satoshi Nakamoto developed the first Blockchain database.

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What is a BlockChain ? Block Chain Technology Explained !

Block + Chain  = A Chain of Blocks 

Blockchain is a continuous chain of blocks which are linked together sequentially. For understanding purpose consider the trains. All the bogies are blocks and the train itself is the blockchain. Just like the bogies of train are connected to one another, all the blocks are linked with a Hash. Biggest use-case of a blockchain is with Cryptocurrency / Bitcoin.

In every block, there will be some fields which hold respective data corresponding to the field. 

Fields in a Block:

1. Index
2. Time Stamp
3. Previous Hash
4. Hash
5. Data

If a new block is to be added to the chain, then it must hold the hash value of the last added block in the chain. Then this new block's hash value is copied to the next new block that will be added to the chain after some time.

A new block is added to the existing chain only if a miner validates that block using a process called Mining. Anyone on the internet can do mining and earn bitcoins (BTC). (Know more about the Mining process in this article)

In Computer Science field, this is familiar and follows the same principle of a Linked List Data Structure. 

A Blockchain is decentralized, which means there won’t be any governing authority which can hold ultimate rights over the data. Everybody on the Internet can look up the data in the Blockchain whenever they want. 

Blockchain acts as a distributed ledger for Bitcoin transactions. 

The concept was first introduced by Satoshi Nakamoto. Know more details about this mysterious man in next post.

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You might also be interested in Other Technologies Bechind Bitcoin / Cryptocurrency 

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What is CryptoCurrency ? Everything you need to know about Crypto, Blockchain and Trading.

 What is Cryptocurrency?

Cryptocurrency is a virtual form of money which cannot exist physically. All the transactions can happen only on the internet. Users will have a wallet in which the crypto coins are stored securely and users can transfer or receive coins through peer to peer mechanism (without any mediator in between). All they transactions are registered on a digital ledger called Blockchain.

Generally, the money related transactions are made through banks acting as mediators between sender and receiver. There is no such system in Cryptocurrency transactions. They follow a Peer to Peer mechanism of protocol. 

Cryptocurrency is Decentralized system, which means all the users have complete rights over their data. 

The most popular and first cryptocurrency that came into existence is Bitcoin (Know more about Bitcoin here)

But what exactly is the use of cryptocurrency?

The most popular reason is that the transactions are anonymous. We can’t know the personal details of sender or receiver of bitcoins. Only things which are visible to everyone on the block chain are: Public keys, transaction amount and transaction ID.

How do the Cryptocurrencies come into existence ?

All the coins (including Bitcoins / btc or other ALT Coins) are created by Mining. (Check this article for more about Mining)

Sounds confusing? Don’t worry it will be explained in later articles. Just keep gaining the knowledge. Jump to next post.

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