Okay, we’re gonna answer a question you’ve probably asked yourself; what is bitcoin mining?
Chances are you hear the phrase “bitcoin mining” and your mind begins to wander to the Western fantasy of pickaxes, dirt and striking it rich. As it turns out, that analogy isn’t too far off. 😉
That definition is far less glamorous but equally uncertain, bitcoin mining is performed by high-powered computers that solve complex computational math problems.
So why do people mine bitcoin?
The primary draw for many Bitcoin miners is the prospect of being rewarded with valuable bitcoin tokens. That said, you certainly don’t have to be a miner to own cryptocurrency. You can also buy cryptocurrencies using fiat currency; you can trade it on an exchange like ChainEX.
The bitcoin reward that miners receive is an incentive which motivates people to assist in the primary purpose of mining, which is to support, legitimize and monitor the Bitcoin network and its blockchain. Because these responsibilities are spread among many users all over the world, bitcoin is said to be a “decentralized” cryptocurrency, or one that does not rely on a central bank or government to oversee its regulation.
How does bitcoin mining work?
Where do bitcoins come from? With paper money, a government decides when to print and distribute money. Bitcoin doesn’t have a central government — see ChainEX’s article for an in-depth explanation.
With Bitcoin, miners use special software to solve math problems and are issued a certain number of bitcoins in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine.
What is Bitcoin mining actually doing?
Miners are securing the network and confirming Bitcoin transactions. They’re paid rewards for their service every 10 minutes in the form of new bitcoins.
Bitcoin is secure
Bitcoin miners help keep the Bitcoin network secure by approving transactions. Mining is an important and integral part of Bitcoin that ensures fairness while keeping the Bitcoin network stable, safe and secure.
- Bitcoin mining is the backbone of the Bitcoin network.
- Miners provide security and confirm Bitcoin transactions.
- Without Bitcoin miners, the network would be attacked and dysfunctional.
- Bitcoin mining is done by specialized computers.
- The role of miners is to secure the network and to process every Bitcoin transaction.
- Miners achieve this by solving a computational problem which allows them to chain together blocks of transactions (hence Bitcoin’s famous “blockchain”).
- For this service, miners are rewarded with newly-created Bitcoins and transaction fees.
Multiple income streams
So you’ve read about mining, and now want to get involved? Great! But why stop at mining? Bitcoin can be traded through digital asset exchanges.
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ChainEX is a South African digital asset exchange that provides a platform for South Africans to buy, sell or trade a variety of different digital assets using the South African rand as the default fiat-buying currency for some.
ChainEX provides you with a secure, online platform from which you can purchase and trade with different digital assets. Not only do they provide a platform for you to trade, but they also reward you for the people you refer!