You’ve probably seen videos and read articles about Bitcoin, Dash, Ethereum, and other types of cryptocurrencies. And in those pieces of content, the topic of Bitcoin mining often comes up. But all of this may leave you wondering, “what is Bitcoin mining?”

Bitcoin is a sovereign system of digital money. It has no direct correlation to any real-world currency, nor is it controlled by any government or centralized entity. It’s made quite a splash with miners, investors and cybercriminals alike. Here’s what to know about Bitcoin mining and how it works.

It refers to the process of gathering Bitcoin as a reward for work that you complete. Why do people mine bitcoin? Well, some are looking for another source of income, gaining greater financial freedom without governments might be another reason for others. But whatever the reason may be, bitcoin is a growing area of interest for investors and cybercriminals too.

So what is Bitcoin mining?
Bitcoin mining is a transactional process that involves the use of computers and cryptographic processes to solve complex functions and record data to a blockchain. The term bitcoin mining means gaining bitcoin by solving cryptographic equations through the use of computers. In fact, there are entire networks of devices that are involved in bitcoin mining and that keep shared records via those blockchains.

This process involves validating data blocks and adding transaction records to a public record (ledger) known as a blockchain. Bitcoin Mining is a record-keeping process executed through immense computing power. Each Bitcoin miner around the world contributes to a decentralized peer-to-peer network to ensure the payment network is trustworthy and secure.

To better understand how crypto mining works, you first need to understand the difference between centralized and decentralized systems.

How bitcoin mining works
Bitcoin miners verify the legitimacy of transactions in order to reap the rewards of their work in the form of bitcoins. In the Bitcoin network, a miner’s goal is to add individual blocks to the blockchain by solving sophisticated mathematical problems. This requires enormous computational and electrical power.

To understand how the process works in a more technical sense, you will first need to understand the technologies and processes behind it. This includes understanding what blockchain is and how it works.

A blockchain is a series of chained data blocks that contain key pieces of data, including cryptographic hashes and traditional cryptocurrencies such as Bitcoin use blockchain. All mining starts with the blockchain. This is an online decentralized ledger that records transactions throughout a network. A group of approved transactions is called a “block.” These blocks are tied together to create a “chain,” hence, the term “blockchain.” These blocks, which are integral to a blockchain, are groups of data transactions that get added to the end of the ledger.

Not only does this add a layer of transparency, but it also serves as an ego inflator when people get to see their transactions being added (chained) to the blockchain. Even though it doesn’t have their names listed on it, it often still evokes a sense of pride and excitement.