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Bitcoin Mining In Plain English

In simple terms we can define Bitcoin mining as the process of adding transactions to your ledger. The process aids in confirming that enough computational effort is devoted to a block. The process also creates new Bitcoins in each block.

To mine you should take a look at the transactions in a block and then verify their validity. You should then select the most recent transactions in the header of the most recent block and insert them into the new block as a hash.

Before a new block is added to the local blockchain, you have to solve the proof of work problem. This is a problem that is designed to ensure that the new block to be created is difficult and the data used in making the block satisfies the laid down requirements.

Bitcoin uses the Hashcash proof of work; therefore, for you to solve the problem you need to create a hash.

How to create a hash

If you know how to do it it's very easy to produce a hash from a collection of Bitcoin blocks. The unfortunate thing is that you can't work out the data by simply looking at the hash-you need to test different blocks.

Hashes are found at the blocks and you have to combine them to prove that your data is legitimate. There are some miners who try to take the easy route by trying to fake a transaction by changing an already stored block.

You should note that each hash is unique and specific to a given block; therefore, when you manipulate a given block, you change the hash. When a given miner runs a hashtag function on the manipulated block, the block is found to be fake, and you won't get any rewards.

Mining reward

When you successfully solve a proof of work, you get a mining reward. The number of Bitcoins in the reward depends on a number of factors such as complexity of the problem. For you to make more money you have to solve many problems. You also need to have high speed computers to enable you to solve as many problems as possible.

Currently, mining pools have sprung up and are found on a very simple concept. Here a group of miners come together and work on a number of blocks. Once the problem is solved, the miners share the rewards.

Conclusion

With the right information and tools Bitcoin mining is not only rewarding, it's also a fun and safe way to transfer money across the internet. To make as much money as possible you need to have the right software and powerful computer hardware.




Source by Idd Aziz

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