Bitcoin has taken the world by storm. Designed to be an instrument for peer-to-peer fund transfer, bitcoin gains its popularity due to its decentralized and open source nature. Unlike other fiat currencies, bitcoin doesn’t need a central authority like a bank or some other government or a private institution to facilitate the transaction of funds from one person to another.
The Bitcoin network has a large number of people sharing processing power and facilitating the digital currency transactions. These people are known as miners and the process Bitcoin Mining. Bitcoin mining is a vital aspect of the Bitcoin protocol, without miners, the network cannot possibly exist.
Bitcoin has been around since 2009, about a year after Satoshi Nakamoto published a paper about the digital currency. In spite of fewer than 8 years of experience, Bitcoin already has a rich history which is worth understanding. In order to get a complete picture of its history, it is important to know about Bitcoin mining and its progression through time. What is Bitcoin Mining?
The official Bitcoin website describes Bitcoin Mining as a process of adding transactions to Bitcoin’s public ledger, which is known as blockchain. Now, blockchain is a distributed ledger and it contains records of all the transactions that has ever taken place over the network. Whenever somebody makes a bitcoin transaction, these miners verify the transaction against the existing records to confirm its validity. By confirming its validity, miners ensure that no bitcoin is double spent (bitcoin once spent can’t be spent again).
In order to prevent anyone from making changes to the records, blockchain is heavily encrypted and the miners use the processing power to decrypt the transaction records and the blocks to confirm its status. The mining hardware contributing the processing power solves complex cryptographic equations to identify and add […]
