BITCOIN Mining for the Newbie

BITCOIN MINING

(Newbie)

Bitcoin mining is a process used to secure and validate transaction from the wallet of one user to another. This validation occurs in a decentralized network. The receiver can only receive the bitcoin if the sender transaction is validated.

Validation is in the form of mathematical computation which the mining equipment performs and receives some bitcoins fom performing the operation kind of like the service charge as in Money exchange companies.

Since its decentralized it goes through many systems in the Blockchain network to verify the transaction, so if one system is hacked the other systems in the Blockchain will verify it, unlike the centralized banking system.

Mining can be done by any computational device, but only the devices that have good computational speeds can validate a transaction faster. Mining speed depends on the Hash-rate or Hash-power which varies from system to system. The Space where mining is done is called Mining Farm.

Even the system or device which you are using right now can do mining, but in this decentralized validation the miner with more computational ability will beat he the one with lesser and will in turn receive fractions of bitcoin for validating the process.

As the algorithms get more complex to be solved the mining takes more time, in order to solve this issue a concept of group mining came into the scenario, termed as Pool Mining. 

Mining is not an easy task, it comes with installation costs and monthly electricity charges for the electricity consumption in the mining process. So some miners rent out there mining farms to investors and in turn the investors get some percentage from the fraction of bitcoin made by the miner in the validation process. The bitcoin jargon calls this as buying Hash power. This is called Cloud Mining.

Know more about bitcoin mining (Links below)

• Video on Bitcoin Mining Simple and Clear 
• In-depth information on mining
• Getting Started with mining