How Does Bitcoin Mining Work?

How Does Bitcoin Mining Work?

July 24 (Bloomberg) — Bitcoin mining is the complicated process through which new bitcoins are made. So how does it work? Bloomberg and Switch-Video explain. (Source: Bloomberg)

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  1. I get it .

  2. Fin

  3. Technicalities..

    0:03 – Bitcoin mining is the process that verifies/confirms transactions. Generation of coins is a temporary side-process which serves to "fairly" distribute all of the coins that will ever exist up to 21 million. Miners are incentivised to mine to receive the coin subsidy. In the future, transaction fees will support miners instead.

    0:13 – Powerful computer and extremely complex problems myth. Mining applies a well known secure hashing algorithm called sha-256 to bundles of transactions. Generating this hash is easy, a cheap USB miner can do 330 million per second. The result must meet certain requirement, and because there are MANY miners going after the same available coin reward, the faster you can mine, the higher chances you have of finding the result. This caused the "requirement" to become rather difficult. The more people mine, the harder it is. System self-adjusts appox every 2 weeks. Today mining with computer is useless. Specially made chips now can run the hashing algorythm billions of times per second. Do not mine.

  4. This video didh't tell me jack. How do you get started bit coin mining? Is there a website you go to? A place? A bank? How do you cash them in once  you get them? Do you get a piece of paper certifying the coins? What can you buy with bit coins?

  5. So essentially if you had a compete off the grid solar setup on your Hi-end PC you could become very wealthy just by bit coin transactions!

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