As you all know, bitcoin is a digital currency. Therefore, its checks and balances, validation and verification are necessary. Mainly, banks and central government perform these tasks, making currencies hard to forge while minting track of them.
However, the major modification with Bitcoin is - it is decentralized. If there is no involvement of central government, then how to know that the transactions are accurate?
How do you know - person A has sent 1 bitcoin to person B?
How do you stop - person A from also sending that bitcoin to person C?
Mining process involves transaction verification and adds it to the public ledger, known as the blockchain. Also, the means through which new bitcoins are released. Anyone can participate in mining with the access to the internet and suitable hardware. The process includes accumulating recent transactions into blocks while solving a computationally difficult puzzle. The one who initially solves the puzzle gets to position the upcoming block on the blockchain and claim the reward. The rewards thus incentivize mining includes both the transaction fees accompanying transactions compiled in the block as well as new bitcoin.
GuideWhat is Cryptocurrency? What is Bitcoin? Is Bitcoin Legal? How Can I Buy Bitcoin? How Can I Sell Bitcoins? What Is Bitcoin Mining?
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