What Is Cryptocurrency Mining and how Bitcoin mining works?

Blockchain
#1

The term “crypto mining” refers to the process of acquiring cryptocurrency by solving cryptographic equations with computers. This approach also includes validating data blocks and applying transaction records to a public record (ledger).
Bitcoin mining is a crucial component of the blockchain ledger’s upkeep and expansion, as well as the act of bringing new bitcoins into circulation. It’s done with the help of cutting-edge computers that can tackle exceedingly tough computational math problems.

#2

Cryptocurrency mining is the process in which transactions between users are verified and added into the blockchain public ledger.

The process of mining is also responsible for introducing new coins into the existing circulating supply and is one of the key elements that allow cryptocurrencies to work as a peer-to-peer decentralized network, without the need for a third party central authority.

Bitcoin is the most popular and well-established example of a mineable cryptocurrency, but it is worth noting that not all cryptocurrencies are mineable. Bitcoin mining is based on a consensus algorithm called Proof of Work.

A miner is a node in the network that collects transactions and organizes them into blocks. Whenever transactions are made, all network nodes receive them and verify their validity.

Then, miner nodes gather these transactions from the memory pool and begin assembling them into a block (candidate block).

The first step of mining a block is to individually hash each transaction taken from the memory pool.

But before starting the process, the miner node adds a transaction where they send themselves the mining reward (block reward).

This transaction is referred to as the coinbase transaction, which is a transaction where coins get created out of thin air and, in most cases, is the first transaction to be recorded in a new block.